Business is forcing IT organizations to adapt to cloud computing because its financial benefits. IT organizations are interested in Cloud computing for its Operational Benefits, Financial Benefits, Better support for collaboration and Increased access to IT services for mobile workforce.
A cloud-based infrastructure requires its robust and redundant infrastructure. This often provides better uptime and availability at a lower cost. For example, storage on Amazon S3 can be procured as little as 0.15 cents per GB. Since cloud services start with a prebuilt foundation, they provide good support for flexible provisioning, allows consistent upgrades, and expedites launch of new, innovative projects to gain/retain market share.
We have seen earlier that the pay-as-you go model allows greater flexibility in cash flow. This also empower companies to scale gracefully based on demand. The increased cash flow allows enterprises to fund multiple projects simultaneously, without having to provision for capacity, investments, and personnel as a priority. Since the operational management is owned by third party service provider, ongoing operational overhead for internal IT departments would be lower. This will bring down the total cost of ownership (TCO) for using a cloud service lower than a on-premise model that exists today.
Collaborative and community computing facilitates multisource input and multiparty computing, which is the core strength of cloud computing model. This brings benefits that are not attainable with local computation only. For example, cloud-based threat service such as distributed denial of service attacks (DDoS) or spam detection. A cloud service that has a wide visibility of the Internet traffic would see the onset of an attack more quickly and accurately than any local threat detector. Another example would be National Geographic’s topo.com that uses Amazon’s S3 to sell maps, download updated trail and trip information and even create trip maps to share with their friends.
As you probably know, not everything can be classified as cloud computing. Remember the early 90’s when you could order pizza or food over the web in the San Francisco Bay area? It was not a web based pure play business model. Similar to that 90’s ASP business model, a lot of technology vendor are coming up with new cloud services almost every day. Many of them are not cloud service but rather follows ASP hosted model. We will revisit this topic later in the series.