The cloud is transforming how small and medium-sized businesses use Information Technology, offering consumption-based resources and services that can scale up or down based on the business needs. This paradigm shift is creating new revenue streams for partners as they look to broaden their customer base by moving to cloud-enabled solutions and services.
Figure 1.0 shows various cloud based offerings that can help business gradually migrate to the cloud –
IaaS service providers allow business to avoid the large capital expenditures associated with hardware infrastructure and data centers. This enables an organization to use the hardware infrastructure of a service provider to support it's business functions, including the provision of servers, networking components, storage and processing. The service provider owns the equipment and is responsible for hosting and maintaining it. The client does not manage or control the underlying cloud infrastructure, but has control over operating systems, storage, and deployed applications.
Platform as a Service (PaaS):
Along with the infrastructure, providers of PaaS also provide an organization with the support for the software middle tier allowing customers to develop, run and manage their applications without the complexity of software component installations like web servers, database servers and application servers. The customers only have to manage their data and application software, everything else is managed by the service provider.
Software as a Service (SaaS):
SaaS is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. Customer’s typically access the software using a thin client via a web browser and a thick client with advanced features. SaaS has become a common delivery model for many business applications, including office and messaging software, payroll processing software, DBMS software, management software, development software, collaboration, customer relationship management (CRM), management information systems (MIS), enterprise resource planning (ERP) to name a few.
One of the biggest selling points for these companies is the potential to reduce IT support costs by outsourcing hardware and software maintenance and support to the SaaS provider.
In terms of disadvantages - The cloud based model brings with it dependence on a specific provider. As a result, it is critical to choose a very reputed and reliable provider.
Fixed Capacity and performance bottle neck:
Infrastructure capacity planning is done based on peak business seasons and volumes.
Imbalanced infrastructure and business peak growth bursts lead to major performance issues, which impact revenue.
Planning capacity for growth bursts means larger infrastructure at higher capital expense, which is under-utilized most of the time.
Operation costs are fixed based on original design and cannot be scaled down or adjusted as per business needs.
High availability and higher cost:
Redundant hardware for unexpected failures can add 2 to 3 times the cost.
The IT department needs to be equipped and staffed with resources to monitor and maintain the infrastructure.
Disaster recovery & Business continuity overhead:
Most of the businesses are not prepared to deal with unexpected disaster or unexpected service downtime.
Management focus overhead:
Management has to plan and focus on core business functions while dealing with IT infrastructure challenges.
Highly Scalable and self-provisioning:
Ability to scale with demand for peak loads and seasonal variations thus optimizing the cost model.
Business can adapt to their needs by self-provisioning resources, such as processing capability, storage and network resources.
Investments are translated from capital expense (CAPEX) to operational expense (OPEX). Additional investment may be applied based on the success of the initiative.
Reduction in total cost of ownership, Supplemented by a pay for what you need, when you need it approach.
Highly available and lower cost:
Redundant hardware and seamless failover as needed provides close to zero downtime.
No concerns regarding complexities and the expenses of managing underlying infrastructure.
Built-in Disaster recovery & Business continuity:
Cloud infrastructure is equipped with the latest geo-redundant hardware for seamless transitioning.
Management focuses on core business:
Management can focus on the core business functions rather than having to deal with IT infrastructure.