Cloud Computing Basics

Cloud computing has emerged as a cost effective alternative to having reliable computing resources without owning any of the infrastructure. The growth of this technology mirrors the growth of computing in general. The options offered by cloud services fit the needs of businesses of all types. As a truly global technology, cloud computing is growing rapidly, albeit without any global standards. The benefits of cloud computing are too numerous to hold back adoption. At present the goal is to meet the business needs and as the technology matures it will accommodate changes emanating from global standards. As the first step in this direction many of the major cloud service providers are joining multiple consortia to develop the standards. This chapter addresses the history of the growth of cloud computing and the three basic service types—SaaS, PaaS, IaaS—that help businesses of all types. We identify the major cloud service providers and the cloud service types that they offer. We discuss the ways in which cloud computing is supporting entrepreneurial activities. Our analysis shows further that the advancements in communications technology is benefiting cloud computing and makes it a truly global service. Moreover, cloud computing technology is making a major contribution to ecommerce.

Cloud computing’s marquee feature is the availability of all required software on the web. The principal service that provides this feature is Software as a Service (SaaS) and this is the leading type of service on the cloud. Medium sized businesses that have the ability to have computing expertise amongst its work force have the option of selecting Platform as a Service (PaaS). PaaS gives the business the ability to choose applications that fit their needs most by selecting multiple platforms from the cloud provider. Large and niche businesses have the option of selecting only the infrastructure from the cloud provider, thus benefiting from the Infrastructure as a Service (IaaS) option. In this chapter we will highlight the major benefits and certain drawbacks of these three important services in the cloud. Moreover, the cloud provides different modes in which an organization could benefit. The four basic modes are: public cloud, private cloud, hybrid cloud and community cloud. Public clouds are the most widely deployed and used by all small and medium sized businesses. Private clouds are predominantly used by large businesses that need to supplement their data centers in a reliable way. Hybrid clouds provide a way for a business to manage certain services in-house and use the cloud for some of their customer facing applications. The community cloud serves a vertical market such as health care or automotive where the users have some common features in their applications. This chapter will address the strengths and weaknesses of these four modes of cloud computing. We will conclude this chapter with a survey of Storage as a Service that is gaining ground as an important cloud service.

Cloud computing has become very popular because it offers a wide range of computing services to a large group of businesses and individuals. Businesses have many choices to select a cloud service provider. The process of selecting and deploying the cloud service requires careful thinking on the part of the business to weigh the benefits against the possible drawbacks such as lack of control over the computing resources, applications and data storage. In this chapter we discuss in detail the many benefits and drawbacks of this service. Small and medium sized businesses tend to benefit from cloud computing because they are able to use sophisticated computing services without a large cash outlay. Individuals benefit from the ability to store and share information using the cloud. It is important for businesses to evaluate the various cloud service providers against their offerings and their fit with the business. The analysis in this chapter highlights the things that a business should look for in contracting with a cloud service provider. Even though cloud services are known for their high reliability and availability, over the past 5 years there have been several well-publicized outages. Because of the outages several other niche service providers who depended on other major cloud service providers were unable to deliver their service. We conclude this chapter with a detailed analysis of several cloud outages over the past 5 years that have eroded the confidence of businesses on the availability aspects of cloud computing as a 24 × 7 service. This discussion highlights the importance of service availability to build trust.

Cloud computing is popular today because of the reliable services provided by major companies such as Amazon, Google, Microsoft, Rackspace and Terremark. In order to provide reliable cloud computing service the provider must invest large sums in infrastructure. Their architecture includes several redundancies. Each of these global service providers have several data centers spread all over the world. These data centers help cloud consumers meet their governmental requirements that cloud data must reside within the country or in the region. Moreover, these distributed data centers facilitate storage redundancy and help with low latency response. Also, these providers offer some or all of the three types of cloud services—SaaS, PaaS and IaaS. Besides these cloud service providers (CSPs), there are also several niche cloud service providers such as Salesforce, Apple, VMware, Dropbox and SoftLayer. These companies focus on specific services such as Customer Relations Management (CRM), music distribution, virtualization, storage and bare metal servers. Another set of businesses focus on providing third party coordination of service for businesses needing cloud service. In this chapter we describe the services offered by the major cloud service providers, niche cloud service providers and highlight the important role that these third party facilitators provide and how small and medium sized businesses could benefit.

Security aspects of cloud computing draw much attention. Many cloud customers feel that their lack of control over hardware and software makes their information vulnerable for compromise on the cloud. The security issues surrounding the cloud vary among the different types of cloud services such as SaaS, PaaS and IaaS. Among the cloud deployment models only the public cloud has several vulnerabilities. Businesses feel that since they do not control the cloud infrastructure any data stored in the cloud is insecure. It is more a perception issue than something that is inherently insecure. The cloud service providers are trying to reassure the public of their security practices and provide third party audits to back up their claims. Moreover, all the major service providers seek the enhanced SSAE 16 Type II Audit and the ISAE 3402 international reporting standards compliance certification. In this chapter we will analyze the security implications for businesses from the perspective of compliance with laws and industry standards as well as certifications carried by the service provider. Moreover, the service providers facilitate implementing both access control mechanisms and organizational control policies to limit the number of privileged users with access to customer data. Also, we discuss the proactive steps an organization could take to protect their data in transit and storage.

Cloud computing is widely accepted by businesses of all sizes. However, the level at which the adoption of cloud computing has moved varies significantly based on company size. Small businesses that lack the people or financial resources to manage a computing system mostly have embraced cloud computing without too much reservation. Medium sized businesses also benefit from transferring the management aspects of a computing system to the cloud. Large businesses have an option to use their internal systems exclusively or to transition some services to the cloud and keep the more sensitive applications in-house. This hybrid approach is expected to last for a while. Businesses consider cost savings as an attractive feature but require more control over their infrastructure. For this reason the private cloud deployments are growing rapidly. Cost comparison for cloud service versus in-house computing environment shows that private clouds are still cost effective. In this chapter we assess the reasons for companies moving to the cloud. This assessment includes cost, availability of service, reliability and security. We study in detail the cost factors of cloud computing and how it could help with cost savings for businesses. We analyze the risk components of cloud service and discuss how businesses could mitigate the cloud risk by using third party controls. One of the important things to note is that businesses tend to use a form of cloud service indirectly. We analyze in depth how outsourcing compares with cloud computing.

Cloud service providers offer a contract to their customers. The contracts do not deviate much from one another. The cloud service provider prefers the contract to be executed as a click-through online. In a way the cloud service providers keep the contract standard without customization. There are two main reasons for the standard contract. First, the services are standardized and the customer has the full range of services to look at and decide on the services that they want. Second, with numerous customers it will be impossible to manage customized contracts that differ from one another. Review of the standard contract reveals that the Service Level Agreement (SLA) does not give the customer much recourse. Invariably the SLAs favor the service provider. There is a new trend among cloud service providers and customers to seek insurance to mitigate the risks. In this chapter we look at the many hidden aspects of a cloud contract and point out where clarity is needed. Cloud service providers have privileged users who have the potential to access customer data on the cloud. The standard contract does not specify how privileged users will be monitored. Also important to the customer is the ability to switch service providers and move data across providers easily. This requires the service provider to have the resources to support high speed data transfer in a standardized format. We will look at the provisions made in the contract for such a move.