The emergence of cloud computing represents a game changer for information technology services because it offers anytime & anywhere storage. Cloud computing is defined as an information technology service model that provides on-demand consumption and real-time delivery access to computing resources including networks, storage, servers, applications, and services. In other ways, cloud computing promise to provide on-demand computing power without investing 16 in new infrastructure, licensing software and training new personnel. According to the survey of business and technology leaders by IBM Institute of Business Value, organizations are embracing the cloud as a method to reduce costs and complexity associated with traditional IT management. Furthermore, the cloud future is bright because it is expected that by 2020 more than $ 1 trillion will be used by enterprises directly or indirectly in IT expenditures in order to transform to a cloud computing system. Cloud service delivery models can be grouped into three common areas including Software-as-a-Service, Platform-as-a-Service, and Infrastructure-as-a-Service.
Software-as-a-Service (hereafter: SaaS) provides organizations with applications that are hosted by the cloud provider and delivered through the Internet. The benefits of SaaS model are that it eliminates the need for the user to manage complex applications and it allows the provider to release updates to the organization. Common SaaS providers include Salesforce.com’s online customer relationship management system, Google Mail & Docs, NetSuite, and Microsoft Office Live among others. Platform-as-a-Service (hereafter: PaaS) is a development and execution platform that provides developers with access to hosting, programming, tools, and management environment. An advantage of PaaS is the ability to provide the full life cycle of software development which allows developers to concentrate more on productive problems rather than administration burden. PaaS typical providers are Google App Engine, Force.com by Salesforce, and Facebook F8 to name a few. Infrastructure-as-a-Service (hereafter: IaaS) provides IT organizations and software developers with remote full IT infrastructure including storage, computing capabilities, and devices. The benefits of IaaS are that it enables efficient use of IT resources through scalable virtual machines that match the computing demands and it eliminates the need for organizations to build & manage their own IT system. Examples of IaaS are the Amazon Elastic Compute Cloud (EC2) and Simple Storage Service (S3). The above three layers, including SaaS, PaaS, and IaaS present a computing paradigm shift because IT resources are no longer considered as products but rather as services that can be rented from customers via the Internet. In addition, cloud computing can be classified as private, community, public, and hybrid cloud based on the relationship between the consumer and the.
The special features of cloud like cost-effectiveness, rapid scalability, market adaption, masked complexity, user-centric experience, and ecosystem connectivity provide new opportunities and business value. First, cost-effectiveness enables companies to shift IT capital expenditures which usually are servers, software licenses, and networking tools to operating expenditures. This means that cost-flexibility creates a low barrier to entry that will allow companies to have immediate access to computing capabilities without the need to invest upfront capital investments. Furthermore, the pay as you go billing model provides customers with resources such storage in the form of virtual machines that are dynamically allocated and deallocated and this means that customers pay based on the amount and on the time length of resources usage. The pay as you go IT model made an appealing contribute to Commonwealth Bank of Australia that besides reducing the infrastructure and maintenance costs by 40 % it also reduced the development of new IT-enabled product and services. Second, the scalability feature of cloud computing makes it easier for companies to add or remove dynamically resource capabilities in real time. The rapid provision of resources with no scale limitations enables enterprises to benefit from economies of scales without making capacity precommitments. For enterprises, autoscaling means meeting the consumer demand promptly by having the servers on the go as need even in times of unexpected demand or during the peak times. In practice, the Internet on-demand streaming provider of movies and tv shows – Netflix – faces large surges of demand during the peak hours between 9 and 12 pm and 18 consequently they made a decision to migrate their website and streaming services through a cloud environment. The move to cloud computing allowed Netflix to not just meet the demand of the existing customer base but also to grow and expand continuously and to meets its growth requirements. Therefore, the cloud’s ability to scale capabilities to support efficient growth is celebrated as one of the top benefits of cloud computing.
Third, cloud computing increases the agility of organizations to adapt to rapidly changing market demands by facilitating innovation and reducing time to market. ClearDATA and Google Cloud partnered together to accelerate innovation in healthcare by allowing developers to expand their experiments and discover new health care applications through a secure and compliant health data environment and an extensive open source system with automatic deployment and scalability. Furthermore, cloud computing helps speed time to market because operators of cloud computing resources in many cases do not need to procure, install, and test the complete infrastructure including middleware and applications. In practice, ActiveVideo applied the power of cloud to enhance market adaptability by creating a cloud-based TV that liberates the user interface from the device through moving the application engine to cloud and unifies different sources and formats of content including Web, TV, social, mobile, video-ondemand into any video screen to provide viewers a new television experience.
Fourth, cloud computing offers the masked complexity advantage that allows organizations to hide the intricacies from the end user as upgrades and maintenance can be performed in the background without requiring any participation from the end user. An example of how masked complexity works in practice is the adoption of cloud computing in printing because the complexity of big data management in storing documents, converting to print-ready format, and distributing it to the printer is hidden by allowing the end user to print directly from smartphones, laptops, tables, and other devices. Fifth, cloud can store a vast amount of data that can be used to understand customers and their buying habits to enable product or service customization. For example, Siri is focused on providing a context relevant user experience by using artificial intelligence and a large base of data about information such as his/her location and frequent contacts to understand the meaning behind what is said. Sixth, ecosystem connectivity enabled by the cloud can bring together customers and partners in order to facilitate external collaboration that can lead to improve productivity and increase innovation. This network based system will provide companies with the opportunity to develop inter-organizational relationships with partners by sharing resources and providing access to information and processes. An example of ecosystem connectivity is the B2B integration platform developed by a UK third party logistics company called “Gist” in order to onboard faster trading partners and to offer flexibility in handling new partner message requirements.