Cloud Computing for Small and Medium Enterprises 1

Cloud Computing for Small and Medium Enterprises

Cate Dillon, Faisal Khan
Abstract - Cloud Computing is a service offering which has become widely popular in the business world due to growth of key technologies such as high speed networks, low cost of CPU power and memory, availability of high performing virtualized systems management software and wide acceptance of internet usage. This has provided unprecedented opportunity to all businesses particularly small and medium enterprises to expand their business using low cost but, scalable computing resources. The focus of this paper is to study the concept of cloud computing and the impact it is having on the success of the companies, especially in the context of SMEs. Through the case study, we will examine benefits and challenges of deploying a medium sized application in IaaS environment. Index Terms cloud computing, small and medium enterprises, service providers, benefits and challenges

The term cloud computing seems to have been coined from the concept of what happens when services and applications are transferred or moved to the internet cloud. It appears that the word cloud is used here as a metaphor to the internet. This is based on the drawing of a cloud that was used as a depiction of a telephone network in the last century, and later to represent the internet in diagrams as an illustration of the infrastructure it is a representative of. Cloud computing did not appear, suddenly as a completely new discovery, overnight. It can be traced back, in some form or the other, to the time when computers had the ability to time-share limited amount of resources and applications. In fact, the idea of cloud computing can be dated back to the 1960s when John McCrthy predicted that an age would come when computation might become a public utility. In this extremely competitive and rapidly changing era, companies are constantly looking for ways to cut down costs, stay profitable and achieve sustainable competitive advantage. With the growing number of customers and the vast information available to organizations, it is of utmost importance for the organizations to sort out the data available and make information sharing efficient to meet the various stakeholder needs. One innovative way to do so is through cloud computing. According to Wikipedia- Cloud computing is the delivery of computing as a service rather than a product, whereby shared resources, software, and information are provided to computers and other devices as a metered service over a network. According to Webopedia- Type of computing that relies on sharing computing resources rather than having local servers. According to Sprythink.com- A computing paradigm in which tasks are assigned to a combination of connections, software and services access of the Internet. A great technology writer and former chief editor of the Harvard Business Review, Nicholas Carr recently claimed that cloud computing is "a paradigm

I.

INTRODUCTION

Prior to the advent of cloud computing, massive computing and large-scale computer related work was done through the utilization of mainframes and supercomputers. These were very large systems that were not bought as one whole package. Instead, they were created by connecting hundreds and thousands of CPUs that is central processing units in order to derive faster results (Chetty and Buyya, 2002). Particularly industries that specialized in information technology used this setup excessively, based on their computing needs. It was thought to be a very effective system but the problem lay in the capital or cost that was needed to create this sort of facility and also the very high cost of maintaining it in the best of its condition(Foster and Tuecke, 2001). The entire system was not only very expensive but also quite complicated (required complex interconnections and specific technologies) and required a large area to be operational. The biggest problem lay in its maintenance. These problems and high costs of the past computing practices paved the path for the discovery of a more economic, simplified and effective means of computing that is very popular today by the name of cloud computing.

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shift similar to the displacement of electricity generators by electricity grids in the early 20th Century". He predicts that in future a company's IT communications will be viewed as a utility expense similar to that of an electricity or water bill. It is the reality not farfetched (Carr, 2008). Simply, cloud computing is a commodity provided by a service provider that replaces the need to build internal complex and expensive infrastructure, systems and programs. It is paid for on demand and as consumed. The technology is invisible and focus is on business value. created by their customers to be set off the provider's podium. C. Software-as-a-Service (SaaS) In the software as a Service (SaaS) cloud model, the purveyor supplies the software product, the hardware infrastructure and interacts with the user through a front-end portal. It is the most common and broadly known type of cloud computing. Services can be anything from inventory control to Web-based email and database processing. As the service provider swarms both the data and the application, the final user is free to use the service from anyplace. III. II. Type of Cloud Computing Services Types of deployment

There are four deployment models available in the cloud: Public -This is available to general public and mostly sponsored by government or large industry group, most often through a third-party provider. Private This model is available for exclusive use of a specific group or organization hosted either on or off premises. Hybrid This is a combination of Public and Private deployment models and is tailored to reach a large consumer base and internal needs of an organization or an industry Community This model is most useful when the consumers have similar needs or common function. It is extremely popular choice among universities, health-care providers and government agencies. The following is the visual model of NIST Working Definition of Cloud Computing as presented by Cloud Security Alliance:

Cloud computing services are generally divided into three categories: A. Infrastructure-as-a-Service (IaaS) Infrastructure as a Service (IaaS) like Amazon Web Services provides virtual server instance API to start and stop, and also organize their virtual servers and storage. IaaS offers sell customer access to web servers, storage space and internet connections. The IaaS provider can easily maintain customers rent space and hardware according to their present requirements. As IaaS is widely used to measure the consumption of electricity, fuel and water, it is sometimes referred to as utility computing. B. Platform-as-a-Service (PaaS) Platform as a Service (PaaS) in the cloud can be defined as a set of product and software improvement tools hosted on the provider's communications. Developers create applications on the provider's platform over the Internet. Customers can create various applications using the PaaS providers APIs, gateway software or website portals. Force.com, (a development of Salesforce.com), Zoha Creator, Mozilla Bespin and Google Apps are examples of PaaS. Currently developers should know that there are not standards for data portability in the cloud. It is also seen that some providers do not allow software

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Source: Security Guidance for Critical Areas in Cloud Computing V2.1, Cloud Computing Alliance

IV.

Major Service Providers

Amazon Amazon is a considered the most innovative firm in the Web-based computing which provides the pay-asyou-go accessibility to virtual servers and data storing space. The services include Elastic Compute Cloud (considered helpful for computing capacity) and Simple Storage Service, (used for maintain the capacity of on-demand storage), CloudFront (providing content delivery through Web), Simple Queue Service (messages are stored when transferred between companies) etc. the services of Amazon are used by more than thousand organizations of all sizes. AT&T After Amazon and Google, AT&T is the biggest names that provide synaptic hosting that integrates security and other networking functions with offers such as pay-as-you-go accessibility to servers. The

Cloud Computing has evolved through the popularity of service oriented architecture and web services. The innovations in web technologies has enabled offering of business process functions online. Although relatively new, the cloud computing technology has spread across the globe like a wildfire. Innovative start-ups as well as existing vendors, all seem to be clamouring for customer interest. As mentioned earlier, Cloud providers are divided into PaaS (facilitating developers to host and create Web application), Saas (availability of ready to use business functionality) and Iaas (offering access based on Web to store and compute power). There are many companies which have started providing cloud computing services, but some of the major and most successful providers are mentioned below.

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company believes that providing cloud infrastructure is not difficult for service providers, but it is more important to take these services to another level by bringing in the security factor. The regional gateways of its cloud network are United States, Europe and Asia. Google One of the most famous offering of Google is Google app which is an online office tool that includes email, word processing and basic Web site creating tools. Google App Engine also provides a platform for developers to build application and host it on firms infrastructure. Through the introduction of Google Apps, company attempted to spread beyond the traditional search market of consumers. It is used by small organizations, colleges and universities around the world. Microsoft Azure is the cloud offering of Microsoft, which allows building and enhancing Web-hosted applications. Though, Microsoft was famous for building operating systems for PCs, but now it is making Windows accessible on cloud. Apart from the service prodders mentioned above, some other provider include Enomaly , NetSuite, Rackspace , RightScale and Salesforce.com. A. Case Study A medium sized not-for-profile Corporation needs an application to reach roughly 400,000 end users spread across the province of Ontario. Business Goals 1. 2. 3. 4. 5. Two Way Information Sharing Delivery a modern and emotional visual experience Deliver a customer centric and usability focused experience Deliver a very high performing, continuously available service Ensure availability on all platforms/browsers including mobile technology

Business Constraints 1. 2. 3. 4. Very limited budge Tight project timelines Unknown and widely varying user loads Reputational Risk and Protection of Privacy

Architecture Guiding Principles for the Cloud 1. 2. 3. 4. 5. 6. Design for failure Loose coupling Implement "elasticity" Build security in every layer Parallel processing Leverage different storage options

V.

Benefits of cloud computing to Small and Medium Enterprises (SME)

Example 1 Internal transaction processing Service:

Information Technology is the biggest enabler to reach the markets faster, provide timely customer service and beat the competition. The biggest challenge for any business but particularly for SME is to spend limited capital towards front-end loaded information technology resources. Cloud Computing provides an ideal solution to SMEs to secure the IT resources and pay only for services being used Rittinghouse and Ransom (2009). It eliminates the need for heavy IT infrastructure capital investment but, provides scalability and access from anywhere in the world. All that is required is a simple rental agreement and fast internet access.

Amazon RDS 26 Cores, 96 GB RAM, 1 TB Disk Total Elapsed Time: 5 minutes to create PaaS 6 minutes to load data 5 minutes to run proprietary algorithm 3 minutes to download results 2 minutes to shutdown PaaS Total Cost:

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$3.14 USD including Oracle 11g EE License, Support, Monitoring and Report and Portability $502.40 to run proprietary algorithm for all business objects across province of Ontario Example 2 Web Application Service: Amazon EC2, Amazon CloudWatch, Amazon Cloud Scale, Amazon Elastic Load Balancing Need: Run application for 400,000 simultaneous users for 10 weeks from 5pm to midnight Monday to Saturday Peak: 100 independent servers (LAMP) 13 weeks out of 208 for 7 hours a day. Low:4 independent servers(LAMP) Provision:4 + Auto scale to 100 AS NEEDED. The organization will have to overcome following challenges to reap the benefits of the cloud: 1. 2. 3. 4. 5. 6. 7. Trusting vendors security model Securing its data against the provider and other clients within the shared environment Inability to respond to audit findings Obtaining support for investigations Indirect administrator accountability Proprietary implementations cant be examined Loss of physical control Cost at 4: $0.08/hr + $0.025/hr = $282.24/month Cost at 100: $0.08/hr + $0.025/hr = $7,056/month Included: Security, Patching, Monitoring, Compliance HIPPA, Sox, SAS 70

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Source: (Amazon Elastic Compute Cloud)

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Source: (Motahari-Nezhad and Singhal, 2009).

VI. Disadvantages of cloud computing Two most popular issues associated with the services of cloud computing include problems relating to the storing and security of the data, as well as regulating the use of services by the providers. The traditional approaches tend to focus more on the system perimeters using firewalls and other existing barriers. In the cloud computing service, perimeters are not very clearly defined specifically with multi-tenancy. Internet is considered to be a weak area as internet protocols tend to be limited in respect to security features. Moreover, organizations find it very hard to host firms critical information outside their border (MEI and TSE, 2008). When the physical access to the server controlling the critical information becomes remote, firms may find it similar to loosing the information itself. Therefore, it might increase the vulnerability of the sensitive information to security breaches.

There are a number of challenges associated with the services of cloud computing, which may reduce the quality of services to a great extent. However, in some cases, these advantages may also be a source of opportunity for the firm only if they are resolved with greater focus and care in the initial planning stages. Most important disadvantages are associated with the organizational, technical and legal areas. Technical risks are risks such as multi-tenant environment, internet connection, complexity of the system etc. Legal issues faced might include lack of governance, problem of sending data across nations and regulatory boundaries (Saha and Mukherjee, 2003) A. Security and privacy issues

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B. Loss of governance When clients are using clouding infrastructure, they have lesser amount of control of the Cloud Provider (CP). The regulators may not take the responsibility of providing such services to the clients, thereby creating a gap in the security defences. The loss of governance and lack of control might have some severe implication for the organization. Organization might find it difficult to comply with its mission, goals and strategies. It might cause violation of security policies, deteriorate performance and service quality as well as create some importance compliance challenges for the firm. C. Lock-in issues Although the cloud computing services have replaced the traditional computing models, but there are still no procedures or standards that can guarantee data application and portable services. This creates problems for customers as they cannot move between different providers or transfer data to the companys in- house IT environment. Clients are dependent on a specific service provider, specifically in the case where data portability is not permitted. The dependency on a particular provider may be a potential source of business failure in the case where provider goes bankrupt application transfer path is too costly. The lock in issues may also vary with the type of cloud computing infrastructure used. D. Standards Although the clouds have been witnessed as documenting interfaces, however there are still no specific standards associated with it, which makes them less interoperable. This implies that there will be limited or no coupling between the service providers and the clients. Each individual client uses APIs provided by the providers to take advantage of the available services. Service providers provide diverse set of standards and technologies, which vary for each provider, making it difficult and costly for clients to shift from one provider to another. E. Isolation failure Some of the defining characteristics of cloud computing include the multi tenancy and shared resources. The risks also include the mechanism failure of devices that tend to separate storage, memory, routing areas as well as reputation of different tenants (also called guest- hopping attacks). Isolation failure occurs in less number as it is difficult for attacker to initiate the attack in comparison to attacking the conventional operating systems. F. Incomplete data deletion Sometimes a request to delete the cloud resource may not result in complete wipe out of the data. Timely data deletion might be prevented because of extra data copies that might be stored but are unavailable, or data of other clients is also stored in the disk that is to be deleted. A greater amount risk exists when multiple tenancies are used or the hardware resources are to be reused. VII. Future Roadmap

Considering the economic advantages of Cloud Computing, it has a huge backing from the business world. However, for IT professionals to adopt virtualization as a mainstream solution, the service providers need to seriously address the security and privacy requirements of the customers specific to their operating geography. The data is going to converge further which will result in more advanced and developed analytical features. Huge databases are being formed quite rapidly. Also, data integration is slowly being replaced by data virtualization which in turn will pick up momentum. This is because data virtualization offers the advantage of giving centralized access and that too without the need to maintain a large database or data warehouse system. In the future it is expected that more attention will be paid to the security aspect of cloud computing and an official security standard will be set up, which will be a milestone. However, for this, it is imperative that this security protocol is introduced after the approval of providers and all of the big players agree to this model of standard security (Boleslav, n.d). From the perspective of executive decision makers, the financial stability of the cloud service provider is a huge factor for businesses to decide on losing control of its IT infrastructure assets and create a dependency on a third party for its core business. Therefore, in order to attract larger customers, the new incoming service providers will need to secure stable funding commitments. Secondly, to sustain its

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growth in the marketplace, the service providers will have to provide added value of a business partner by understanding challenges of its customer and collaborating on the solutions. VIII.
1.

References

Chetty, M., and Buyya, R., Weaving Computational Grids: How Analogous Are They with Electrical Grids? Computing in Science and Engg., 4, pp. 6171.(2002) 2. Foster, I, Kesselman, C., and Tuecke, S., The Anatomy of the Grid: Enabling Scalable Virtual Organizations, International Journal of High Performance Computing Applications, 15, pp. 200 (2001) 3. Security Guidance for Critical Areas in Cloud Computing V2.1, Cloud Computing Alliance 4. Boleslav S.,. Cloud Computing Overview: Evaluating the Opportunities (n.d) 5. R. Motahari-Nezhad, B. Stephenson and S. Singhal: Outsourcing Business to Cloud Computing Services: Opportunities and Challenges, HP Laboratories, (2009). 6. Amazon Elastic Compute Cloud (Amazon EC2) available at http://aws.amazon.com/ec2 [accessed 25 March, 2012] 7. Saha, D., and Mukherjee. A.,Pervasive computing: a paradigm for the 21st century. IEEE Computer, 36 (3), pp 2531.(2003) 8. MEI, L., CHAN, W. K. and TSE, T. H. A Tale of Clouds: Paradigm Comparisons and Some Thoughts on Research Issues. In Asia-Pacific Services Computing Conference, 2008. APSCC '08. IEEE, pp. 464-469. (2008) 9. Rittinghouse , J.W., and Ransome, J.F. , cloud computing implementation, management and security, CRC press Taylor & Francis Group, (2009). 10. Carr, N.,The Big Switch: Rewiring the World, from Edison to Google, W. W. Norton publishing, Jan. 2008.