Case: Should Businesses Move to the Cloud

Q1. What business benefits do cloud computing services provide? What problems do they solve?

Cloud computing has become a standard method of software operation for many businesses. It offers many significant advantages, including potential cost savings. There are, however, some significant risks associated with cloud computing.

What business benefits do cloud computing services provide?

•      Amazon Web Services (AWS) support the biggest marketplace for global trade.

•       The cloud computing can provide customers many sources which they want to get, like Zynga which is the developer of Facebook applications like FarmVille.

•      If companies use the cloud computing in business, they can reduce lots of cost which support and maintenance on the hardware and software.

•       Cloud computing solves many problems, such as reducing cost; improve efficiencies, providing sources for customers, and remote services.

What problems do they solve?

•      Expensive IT: Cloud computing levels playing field business and their enterprise counterparts by delivering affordable and accessible IT solutions. Cloud computing presents an economic advantage to business by providing IT solutions at a lower cost and increased access to data from virtually any device

•      Mobility Restrictions: Businesses are eager for increased mobility of business applications on smartphones, which rely on timely updates only available from cloud-based software management. Cloud-based providers solve the challenge of mobility by providing service updates almost immediately, which bring enormous productivity gains

•      Limited Growth Capacity: The cloud can hold an unprecedented amount of data and cloud technology can be continuously rescaled to fit a company’s changing needs. Cloud capabilities offer companies more opportunities and greater reach, solving the daunting challenge of limited growth capacity. 

Q2: What are the disadvantages of cloud computing?

Cloud computing has its risks and disadvantages, however. Its dislocated nature, which is an advantage in many cases, can also be disadvantageous because the user loses control over the software application and becomes dependent on the provider to maintain, update and manage it. If something goes wrong, the user does not have direct access to the software and must depend on the provider to fix the problem. If the provider is unresponsive or unable to fix the problem quickly, the user can experience significant issues. For example, problems would occur if your company uses a cloud-based payroll software system and that system goes down the night before payroll is due. These problems would quickly become much worse if the provider is unwilling or unable to fix the problem and reliable backup services are not available. Similarly, if your company becomes dependent on a cloud-based software application and the provider is unable or unwilling to continue to provide that application, you will quickly encounter trouble.

This trouble would quickly become more serious if the provider was not required to give notice of the cessation of the application in time to allow your business to locate an alternative. In today’s turbulent economic climate, cloud providers may encounter financial problems or bankruptcy, either which could seriously impair or eliminate the provider’s ability to continue to provide the cloud services to your company.  Remember that these financial problems can happen quickly, and you will often have limited recourse in these situations.

Cloud computing can also bring substantial risks in the privacy and confidentiality areas. By using a cloud system, your company’s sensitive data and information will be stored on third-party servers, and you will probably have very limited knowledge or control regarding this information. If the provider has inadequate security or encryption systems or procedures, or if a breach of these systems or procedures occurs for any reason, your company’s private and confidential data may become compromised. This could have devastating effects, and could cause legal problems for your company if third party confidential information (for example, customer information) is compromised.

Q3: How do the concepts of capacity planning, scalability, and TCO apply do this case? Apply these concepts both to Amazon and to subscribers of its services?

Ø  All these need a cloud computing to support these and these also can support the cloud computing.

Ø  Amazon is the one of the biggest online retailer over the world so that Amazon need a huge fixed cost to maintain and support the big cloud computing CRM for Amazon.

Ø  As an online retailer, products and customers are the most important thing to Amazon.

Ø  The demands of products are changing every day, so they need capacity planning to process it and capacity planning will take the Amazon in the best status.

Ø   During customers use the Amazon, sometimes there will be millions of customers, and maybe sometimes there just have thousands of customers, so the scalability will accommodate the Amazon into a right status in order to make sure it can reduce cost at the extreme.

Ø   At last, there are many sellers and buyers in Amazon, so the sellers and the customers are very take care of the cost in business.

Q4: What kinds of businesses are most likely to benefits from using cloud computing? Why?

•      Online business is the biggest user of cloud computing, at first online business need to process too much data and information online, online business also need save and keep many information of customers, so it need a strong cloud computing to support it.

•      Using the cloud computing can get the maximum level of reducing cost.

•      From example, the customers need to use digital media to upload or download much information so they have to have a strong cloud computing to support the services.

•      Logistics business also needs to use cloud computing to support the services that logistics business offers.

•      Switching information systems to the Cloud – thus abolishing the need for extensive in-company infrastructure and altering the way Business Intelligence is used to support decision-making – will enable firms to speed up their product development processes and to achieve profitability much more rapidly, argues Business Intelligence specialist Micro Strategy.