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Cloud Computing

13 Pages   |   2,792 Words

Cloud computing and its implications on a firm’s IT competencies
Research Essay

Table of Contents

Introduction. 2
Types of Cloud Computing: 3
Public Cloud. 3
Private Cloud. 3
Hybrid Cloud. 3
Advantages of Cloud Computing. 4
Technical Competency. 5
Human Competency. 6
Managerial Competency. 7
Disadvantages of Cloud Computing. 9
Conclusion. 10
Works Cited. 11


Cloud Computing is one of the modern computing method which delivers computing as a service. It has eliminated the previous concepts of computing as a tangible thing and as a product. In this regard, resources are shared and information is connected to computers and other related devices as a function and service with the help of an established network; generally the internet (Weinhardt, et al., 2009). As a matter of fact, cloud computing is the latest trend in IT industry. Also, the concept itself is being heavily invested and is getting much popularity in people for general and profound computing. According to (Gens, 2009), IDC forecasts that the services provided worldwide on the principle of cloud computing must be swelling more than $ 42 billion from $ 68.3 billion; and also to reach by $ 148.8 billion by 2014 – 2015. Such an expansion itself explains the potential of the services being provided. There are many service models right now in use by many cloud computing service providers. These include Cloud Software as a Service (SaaS) which provides freedom to the user to used particular computer applications on cloud infrastructure; Cloud Platform as a Service (PaaS) which provides a user with a ability to use customer produced or custom made application on cloud infrastructure by means of programming which is supported by the service provider; and Cloud Infrastructure as a Service (IaaS) which stands unique from other types by providing users with options to process, store, extract, network, etc the data and service in such a fashion that supplementary softwares are also integrated with cloud infrastructure, providing the user with more advance business intelligence and data mining options (Jäätmaa, 2010).

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Types of Cloud Computing:

According to (Rick, 2011), following are the generalized types of cloud computing, which are discussed in detail:

Public Cloud

Public clouds are also known as ‘external clouds’ which uses conventional usage of cloud computing concept by using virtual resources in the cloud (over the internet) in which an offsite thirst party service provider is involved
For example ThinkGrid, a company to facilitate multi-tenant structural blueprints for providing services such as Hosted Desktops, SaaS and PaaS.

Private Cloud

These are also referred to as ‘corporate’ or internal clouds which deals with endowing proprietary computing infrastructure by facilitating with private networks for sharing information and data within the premises of an organization. Such a service is used my multinational companies and large telecom and banks which wants a centralized data sharing structure which is easily achieved through cloud computing.

Hybrid Cloud

Such a cloud computing concept deals with a combination of resources from internal and external providers of service and effectively formulates a data sharing infrastructure. The best example for such a concept is of an organization which can choose to incorporate public clouds for the usage of its daily computing and keeping the security point of view, stores the data in its own corporate cloud. This also provides greater flexibility and comparability with the existing It system as well as business processes.

Advantages of Cloud Computing

According to (Vael, 2010), Cloud computing has numerous advantages that are transforming the shape of Information technology and businesses. It is also declared as the next generation of e-commerce with a lot of potential to present. The advantages include:
  1. On-demand self-service: Cloud computing presets an excellent infrastructure to utilize computing as a service on virtual grounds. It has rather provided an ease with the data storage and flexibility for computing; as it can be used anywhere from the world; provided pre-requisites such as the internet availability, etc are met.
  2. Broad network access: As mentioned, cloud computing provides with greater flexibility and data storage, retrieval and processing is not a geographical bound concept where the user has to be physically present in the front line. As the service features also includes virtual data storage, it provides a broad network access. Thus, there is location liberty for utilizing computing resources.
  3. Resource pooling: Cloud computing is all about resource pooling and sharing. The computing resources of service provider are interlinked to give access to multiple usages by clients. This gives them with unique virtual resource sharing which are generally assigned as per clients’ needs and demand pattern.
  4. Rapid & elastic provisioning (adding & withdrawing): Cloud computing also empowers its users to rapidly use computing resources as per the business requirements. Also, there are verities in choosing the services in the shape of Software as a Service (SaaS) ,Cloud Platform as a Service (PaaS) and Cloud Infrastructure as a Service (IaaS). Generally, one of them or combinations of the mentioned services is used to best provide the computing needs on cloud infrastructure.
  5. Automatically measured, controlled, optimized service: Cloud computing also gives the liberty of time management as the systems which are deployed in the services have the capability to automatically solve complex problems as defined by the clients. Many of the financial institution, banks, and multinationals with set ups in many parts of the works and consultation firms are learning towards using such a service for sharing mutual resources instantly for effective and timely decision making powers to enjoy.
In broader terms, Cloud computing injects technical, human and managerial empowerment in any organization which helps it to maintain positive cash flows by sharing information and data for timely managerial decision making. Also, human resources are seen to be more competitive with deployment of cloud computing in the overall system (Jäätmaa, 2010).

Technical Competency

Cloud computing is the latest and fastest growing computing megatrend that has been flourishing with enormous potential. On technical term, cloud computing is a technology which provides its customers computing solutions in a service mode; not a product. In any organization or business, the concept brings efficiency, agility and scalability in the entire system. It has been declared as a revolution in computing as far as technical enhancements are concerned which are provided by cloud computing (Diversity Limited, 2010). The technology it injects in any organization runs on highly flexible and automated systems that are much simpler to traditional mainframe computing and provides an easy way to take difficult decisions for managers. Also, the cloud computing entails wide-ranging server utilization which also provides multiple hosts with the required information and data; from a single physical server via the internet. This has been a revolution in centralizing data of multinational companies, where headquarters and other stations are inter - connected for efficient data transfer. It also gives provisions to the users to use the service is a customized manner, where applications can be added or removed according to the needs and requirements. Many statistical types of software are also interlined with application stage which is the interface of the system as the user gets its interaction with the system in this stage. Such features could be possible by conventional methods of computing using mainframes (Loeffler). Cloud computing also gives the liberty to share data in such an agile and robust manner that plays a key role in over all organizational success. Profound and analytical applications are also the technical key features which empower the line managers to select data according to circumstances and process it in such a manner that it gives excellent output via business intelligence (Mrdal, 2011).

Human Competency

There is absolutely no doubt on the fact that cloud computing has also revolutionized working concepts. It has endowed workers and employs with greater flexibility in the work. According to researches done in the United Kingdom by Virgin Media Business, more than six workers are reported to be demanding cloud computing facilities in business process in ten. As a matter of fact, only one company is currently been able to provide such service to their employee. (Boardman, 2011). Also, such modern computing and information technological concepts completely revamp the business processes according to the environmental needs. Such softwares as services via cloud computing motivates employees and injects motivation in the employees with the fact that it provides them with flexibility as well as helps the organization to reduce its costs by effectively launching communication and information pooling within the workplaces. Employees are allowed to access centralized information and also pool resources with the field or remote group and communicate in such an interactive and efficient manner that it creates a win-win situation for both the parties; people working in the fields and line managers. As a matter of fact, cloud computing has been an excellent source which provided with start-ups and small and medium enterprises with greater success (Etro, 2009). Features like flexibility, robustness, cost effectiveness, reliability, and shared resources make it possible for such small and medium enterprises to effectively use its resources with lowest costs incurred. Thus, cloud computing has empowered human in a better way; where they have been more productive, result oriented, efficient and creative to utilize resources in a manner which provides the business with the best outcome.


Managerial Competency                                                                                                                                                                                                                                    

Figure 1.0 shows a complete cloud business model framework which explains that there has been complete business models now working on the basis of cloud computing; based on the client’s needs and nature of business. Managerial competencies by cloud computing are enhanced by certain factors such as the infrastructure provided to the managers and workers by the provider. There are numerous infrastructures for every kind of business can be provided. For example sales, manufacturing, product development, market analysis, financial analysis, cost and accounting businesses, etc. are few of businesses for which cloud computing is an ideal concept. Also, cloud computing provides its user with infrastructures which are settled in clusters which also facilitates visualization technologies (Weinhardt C. , et al., 2009). This also makes it possible for clients to offer value added services to their business by timely managing their work. Next feature come out to be the platforms in the cloud computing.
Figure 1.0
Cloud Business Model framework
Adapted from: (Weinhardt, Anandasivam, Blau, & Stößer, 2009)
The platform-as-a-service (PaaS) is a cloud infrastructure that provides with value addition from technical and business standpoint.  
Tailored business application and platforms are one of the best features which equip businesses in utilizing the best possible information and utilize it in a way which can provide it with excellent solutions. Also, applications are the important features which can play a major role in enhancing any managerial work and decision making. These are the actual interfaces which are provided to customers. Such applications are provided through the cloud platform where date can be entered, stores, or extracted. A new trend of integrating such applications and user interfaces with modern statistical and analytical softwares is there which provides an excellent opportunity to business managers to process data according to the need and take effectual and successful decision on strategic, tactical and operational levels.  Thus, such technological systems are providing entrepreneurs and start ups with excessive flexibility to expand their business on the edge of technology; and such is happening in our surroundings (Liu, Goraczko, James, Belady, Lu, & Whitehouse, 2010) .                                        

Disadvantages of Cloud Computing

Rick (2009) explains disadvantages of cloud computing. The industrial trend shows that many companies are interested in shifting their data in the cloud. Hence the cloud computing industry shows promising picture in the next decade. But, there are many potential problems which makes cloud computing a ‘liability’ rather than a source of business advantage. The reasons for the same vary; as trained experts and appropriate information is needed to run the system. Also, there are many of the inherent risk with the technology, most importantly security. In many cases, it has also been observed that the newly deployed system does not show good compatibility with the existing system and a complete business process restructuring is needed. Therefore, following are some disadvantages of using cloud computing:
Security: As cloud computing is completely based on the internet and data transferring, the entire organization set up gets more vulnerable to cyber crimes and online attacks. Storing data on physical storage devices under company’s own supervision seems to be more appropriate in such situations. Hence, proper security measures are to be ensured in order to have complete security of the data in the cloud.
Compatibility: One of the key issues seen with the deployment of cloud computing is the compatibility issue with the current IT system or complex business processes. Restructuring of existing IT technology or the business processes get necessary to peruse which dramatically increases the cost and the risk associated with another investment.
Availability: As the entire service concept is based on the internet and the data is also stored in the cloud, therefore any disruption due to electricity failure or the internet unavailability in any geographical area makes it difficult to use the system. Also, in many cases, it is seen that natural causes of destruction, for example earthquakes, hurricanes, floods, etc also poses a direct question of the availability of the cloud computing services through the provider. On the other side of the coin, time availability of data from the provider is also crucial in many cases for clients in order to avail the data or information in a timely approach.


It is a known fact that the growth of a business is dependent upon how technologically enhanced an organization is. The environment is getting competitive day by day on the basis of technology which adds speed and robustness to the deployment of products and services in the market. In this regard, cloud computing is the best solution in providing organizations with greater flexibility and time management for meeting demand patterns according to changing dynamics of the market. Also, there are potential disadvantages of cloud computing in the shape of availability of data, security and comparability with current business processes. But the advantages of such a technology have been given more importance. As a matter of fact, with passing time, technology used in cloud computing has also been enhanced with greater flexibility, sensitiveness, openness and more scrutinized security features. Cloud computing also empowers an organization to minimize wastage of time and resources by having an effective system of pooled resources. Also, utilizing such unique technology lets an organization flourish economical in such a competitive environment, where excessive outputs are needed with minimal inputs. Cloud computing also equips an organization with latest technologies with greater elasticity; which if compared on costs with conventional in-house computing systems, provide cost efficiency, time management and greater results. Hybrid clouds have also been researched deeply since they are proving to be an excellent way to provide comparability of cloud computing techniques with existing IT system of any organization and business processes; which are much hard to be changed. Therefore, cloud computing is a noble way to centralize data, information and communication of organizations which fosters effective sharing of resources in an organization. It also injects a sense of technological advancement in the business process which helps employees, employers, customers and all the stakeholders take better decision due to excellent and deep insights of the data and information shared through cloud computing.

Works Cited

Boardman, A. (2011, 07 02). Cloud computing helps employees work flexibly. Retrieved 11 03, 2011, from Microsoft website:
Diversity Limited. (2010). Revolution Not Evolution How Cloud Computing Differs from Traditional IT and Why it Matters. Diversity Limited.
Etro, F. (2009). The Economic Impact of Cloud Computing on Business Creation,Employment and Output in Europe. Review of Business and Economics .
Gens, F. (2009, 10 5). IDC’s New IT Cloud Services Forecast: 2009-2013. Retrieved 11 3, 2011, from IDC Web site:
Jäätmaa, J. (2010). Financial Aspects of Cloud Computing Business Models. Information Systems Science .
Liu, J., Goraczko, M., James, S., Belady, C., Lu, J., & Whitehouse, K. (2010). The Data Furnace: Heating Up with Cloud Computing. Microsoft Research Center.
Loeffler, C. Optimizing your Infrastructure for Cloud Computing: Best practices for managing a cloud IT environment. 2011: Eaton Corporation: White Paper.
Mrdal, S. (2011). Would Cloud Computing Revolutionize Teaching Business Intelligence Courses. Informing Science and Information Technology , 1-9.
Rick, L. (2011). How to Overcome the Disadvantages of Cloud Computing. Cloudweeks.
Vael, M. (2010). Cloud Computing Advantages: Why you should go for it. Cloud Computing Task Force.
Weinhardt, Anandasivam, Blau, & Stößer. (2009). Business Models in the. IEEE IT Professional , 11 (2), 28—33.
Weinhardt, C., Blau, B., Borissov, N., & Stößer, J. (2009). Cloud Computing –A Classification, Business Models,and Research Directions. Business & Information Systems Engineering , 391-400.

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