This article aims to explain the idea of cloud computing and how it works. Cloud computing will then be considered in the context of modern businesses and some examples currently in use will be given in order to contextualise this technological development. The article will then look at the critical reception of cloud computing which will cover the main negative aspects of the model.


It is likely that any individual currently using the internet will be using cloud computing services already. Google Mail, social networking sites like Facebook, online banking, blogging sites such as Tumblr and internet television services all work using cloud computing. Even this wiki is a form of cloud computing with software being hosted online and then the data created and stored online.

Cloud computing can also be used for business applications where it “provides a compelling value proposition for organisations to outsource their Information and Communication Technology (ICT) infrastructures” (Chang et al, 2010, p1). According to Armbrust et al (2010) cloud computing has many positive factors for developers with idea for new online services as they will no longer need to pay out large amounts of capital for hardware or for people to run their service. Most importantly cloud computing provides “elasticity of resources” (Armbrust et al, 2010). This means that because it costs no more to use a single server for one hundred hours or one hundred servers for a single hour companies can allow for their service being more or less popular than predicted with no effect on the cost of using cloud computing. This “is unprecedented in the history of IT” (Armbrust et al, 2010).

What is Cloud Computing

Mell and Grance (2011) define cloud computing as “a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources...that can be rapidly provisioned and released with minimal management effort or service provider interaction.” Rather than attempting to redefine cloud computing Han (2010) instead lists the characteristics of cloud computing whish are: customers do not own network resources, such as hardware, software, systems, or services;network resources are provided through remote data centres on a subscription basis; and network resources are delivered as services over the Web (Han, 2010).

Mell and Grance (2011) discuss the various service models which can be used in cloud computing. The first is Software as a Service (SaaS) where “the capability provided to the consumer is to use the provider’s applications running on a cloud infrastructure” (Mell and Grance, 2011). In this case the user does not have any control over the underlying cloud infrastructure but simply access applications such as web-based email through their internet browser.

The second model is Cloud Platform as a Service (PaaS). In this instance “the capability provided to the consumer is to deploy onto the cloud infrastructure consumer-created or acquired applications created using programming languages and tools supported by the provider” (Mell and Grance, 2011). In this case the consumer doesn’t manage or control the underlying cloud infrastructure but does have control over the deployed applications.

The final model mentioned is Cloud Infrastructure as a Service (IaaS). With this model “the capability provided to the consumer is to provision processing, storage, networks, and other fundamental computing resources where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications” (Mell and Grance, 2011). The consumer still does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, deployed applications.

Cloud Computing in the Modern Business Context

The following video comes from Salesforce who are one of the leading IT investors in cloud computing, it gives a brief overview of what cloud computing is and how it can be used by businesses. This focuses on how an existing business or potential business could take advantage of the cloud computing business that is Salesforce. For example a manufacturing company could use Salesforce to run their office applications from.

Chang et al (2010) looked at the way a business could run making use of the emergence of cloud computing. Rather than looking at an end user of cloud computing services this looks more at the company providing the service through cloud computing, for example the previously mentioned Sales force or Amazon’s EC2 or S3 services. Chang et al (2010) then reviewed the current cloud computing business models using the Cloud Cube Model which was proposed by The Jericho Forum and “is used to enable secure collaboration in the appropriate cloud formation best suited to the business needs” (Chang et al, 2010).

Figure 1: The Cloud Computing Model
This model is applied to eight different businesses. The first model is that of a service provider where a public cloud is offered which include infrastructure, platform and software as a service. The second is support and service contracts, these “deal in proprietary solutions for private domains” (Chang et al, 2010). The third is in hosting private clouds; these operate internally and are suitable for business developing their own private cloud. The fourth model is an all-in-one enterprise cloud which is ideally suited to large organisations but not suitable for the majority of small and medium enterprises. The fifth model, one-stop resources and services, has similar characteristics to the service provider model except it often combines in house and outsourced efforts, the best example of this would be the community clouds used by a specific organisations where they exist in the public domain but are for restricted users. This model would be applied to the Wikispace Private option when creating a wiki, where although the cloud on which this data exists is public on registered users can see or edit the data in the wiki. The sixth model mentioned is government funding which would act the same as any government funded work. The seventh is venture capital which is useful for start-ups and can be seen as similar to the government funded model but with private investment. Finally the business model of providing entertainment and social networking is considered; in this case it is typically an outsourced proprietary business.

This shows that cloud computing offers nearly as many opportunities for new ways to do business as was the case when the dotcom business became popular. Cloud computing though is a more sustainable growth in business as it is more of augmentation of a current business area rather than the creation of a new one. This can be seen where Microsoft are showing interest in taking their existing IT products and converting them in to cloud based applications.

Velte et al (2010) discuss the business case for going to cloud computing, they explain that while there are instances when a business should move to using cloud computing there are also instances when a company should not move to cloud computing. The decision should be based on what the organisation needs to accomplish and whether or not cloud computing can help do it. As previously mentioned cloud computing can exist in three different service models: Software as a Service, Platform as a Service and Infrastructure as a service (Mell and Grance, 2011). These different models can be used by businesses for different ends. The most effective way to show the features of each of the models for a business is through examples which will be discussed in the next section.

Examples of Cloud Computing

Software as a Service: Salesforce for Google Apps

This is “a combination of essential applications for business productivity...and CRM...that enables an entirely new way for business professionals to communicate, collaborate, and work together in real time over the web” (Velte et al, 2010, p75). This method provides applications created and run by a third party so removes the cost and complexity of managing the hardware or software infrastructure. With features like: Gmail, Google Docs, Google Talk, and Google Calendar this can transfer the majority of the businesses day to day IT work onto the cloud. The senior vice president of AppExchange at Salesforce, Steve Fisher, said that by combining Google and they are “making more applications and services available online so customers can focus on building their core business rather than the applications that support it” (Velte et al, 2010, p 75).

This idea of Software as a Service doesn’t just have benefits to the buyers but also to the vendors (Verma, 2011, p35). These include: easy maintenance, more customers, more accurate predicted cash inflows, low cost, and good customer relationship management. This means that cloud computing SaaS is not just good for companies needing the services but also allows IT companies to provide a service which will be beneficial for them to sell.

Platform as a service: RightScale

RightScale “has entered into a strategic product and partnership” (Velte et al, 2010, p72) which means that it allows users to access other cloud services so that when they create an application it can be spread as efficiently and effectively as possible through cloud vendors such as Flexiscale, GoGrid and Amazon EC2. Right scale allows applications to be deployed once and then managed across these and other clouds through its integrated management dashboard. One of the benefits of this company’s Platform as a Service model is that it allows customers to use their existing software, such as Microsoft Office programs, so it is easier for the organisation to make the transfer over to cloud computing. By providing this service on a pay-as-you-go basis with resources being expanded and contracted as needed organisations can run unique applications for their business with minimal effort and less expense than previously possible through traditional IT solutions.

Infrastructure as a Service: Amazon EC2

Amazons EC2 (Elastic Compute Cloud) is one of the most prevalent providers of an Infrastructure as a Service. Also referred to as everything as a service this is where a virtualised server is provided for software to be run on (Velte et al, 2010, p69). Amazon’s EC2 provides flexible and easily controlled computing capacity that is accessed over the web. Rather than providing applications or the tools to run application this essentially gives an organisation access to servers. The benefit are that because this accessed as a utility with organisations only ever paying for the amount of infrastructure they are using and can be scaled up and down as necessary with minimal friction.


In 2007 Nicholas Carr, the former executive editor of the Harvard Business Review, posted to his blog the idea of a computer made by Google and Apple which would as a way of accessing the internet and nothing else. He proposed that Apple would make an inexpensive laptop type device which would access and use the computing power of Google’s data centres and applications to provide a new kind of cloud computer (Pollette, 2008).

In June 2011 the Google Chromebook began shipping; this device was produced with hardware from Acer or Samsung rather than Apple. As the following video shows; this is not a computer like any other available.

Google also show that the Chromebook has qualities which make it an excellent choice for a business.

The Chromebook has been criticised by some people (Stein, 2011; Paul, 2011; Vaughan-Nichols, 2011) with concerns over a lack of virtual private network, some wifi security systems not being supported, and problems using the file manager, issues over systems access, and a lack of manual documentation. One of the most obvious problems with having a device that works like this is that the speed at which a business’s software applications would run would be affected by the internet connection it is using. It would seem likely that anything more complex than the most basic application would slow down if run on a poor broadband cannetion.
It does however represent a step towards a computer system where the unit being operated by the user doesn’t run any programs itself but instead relies on the internet to access far more powerful machines than would ever be possible to contain a person’s home. For a business this would also be useful because it would means less maintenance as a fleet of chromebooks can be configured and managed centrally through the web. It would ensure all users were using the same applications so there would no compatibility issues and security would cost less for the company as the chromebooks are built to require no virus protection.

Critical Reception of Cloud Computing

Velte et al (2010) explain that are down sides to cloud computing as there are with everything in IT. As the service is being hosted elsewhere and accessed through the internet any problems that an individual or company has getting online will mean they cannot access the data or applications they need, it is also true that any problems at the other end will result in a similar situation. “In July 2008, Amazons S3 cloud storage service went down for the second time that year. A lot of applications were hosted by the company and all those services could not be accesses until techs could fix the problem” (Velte et al, 2010, p6). Sehgal et al (2011) claim that “Cloud computing amplifies computer security issues that have proliferated with the growth of the Internet”.

Ryan (2011) talked about the privacy issues of Cloud Computing saying that “The problem of data privacy in general is of course well known, but cloud computing magnifies it”. A major concern is that those people who act as custodians over these vast amounts of data could accidently or deliberately alter or delete the data on their servers. This leads into compliance issues, cloud computer companies are forced to adopt less efficient cloud computing models which are more expensive and offer fewer benefits to the users. Howard (2009) gives examples of Google and Microsoft trying to comply with regulation set out before them in an effort to remain active. While Amazon has obtained SAS 70 Type II certification (Howard, 2009), however this has been criticised because the criteria which an organisation must meet to achieve this level of certification is specific to each case and the criteria are not made known to anyone other than the organisation and the regulator (Brooks, 2009).

Another issue which has been raised over cloud computing is the possibility for it to be abused. Cloud computing provides an individual or organisation with far greater computing power and capability than they would normally have access to but this can be used for immoral purposes. Sims (2011) wrote that “German security researcher Thomas Roth earlier this year showed how tapping the EC2 service allowed him to crack Wi-Fi passwords in a fraction of the time and for a fraction of the cost of using his own computing gear. For about $1.68, he used special “Cluster GPU Instances” of the Amazon cloud to carry out brute-force cracks that allowed him to access a WPA-PSK protected network in about 20 minutes.” This type of problem is one that has been exacerbated with each change in IT and how it is used so it would seem sensible to believe that this will be dealt with in time.

A podcast on Techstuff from discusses the darker side of cloud computing. Pollette (2008) believes that the main concern with cloud computing is the idea that as it is a system created primarily for sharing data it may result in the data being shared with the wrong people. His point being that in a system where ease of access is such a key point it does invite the issue of people accessing the data who do not have permission to, he suggests that this could even be employees at Google or Amazon or any other cloud provider. He also discusses how the fact that most cloud systems create backups on several different servers in many different ocations. This could lead to a physical machine being taken away with data on it rather than taking the data from the machine.

One concern that was raised in the podcast was the idea that as the physical servers can be located anywhere as the cloud network is not geographically constrained. It may be a problem that data created and accessed in one country may be stored in another country which has less stringent data protection laws (Pollette, 2008). He does conclude though that these issues will be dealt with by the organisations providing the service as they would need a secure cloud in order to remain in business. This is something that may need to be considered by organisations setting themselves up to provide a cloud computing service. A compromise may have to be reached between supplying a cheap service and keeping the data secure through such considerations as the location of the storage and traffic servers.


Cloud computing is an exciting change in the way IT works, it offers individuals but especially businesses a new way to operate. For organisations making use of a cloud computing service, whether it’s as simple as software as a service or more complex like platform or infrastructure as a service, it offers a wealth of benefits. By proving access to much greater computing power businesses can use business application to support their core business without the expense of running these applications through their own servers. Due to the pay-as-you-go nature of cloud computing coupled with the ability to scale up and down quickly and easily companies can make a saving compared to running business applications from a server with a large fixed cost for purchase.

Businesses which provide IT services can also make a lot more from cloud computing than tradition software, platform, and infrastructure provision. They will receive more custom because they are offering a better service which is less complex than traditional IT solutions and they will find it easier to retain customers because the monthly payments aid in the formation of relationships with their clients. There is also a large amount of variety in the kind of cloud computing solutions that can be provided. From simple online backup storage like that offered by Dropbox, to online applications, such as Prezi, right up to more complex infrastructure and platforms such as Amazons S3 and EC2 services.

It should be noted that there are issues with cloud computing but it would seem that most experts believe that the more adoption of the idea there is the quicker these will be resolved as market pressure forces businesses to solve the problems or lose their customers to another provider. Even at the moment the problems being faced through the use of cloud computing are only magnifications of those faced when using traditional computing methods and it would seem that with so many benefits to cloud computing the gain outweighs the risk.

The next step forward is already being made with the release of the Google Chromebook. This particular product may have its faults but as cloud computing grows in popularity increases it seems likely that this kind of product will become more common place along with the tablet format which also allows users to access application powered over the internet more that from the hardware they’re using.


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