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The Benefits of Cloud Computing for Business

Understanding Cloud Computing and how it can help small businesses reduce IT costs and improve efficiency.

 

Cloud Computing is a new trend that most SME businesses are failing to take advantage of. Most businesses do not fully understand Cloud Computing and hence are unable to gain from the cost savings and improved operational efficiency it offers.

This Business Guide will help busy owners understand Cloud Computing, how it works and the benefits it offers thereby enabling them to assess whether it is suitable for their business.


WHAT IS CLOUD COMPUTING?

Cloud Computing is a technology innovation that enables computing power and services to be delivered and accessed through the Internet, provided as a service instead of as a product. Customers access applications, operating platforms, data storage and other computing resources via the Web and do not need knowledge of or expertise in managing the underlying technology infrastructure. 

This means that a business can scale its technology needs to meet demand when required. This can lead to significant cost savings since the business no longer have to purchase, maintain and upgrade expensive hardware or software licenses.

For the more technically minded Cloud Computing incorporates the following characteristics.

IaaS – infrastructure as a service

Rather than purchasing servers, software, or network equipment, client’s purchase these resources as an outsourced service and are billed based on the amount of resources consumed.

PaaS – platform as a service

This is the delivery and use of applications without the upfront cost of buying and managing the hardware and software

 SaaS – service as a software

This is the use of software whereby the provider licenses the application to a customer to use as required on—demand.

In summary Cloud Computing provides business applications online that are accessed via the Internet whilst the software and data are stored on the service provider’s servers.

To find out more about Cloud Computing click on the one of the titles below:

  1. What is Cloud Computing
  2. What is Cloud Computing by Salesforce.com
  3. Cloud Computing Slideshow

  

HOW DOES CLOUD COMPUTING WORK?

Imagine the following scenario.

You are a busy business owner/director or manager and one of your many tasks is to ensure that your employees have the right hardware and software to carry out their work. This means buying computers, purchasing software and maintaining the license. If you hire a new person you have to ensure that your software license allows another user. You also face daunting upfront costs.

In Cloud Computing customers do not purchase and own the physical infrastructure. They avoid the high capital cost by renting usage from a third-party provider and paying only on usage.

Similarly, applications and software is only paid for as it is consumed. Some companies charge based on the amount used whilst other charge based on a subscription basis.

 

WHAT ARE THE BENEFITS OF CLOUD COMPUTING?

Cloud Computing is fast evolving commercially viable alternative for companies seeking cost-effective solutions. Gartner Inc. predicts that by 2012, 80% of Fortune 1000 enterprises will pay for some cloud-computing service, while 30% will pay for cloud-computing infrastructure.

Whilst the technology has its drawbacks such as privacy and security concerns (these will be discussed further on) the benefits it offers is turning skeptics into enthusiasts.

Some of the benefits it offers are as follows:

1.     Easy Access: Access to data from any location with an Internet connection.

2.     Scalability: An organisation can add or reduce capacity as demand dictates and, companies pay for only what they use.

3.     No Up-Front Capital Expenditure: Without the need to purchase hardware, software licenses or implementation services, a company can get its cloud-computing arrangement off quickly — and for a fraction of the cost of a traditional solution. 

4.     Storage: No need for maintaining a physical storage device 

5.     Frees Up Internal Resources: By placing storage and server needs in the hands of an outsourced supplier, a company reduces the burden on its in-house IT team. 

6.     Maintenance & Upgrades: No ongoing costs of maintaining and upgrading an on-site storage system’s hardware and software

7.     Easy Billing: Pay-as-you-go or monthly subscription allows for reduced operating expenses

8.     Flexible: Can add and remove capacity based on real rather than projected storage needs

9.     Experienced Providers: Cloud Computing vendors are well known, reputable and offer customers reliable service and are large enough to deliver huge amounts of storage and computing capacity. These vendors include industry giants  Microsoft, Google, IBM, Yahoo! Inc. and Amazon.com Inc.

10.  Quality of Service: Cloud Computing providers offer 24/7 customer support and an immediate response to emergency situations.

11.  Disaster Recovery: disaster recovery is offered by all the providers.

12.  Customisation: The Cloud Computing infrastructure allows for customisation and application configuration.

 13.  Reporting: Providers offer detailed report generation thereby freeing up valuable IT resources.

 

KEY PLAYERS

Some of the main providers are Vmware, Sun Microsystems, the rackspace cloud, IBM, Amazon, Google, BMC, Microsoft, Yahoo and for SME businesses  salesforce, IT Farm, CirrusStratus & Star

 

RISKS ASSOCIATED WITH CLOUD COMPUTING

According to analysts firm Gartner, Cloud Computing is fraught with security issues. The report \"Assessing the Security Risks of Cloud Computing.\" should be read in order to better to understand the issues

Here is the summary of the security issues the report says customers should raise with vendors before selecting a cloud vendor.

1.      Privileged User Access: Who has specialised access to data and about the hiring and management of such administrators?

2.      Regulatory Compliance: Is the vendor willing to undergo external audits and/or security certifications?

3.      Data Location: Does the provider allow for any control over the location of data?

4.      Data Segregation: Is encryption available at all stages, and were these encryption schemes designed and tested by experienced professionals?

5.      Recovery: What happens to data in the case of a disaster, and does the vendor offer complete restoration, and, if so, how long does that process take?

6.      Investigative Support: Does the vendor have the ability to investigate any inappropriate or illegal activity?

7.      Long-term Viability: What happens to data if the company goes out of business, and is data returned and in what format?

8.     Data Availability: Can the vendor move your data onto a different environment should the existing environment become compromised or unavailable?

In practice, one can best determine data-recovery capabilities by experiment; for example, by asking to get back old data, seeing how long it takes, and verifying that the checksums match the original data.

You may also consider using the services of an IT security company to assess the risks

 

This article was first published on June 2009 and may not necessarily match current events or current opinions and views of Acumen Consulting Ltd. The information contained in this article is intended as a guide.

 


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