Is Cloud Computing really Cost-Effective? Essay

Since cloud environment does not reside in a capital facility, there is a substantial saving of the time and space. Also, it provides users access only to the resources they need for a particular task. This prevents them from paying for idle computing resources. Besides, there are competing providers for this service and an organization can always shift its business to another company offering better service or lower price. In terms of statistics, we spend $6,000 per month to update software, maintain our computer lab, and pay our employees. However, implementing a cloud computing with a constructing price of $2800 will incur a cost as low as $249 per month (Hinchcliffe 2009).

Enterprises around the world would be wise to heed 50 Cent’s mantra ”Get Rich or Die Tryin’” when considering the implications of not “getting” to the public cloud. We at Cocolevio, an implementation partner of Mooor Insights & Strategy, estimate that over 50% of IT spend will be going to public cloud vendors such as Amazon Web Services or SaaS vendors like Salesforce.com Inc. by 2019. This means there is around a $140B opportunity in this space. The cost savings, reduction in capital spending, speed to market, flexibility and global access derived from public cloud mean those enterprises that effectively use the public cloud are better positioned to “Get Rich” than their competitors who have higher cost structures and less nimble IT platforms. This trend is only set to continue as the business case for moving to public cloud only becomes more compelling, with the traditional arguments against public cloud around security and lack of control diminishing. Vendor lock-in will continue to be a concern but we see many companies willing to sacrifice a bit of lock-in for the many, many benefits of public cloud.

There are a multitude of benefits in the utilization of cloud computing. A primary function of cloud computing is the availability of universal access to files throughout any given level of an organization. As documents and other database driven information are stored off-site, there is often a reduction of costs, due to the minimization of on site hosting software and hardware alike. The many reasons to utilize cloud computing are evident, however, as all other technological advantages, there are also a large variety of companies that offer these services with different benefits, costs and application choices. Some of the most recognized corporations offer cloud computing such as icloud, Google Apps, Amazon Cloud Drive, and many others. All organizations offer

There are several advantages of using Cloud Computing, for example: “To begin, businesses can have lower cost computers for users.” Alijabre explains that cloud computing can be very beneficial for the businesses. Moreover, businesses will bring great amount of profit into their company, and it will be easy to use it. Alijabres goes on to provide several examples why cloud computing is better. One of of the most important reason why companies are moving towards cloud computing is the lower cost of the system. “To begin, businesses can have lower cost computers for users.” He explains that small business will not need computers that are high performance based. Business can get less expensive computers and store all of their data online instantly, without having them to worry about the space in a

Cloud computing offers many advantages to both end users and businesses of all sizes. The advantages of cloud

The focus of cloud computing is providing with scalable and a cheap on-demand computing infrastructure with a good quality of service levels. The process of the cloud computing involves a set of network enabled services that can be accessed in a simple and general way. Cloud computing provides with a unique value proposition for any organization to outsource their information and communication technology infrastructure. Moreover, the concept itself provides with a value proposition for an organization as using the cloud saves on cost, resources, and staff, and business opportunities for the organization (Katzan). An extensive connectivity of

Cloud computing will cut costs on the front end; but, in the long-term, we will see other expenses. Access control is more difficult due to the external location of the system. Compliance with data storage policies can be a tremendous concern in a cloud computing system; meaning administrators will need to conduct scheduled cleanups of the network.

Most traditional online computing services offer business services that are bundled. Accessing the Cloud, Riordan will only pay for services used while saving the company money. These three characteristics proves that cloud computing is efficient and has more benefit than traditional computing (Hartig, Dec).

This research paper tackles the issues that faces Cloud Computing today and gives the experts and industry’s point of view on the matter. The aspects explored are the significant industry questions that have risen about the use of Cloud Computing, business value, organization impact, adaptability, limitations, initial cost of implementation, and the severe business security risks

Ultimately, these figures translate to profitability thereby fulfilling one of the primary goals of business which is to generate profit (Aljabre, 168). One of the major reasons behind the choice of using cloud computing and incorporating it into the basic framework of business transaction is efficiency. Cloud computing utilizes minimal renewable resources that cold the business a very insignificant amount compared to the returns it will retain in the form of profits and customer satisfaction. Cloud computing enables the business to streamline its IT operations thereby eliminating any wasteful channels that drain resources and increase the cost of operations. The concept of cloud computing render it as a n internet based operation that provides efficient and effective handling for the employees of a business through improved accessibility and limited space consumption (Gorelik 109). Every other merit that cloud computing affords business is down to the effectiveness or efficiency its use brings upon the business entity which will eventually reflect on the profitability of the business.

With the help of cloud computing, small business goes onto the market quicker and keeps growing without worries about IT resources. According to the academic research survey, there are about 34% of Small business are willing to transferring to Cloud is because cost effective and reliable, 32% of them are trusting the safety and security environment of Cloud to store their important business data5. The remaining of the small business because the availability of services and sharing data facilities that Cloud providers provide6. With the help of Cloud services, SMEs will

Cloud computing has drastically reordered the economics of how every size and type of business uses software. For the large enterprise there is no longer the need to go through an extensive capital expense (CAPEX) budgeting process, often involving the board of directors of a business (Aljabre, 2012). Cloud computing software is often pad for through operating expense (OPEX) budgets, which shifts the control of its budgeting to the line-of-business managers or those managers and executives responsible for a given business unit. This dynamic alone has completely reordered the enterprise software market, as cloud-based applications can often be modified significantly faster than on-premise applications (Lin, Chen, 2012). As a result of this flexibility, enterprises, medium-size and small businesses are all relying on cloud-based applications to automate those process areas that had been expensive and

Alternatively, if it resides in-house then the IT resources would need to remain and maintain the cloud. There again lies the decision of how the company would need to allocate the cost and resources to move towards cloud computing.

Services such as, data storage and security, are provided by cloud computing over the internet. In cloud computing, users can pay for what they consume (Bisong & Rahman, An Overview of the Securtiy Concerns in Enterprise Cloud Computing, 2011). Cloud computing is an emerging information technology, which can make it easier for the users to manage their data. Cloud computing allows businesses to expand as new cloud-based models are being discussed and implemented as solutions (Bamiah & Brohi, 2011).

SaaS is becoming an increasingly prevalent delivery model as underlying technologies that support Web services and service-oriented architecture (SOA) mature and new developmental approaches, such as Ajax, become popular. SaaS is closely related to the ASP (application service provider) and On Demand Computing software delivery model