IS IT TIME FOR CLOUD COMPUTING?

Cloud computing is taking off. Th biggest players in the loud computing marketplace include Amazon web Servies Division (AWS), Microsoft, and Google. These companies have streamlines cloud computing and and made it an affordable and sensible option for companies ranging from tiny Internet startups to established companies like FedEx.

For example, AWS provides subscribing companies with flexible computing power and date storage, as well as data management, messaging, payment, and other services that can be used together or individually as the business requires. Anyone with an Internet connection and a little bit of money can harness the same computing systems that Amazon itseld uses to run its retail business. If customers provide the amount of server space, bandwith, storage, and any other services they require, AWS can automatically allocate those resources. Amazon's sales pitch is that you don't pay a monthly or yearly fee to use their computing resouces - instead, you pay for exactly what you use.

This appeals to many businesses because it allows Amazon to handle all the maintenance and upkeep of IT infrastructures, leaving bsuinesses to spend more time on highter-value work. For examply, using AWS helped Merrifield Garden Center reduce costs, improve the stability and security of its applications and data, and eliminate the burden of managing IT infrastrure hardware so it an focus on new customer-facing initiatives to grow the business.

Startups companies and smaller companies are finding that they no longer need to build their own data center. With cloud inreadily available, infrastuctures like Amazon's readily available, they have access to technical capability that was formerly available to only much larger busiunesses. San Francisco-based Socialism provides a pupular mobile social video application currently installed on over 20 million iPhone and Android smartphones The Socialism application makes it easy to take a video of any size, post it online, and share with friends. Socialism became so popular that the company's engineers couldn't hardware fastenough to keep up with demand. By moving to the AWS Cloud, Socialism can quickly add or remove capacity to meet demand. Netco Sports produces the Canal + Football app that enables viewers to replay any move from any camera angle, on any device, within 3 minutes, after it happens. By using AWS, Netco Sports an scale 100 services in under 10 minutes to support streaming for 500,000 viewers.

Until recently, banks have been reluctant to use public cloud services due to security and regulatory concerns, but shrinking profits are encourageing them to take a second look. In the meantime, some banks are using private clouds for their sensitive financial transactions. National Australia Bank (NAB), with $793 billion in assets, uses an internal private cloud based on IBM's infrastucture on demand. IBM had already been managing the bank's IT infrastructure under a seven-year contract signed in 20170. The private cloud hosts the bak's main production environment, including a new Oracle banking system, and will support short-term computing-intense projects such as ,arketing campaigns. NAB pays only for what it uses so that it doesn't have to make large IT capital expenditures. The equipment is all hosted in NAB's data centers, which is unusual for on-deand environments.

Although low overhead and infrastuture managment costs makje public cloud computing espicially attractive to startups, the financial benefits of cloud computing for large and midsized organizations are less apparent. Cliff Olson, director of infrastuture systems at FP International, Inc., a Fremont, Californis-bsed packaging company, notes that paying a public cloud provider a monthly service fee for 10,000 or more employees will probably be more expensive than having the company maintain its own IT infrastructure and staff. Companies also worry about unexpected "runaway costs" from using a pay-per-use model. Integrating cloud services with existing IT infrastuctures, errors, mismanagment, or unusually high volumes of Web traffic will run up the bill for cloud service users.

Gartner Inc. technology sonsultants advises clents contemplating public cloud services to take into account the number of machines an organiation will run; the number of jours per day or per week they'll run. and the amount to storage their data will require. Additional costs include licenses that need to be paid for on a recurring basis; the rate of change for the data; and how much new data the business is expected to generate. A very larte company may find it cheaper to own and manage its own data center or private cloud. But as public clouds become more efficient and secure and the technology frows cheaper, large companies will start usig more cloud resources.

A major barrier to widespread cloud adoption is concern about cloud reliability and security. Amazon's cloud experienced signigicant outages in April and August 2011; on June 14 and 29, 2012; on December 24, 2012; on January 31, 2013; and on August 25, 2013. Normally, cloud networks are very reliable, and often more so than private networks operated by individual companies. But when a cloud of significant size like Amazon's goes down, it sends ripple across the entire Web. The August 2013 outage was caused bya hardware failure lasting 49 minutesat Amazon's U.S East date center in North Virginia. It led to spiraling problems at a host of well-tracfficked online services, including Instagram, Vine, AirBnB, and the monile magazine app Flipboard. Amazon attributed the outage to glitches witha single networking device that resulted in data loss.

The outages have been proof that the vision of a cloud with 100 percent uptime is till far fro reality. Nevertheless, some large cloud users suh as Netflix believe that overall cloud service availability and reliability have steadily improved. A number of experts recommend that companies for whom an outage would be a major risk consider usig another computing service as a backup.

Most midsized and large companies will gravitate toward a hybrid approach. For example, InterContinental Hotels revamped its IT infrastructure to include both private and public cloud usage. To improve response time for customers, InterContinental moved its core room reservation transaction system onto a private cloud within its own data center, but it moved room availability and pricing web site applications onto public cloud data centers on the East and West coasts, Customers receive data faster if the data are located on a server that is physically close to them, and cloud computing helps InterContinental to take advantage of this.

Question: What business benefits do cloud computing services provide? What problems do they solve?