Cloud Computing: Pros and Cons

What is Cloud Computing?
With Cloud Computing, IT resources such as servers, storage, applications and etc are available as a service to business & individuals through the Internet or private network. The cloud provider provides the hardware, software, data storage, applications and infrastructure, and the user simply connects to them via the Internet.

Some popular examples are Gmail and Yahoo Emails services, Flickr, Google Apps and Microsoft Office 365. The resources that users connect to may not be in the same country as the user. They can be anywhere in the world thanks to the speed of Internet connectivity.

Let’s look at some of the advantages of moving to the cloud.

Maximization of resources. Cloud resources can be shared by multiple users and dynamically reallocated by demand. For example, a data center which serves users in Australia, can also serve users in other regions during their business hours, hence maximising the data center resources.

Accessibility. Cloud services can be accessed via the Internet from any device, and anywhere in the world. These services are also generally available 24/7. Unfortunately, this had led to employees ‘catching up’ on emails and latest news from the office even when they are on vacation.

OPEX instead of CAPEX. Under the CAPEX model, most businesses would purchase hardware and software at an upfront price and depreciate it over the years. By moving to the cloud, businesses will embrace the OPEX model instead, where cloud services are operational costs which are usually paid monthly, and pay as they go.

Agility and Scalability. With cloud computing, businesses can increase or even decrease their CPU or storage usage with the cloud provider whenever the need arises. They simply move to a higher usage scheme with a small increase in monthly charges.

Quick Start up and Deployment. By subscribing to cloud services, businesses can have quick access to services with minimal setup cost and time. This can be very attractive to small businesses which do not have the required larger amount of cash to purchase hardware and software to start up. All they need is a desktop and internet connection, and they are ready to start using cloud services.

Ease of Maintenance and Upgrades. With cloud computing, the responsibility to upgrade the resources (regardless of hardware, software or business applications) lies with the cloud provider. Businesses can focus their resources on achieving their business goals rather than dealing with ‘IT hassles’.

Savings in Energy Consumption With businesses moving to the cloud, the number of in-house servers can be reduced or decommissioned. This may lead to savings in energy consumption.

Now, let’s look at the disadvantages of moving to the cloud.

Data Security and Vulnerability. In the cloud, business data are stored in the cloud provider’s server, which can be anywhere in the world. This include confidential data which are now stored remotely with a 3rd party. Businesses are also putting their entire trust on the cloud provider to manage access and availability to their company data. Cloud providers must ensure clients data are continually protected from unauthorised access.

Cloud providers will also need to implement security measures to ensure their systems are completely secure to minimise hacking or exposure to other malicious threats. Data centers store an enormous amount of business and confidential data, and are proned to hacking attacks.

There can be issues with trans-border data protection and security as different countries have different approaches towards data protection and governance. Businesses must know the location of their data, whether it is in the country or overseas.

However, compared to end users, cloud providers generally have more resources and skills in implementing security measures, and therefore this may benefit cloud users overall.

Availability. Cloud services are hugely dependent on Internet connectivity, and cloud providers are not immune from outages, downtime and slow response in customer service.

Businesses utilising cloud services must also have fast internet access to ensure their work pace is not affected by slow internet connection. Their internet connections must also be able to cope with large data transfer across the internet since data is now stored remotely and not on-site anymore.

Switching Providers. When switching providers, businesses must be aware on how the current provider is transferring, archiving or destroying their data. Issues of data ownership can arise, and businesses must ensure that the current provider have a data retention policy which include destroying non-client data when they already moved to another provider.

Vendor Lock-in. Businesses may be unwittingly locked into the cloud providers specific or proprietary solution or technology, and may find it hard to switch technologies. Businesses will also rely on cloud providers to upgrade their services.

Cost. Most businesses are under the impression that cost is cheaper under the cloud. Generally, after 2 years, the ongoing cost of using a cloud service might be more than the upfront purchase cost. Also, when using a business application hosted on the cloud, businesses will have to ensure all the features they need are included in the cloud version. Often, businesses tend to find that they have to pay for a higher subscription fee if they want to use some of the more advanced features. The marketing scheme of a ‘from price per month’ is generally very persuasive and most businesses are already sold on the idea that cloud services is the cheaper option compared to upfront purchase.

Also, most smaller businesses will perceive the OPEX model as a better option for them due to lack of cashflow and easier accounting.

Integration. Most businesses run diferrent types of applications and software and may have various in-house equipment. When choosing a cloud provider or solution, businesses must ensure their existing IT Infrastructure can integrate easily with their cloud services.

Despite the challenges of cloud computing, it will continue to grow as more businesses are moving to the cloud. Cloud providers are also constantly improving their services to ensure security threats are minimised and a wider range of services can be offered through the cloud. A national initiative to increase the Internet speed and availability to homes and businesses will certainly help to increase the number of cloud users. These are great times of challenge to traditional managed IT providers who still rely largely on selling in-house IT systems.

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