1 Scalability
As mentioned above, scalability is a key aspect of cloud computing. The ability of the platform to expand and contract automatically based on capacity needs (sometimes referred to as “elasticity”), and the charging model associated with this, are key elements that distinguish cloud computing from other forms of hosting.
Cloud computing provides resources on-demand for many of the typical scaling points that an organisation needs including servers, storage and networking. The on-demand nature of cloud computing means that as your demand grows (or contracts) you can more easily match your capacity (and costs) to your demand. There is no need to over-provison for the peaks
At the software level cloud computing allows developers and IT operations to develop, deploy and run applications that can easily grow capacity, work fast and never — or at least rarely — fail, all without any concern as to the nature and location of the underlying infrastructure.
One shouldn’t forget the advantage cloud computing can offer newer or smaller players. With easy access to a cost effective, flexible technology platform small competitors can punch well above their weight in terms of application capacity and scalability and can quickly turn into significant adversaries.
2. Cost Saving
There is still some debate about whether there are real cost savings with cloud computing. McKinsey recently published a report claiming that there was no cost saving to be had and that, on the contrary, it could work out more expensive. This report has since been debunked by others claiming that it only focussed on one (failed) project and that it didn’t accurately reflect the true cost of running systems internally.
On the other hand, a report by Forrester emphasises the fact that use of cloud computing matches cash flow to system benefits more appropriately than the traditional model.
In the old way of doing things, a large investment is made early in the project prior to system build out, and well before the business benefits (presumably financial in some shape or form) are realised. This model is even more troubling given the risk factors associated with IT systems: they are notorious for failing to deliver their promised benefits, and a large percentage of projects end up scrapped due to poor user acceptance.
With cloud computing you move from a capital investment to an operational expense.
Whilst cost won’t be the only driver in the adoption of cloud computing it is often seen as the key factor. Clearly if a decision to adopt cloud computing (or not) is to be based primarily on the potential cost savings then the true cost of operating an application internally needs to be understood and this is something that most organisations are not good at.
Many organisations home in on the cost of provisioning a server internally (including software licences) and end up comparing that with the cost of a cloud-based solution. This inevitably will lead to the conclusion that cloud computing is more expensive.
The problem with this type of costing is that it omits a whole range of costs that are often not assigned to the internal server’s costs such as
a. technical personnel necessary to keep a data centre up and running
b. extra personnel necessary to manage server procurement
c. utility bills and capital expense investments for power and cooling
d. internal technical people to do assessments and trials of different hardware offerings
e. procurement people to do the negotiating for hardware purchase
f. internal and external costs for data centre designers, facilities management, etc
g. contract and account people to keep track of all the various licenses, leases, etc.
In addition, most organisations’ data centres are often oversized when they are built and typically will run at a utilisation rate of less than 60%. It is also reckoned that over the four year life of a server, the combined facility, capital and operational expense will be up to four times greater than the cost of the server itself.
One of the key advantages offered by cloud computing is that you can pay on a consumption basis e.g. per hour, per gigabyte etc. This has a huge impact on the economics.
When a true comparison is done, using a fully costed model, the decision weighs more favourably towards cloud computing. And when the other advantages are taken into account then cloud computing can really stack up as a viable option.
Research firm IDC summed it up the thus - "The cloud model offers a much cheaper way for businesses to acquire and use IT. In an economic downturn the appeal of that cost advantage will be greatly magnified".
3. Business Agility
One of the understated advantages of cloud computing is that it enables an organisation to be more agile.
The speed at which new computing capacity can be requisitioned is a vital element of cloud computing. Adding additional storage, network bandwidth, memory, computing power etc can be done rapidly and often instantaneously.
Most cloud providers employ infrastructure software that can easily add, move, or change an application with very little, if any, intervention by cloud provider personnel.
This dynamic, elastic nature of cloud computing is what gives it a big advantage over an in-house data centre.
Many internal IT departments have to work through procurement processes just to add additional capacity. Once the procurement has been authorised it can still take weeks to acquire and rack new equipment. In many cases the demand for IT services is outstripping the ability of the IT department to manage using traditional practices.
Cloud computing allows organisations to react more quickly to market conditions and to scale up and down as needed. New applications can be quickly released with lower up-front costs.
The flexibility offered by cloud computing enables innovative ideas to be rapidly tried and tested without the need to divert existing IT staff from their daily routine. Increasingly people won’t want to spend capital on these new ideas. They’ll want to pay for them operationally. They may represent a new market, a new technique, a new set of standards, or a new set of technologies.
If you’re starting a new line of business, you can launch with a robust, state-of-the-art infrastructure without tying up limited capital.
For development projects, organisations can provision multiple production-scale systems on demand in the cloud – saving time and expense over traditional testing scenarios and enabling faster handoff from development to operations. And when the project is finished they can be turned off again with nothing else to pay.
4. Built-in Disaster Recovery & Back-up Sites
With cloud computing, the burden of managing technology is placed on the technology provider. It is their responsibility to provide built-in data protection, fault tolerance, self-healing and disaster recovery.
Typical disaster recovery costs are estimated at twice the cost of the infrastructure. With a cloud-based model, true disaster recovery is estimated to cost little more than one times the costs, a significant saving. Additionally, because cloud service providers replicate their data, even the loss of one or two data centres will not result in lost data.
Cloud computing provides a high level of redundancy at a price point traditional managed solutions cannot match. Now every business can put a plan in place to ensure they are able to continue their business in the face of radical environment changes. Even the cloud computing cynics are agreed on this.
5. Device & Location Independence
Cloud computing is already enabling greater device independence, greater portability, and greater opportunities for interconnection and collaboration.
With applications and data located in the cloud it becomes much easier to enable users to access systems regardless of their location or what device they are using.
Teleworkers can be quickly brought online, remote offices can be quickly connected, temporary teams can be easily set up on site, mobile access can be easily enabled.
With the growing use of smartphones, netbooks and other hand-held devices there is also an increasing need for data access on the go.
The success of devices such as the iPhone and its App store is also opening up a whole new world of mobile applications. Connecting these types of applications to data stores will be significantly easier through the cloud.
Location-based applications will reach their potential through cloud computing. Many smartphones are now location-aware (using inbuilt GPS facilities) and we will increasingly see applications that take advantage of this capability.
Cloud computing will facilitate innovation in many areas. Much of it will be driven by the ease with which different devices can connect to cloud-based applications.
6. BONUS REASON: It’s Greener
As mentioned above, most internal data centres are oversized and don’t run at anything like full capacity. Most servers run significantly below capacity (real world estimates of server utilisation in data centres range from 5% to 20%) yet they still consume close to the same amount of power and require the same amount of cooling as a full capacity machine (granted that Virtualisation is changing this in some cases).
A typical data centre consumes up to 100 times more power than an equivalent sized office building. The carbon footprint of a typical data centre is therefore a significant concern for many organisations.
In a cloud computing environment resources are shared across applications (and even customers) resulting in greater use of the resources for a similar energy cost.
For corporations spread over different time zones the computing power lying idle at one geographic location (during off-work hours) could be harnessed at a location in a different time zone. This reduces not only the power consumption but also the amount of physical hardware required.
With cloud computing virtual offices can be quickly set up. Employees can easily work from home. Travelling salespeople can have all their data available in any location without needing to visit the office. These are just some of the other examples of how the carbon footprint can be reduced.
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