Directors Report March 2017. Cloud Computing For Management (£)

This is a Single Report, which focuses on Management’s need to understand Cloud Computing and the range of opportunities and issues that Cloud represents for an Organisation.

This Report has been edited to enable reading in a short period of time - in 15 to 20 minutes.

Cloud Computing Analysis Report: 

For Management and Directors Engagement, Discussion and Understanding 

Synopsis

Cloud Computing defines a model of networked computer power where an application, or electronic program, runs on a series of connected servers outside of your organisation’s borders, rather than on your local system and computing devices. 

Today, utility services, such as water, electricity, gas, and telephony are deemed necessary for fulfilling daily life routines. These utility services are accessed so frequently that they need to be available whenever the consumer requires them at any time. Consumers are then able to pay service providers based on their usage of these utility services. These systems and processes are similar to what Cloud Computing now offers. 

In the simplest terms, Cloud Computing means storing and accessing data and programs over the Internet instead of via your own computer's hard drive. The Cloud is just a metaphor for the Internet.

The Cloud works by sharing computing time and resources. Therefore, rather than using a local server or personal device to process and handle applications Cloud Computing uses the processing cycle of a network of computing systems and power.

Cloud Computing, often referred to as simply “the Cloud,” is the delivery of on-demand computing resources. Cloud Computing is a multitude of services that are usually provided over the Internet on a usage and metered basis. 

The electronic Cloud is now beginning to become a significantly broader landscape-altering technology and is beginning to have increasing rates of adoption and implementation. 

The Cloud has the potential to not only become a defining technology of the twenty-first century, but also as defining utility, just as electricity was for the twentieth. This involves the sale of computer software and hardware as services, which an organisation can rent instead of purchase. 

The Cloud is run and sustained by cloud service providers through a network of server farms, which offer their subscriber’s unlimited availability and data storage, along with seamless access to software, applications provisioning, and automatic upgrades.

There are many reasons to switch to Cloud Computing, including the ability to save considerable amounts of money while improving productivity and efficiency. However, there are some security issues that need to be recognised and monitored. 

Background and Cloud Depth

We are now on the cusp of a significant evolution in information technology, one which has the potential to completely change how organisational IT is provisioned, managed and protected. 

What is Cloud Computing?

There is still some confusion and argument, even amongst IT professionals, as to what Cloud Computing is and how it can be employed…

From CSI point of view it is a network technology that is separated from your organisation’s IT systems. It appears to be hanging like a cloud in Cyber-Space but is in fact just part of the Internet. 

The Cloud allows your company’s computing applications and data to be flexibly provided to your business from this Internet system or, outside pool of hardware and software resources. 

With Cloud Computing there is no longer a point-to-point connection between the user and the computing infrastructure. 

Data and applications are not held on one PC or one server or one network; they are held on a disparate conglomeration of computing resources.

Cloud Computing Architecture 

First there are the physical resources the computer hardware and hosting platforms and network connections. 

Second there are the systems management tools, which form the infrastructure as a service layer. These are typically data centres and virtualisation technology is used to maximise the use of physical resources, applications and the quality of service.

Third above is the Platform as a Service (PaaS), which binds all the middleware tools. 

Fourth at the top are the user-level applications such as social networks and scientific models that are hosted in the Software as a Service (SaaS). 

Types of Clouds: Public, Private, Hybrid

Not all Clouds are the same. There are three different ways to deploy Cloud Computing resources: Public Cloud, Private Cloud and Hybrid Cloud.

Public Cloud

Public Clouds are owned and operated by third-party Cloud providers, who deliver computing resources such as servers and storage over the Internet. 

With a public cloud, all hardware, software and other supporting infrastructure are owned and managed by the Cloud provider. You access these services and manage your account using a web browser.

Private Cloud

A Private Cloud refers to cloud computing resources used exclusively by a single business or organisation. A Private Cloud can be physically located on the company’s on-site data centre. 

Some companies also pay third-party service providers to host their Private Cloud. A Private Cloud is one in which the services and infrastructure are maintained on a private network.

Private Cloud services are delivered from a business' data centre to Internal users. This model claims to offers versatility and convenience, while preserving the management, control and security common to local data centres.

Hybrid Cloud

Hybrid Clouds combines both Public and Private Clouds, bound together by technology that allows data and applications to be shared between them. By allowing data and applications to move between Private and Public Clouds, Hybrid Cloud gives businesses greater flexibility and more deployment options.

Cloud Advantages for Businesses include…

Buoyancy – One big advantage that all types of Cloud Computing offer is that, by its nature, Cloud Computing removes single points of failure. 

The failure of one node of the system has no impact on information availability and does not result in perceivable down-time.

Activity Monitoring – Cloud Computing enables organisations to quickly scale their operations. Provisioning of new resources and software applications can be delivered at a pace that does not hold back the rest of the business.

Efficiency Tractability – Cloud Computing allows businesses to expand or contract computing power as required allowing ‘bursts’ of IT power to be utilised on an on-demand basis.

Outsourcing Secondary Activities – Cloud Computing makes outsourcing of secondary, non-core, activities relatively simple and easy to monitor. 

For many basic business applications outsourcing becomes a simple process, with payment only being made for the computing power or data storage that is used, with no hidden extras and management fees.

Security Issues with the Cloud

However, organisations often engage with the Cloud without taking sufficient management understanding and security precautions. 

Perhaps the biggest concerns about Cloud Computing are still the security and privacy issues. The idea of handing over important data to another company rightly concerns some managers. 

Therefore, corporate executives are often hesitant to take advantage of a Cloud Computing System because they feel unsure of their company's information security.

Some of the security questions regarding Cloud Computing are more philosophical. 

• Does the user or company subscribing to the Cloud Computing service own the data? 
• Does the Cloud Computing system, which provides the actual storage space, own it? 
• Is it possible for a Cloud Computing company to deny a client access to that client's data? 

Many companies, law firms and universities are debating these questions about the nature of Cloud Computing.

There's a growing concern in the IT industry about how Cloud Computing could impact the business of computer maintenance and repair. If companies switch to using streamlined computer systems, they'll have fewer IT needs but less understanding of the results. 

Some other industry experts believe that the need for IT jobs will migrate to the back end of the Cloud Computing System.

The pressure on the IT Directors, and CIO, not only to deliver a successful migration, but also to accurately predict the financial benefits of the move, is enormous. 

Rather than focusing on a simplistic cost comparison between two completely incomparable models, IT managers will be helped to build a more compelling case for Cloud. 

So let us now go into more depth about the Cloud…

Relevant Analysis of Cloud Computing

A recent study by us at Cyber Security Intelligence (CSI), shows that over 74% of the organisations consider Cloud Computing a realistic technological option.

And 64% consider that it will increase their business response to market conditions. 

Also 73% believe that it will open increasing business flexibility by allowing more of their in-house IT department time to analysis important aspects of their commercial market spaces and competition. 

And 68% of management believe that this would lead to increasing focus on the main commercial aspects of business for their own business. 

At present there are few organisations that use Cloud Computing in a really commercially strategic way. This is mainly due to a lack of proper understanding of the businesses IT architecture. 

There is also a misunderstanding of the payment models and the specific elements of the Cloud that can assist the organisation’s development and this allow organisations to release IT employees to develop and analyse improvements in the company’s electronic and commercial development. 

Initially, cloud-based solutions have been designed for small and medium-sized organisations, as a means to ensure increased agility at low cost. 

Recently, an increasing number of large organisations are analysing the possibility of rapid integration of new solutions and the use of Cloud Computing, but it still remains as a project that requires deeper strategic and tactical analysis by most organisations. 

Types of Cloud Computing

Whether private or public, Cloud Computing networks have the following 3 core elements:

1. Infrastructure as a Service (IaaS) – Traditionally in the business environment a user’s day-to-day computing resources are held in one server at one location. The infrastructure is fixed. 

With Cloud Computing, the infrastructure is provided to the user in an ‘on-demand manner’, hence the term Infrastructure as a Service (IaaS).

2. Platform as a Service – This component really builds on the previous one but with an additional layer of capability that allows organisations to develop, build, and deploy their own applications to support their own specific business needs.

3. Software as a Service – Software as a Service (SaaS) is where a user no longer owns the software that is utilised but instead uses it when required via Cloud Computing. 

The software remains the property of the service provider and the user pays for access either by annual subscription or on a pay-per-usage basis. In this way business applications are no longer a capital expenditure item but instead are an operational expenditure cost.

Challenges to overcome

With any new technology it is important to consider the additional risks that it may bring as well as the benefits. Where Cloud Computing is concerned these fall in the following key areas:

Security – Whether organisational data sits in a Cloud or in a traditional perimeter system, data will still be vulnerable to hacking and other intrusive attacks.

Internet resilience and bandwidth – The public Cloud is delivered via the Internet’s network and therefore is vulnerable should for instance Internet connection go down and become unavailable.

Compliance – Many countries’ data protection laws restrict the way in which data can be stored and mandate the way in which it must be protected. 

Cloud Computing usage – Especially where it uses the public Cloud, may place the organisation in non-compliance with data protection laws. 

Cloud Computing Implementation

It is, therefore, important that these next 5 points are considered both prior to and during Cloud Computing implementation.

1.    Fully Utilised Hardware

Cloud Computing brings natural economies of scale. The practicalities of Cloud Computing mean high utilisation and smoothing of the inevitable peaks and troughs in workloads. 

Your workloads will share server infrastructure with other organisations' computing needs. This allows the Cloud-Computing provider to optimise the hardware needs of its data centers, which means lower costs for you.

2.    Lower Power Costs

Cloud Computing uses less electricity. Better hardware utilisation means more efficient power use. When you run your own data center, your servers won't be fully-utilised. Idle servers waste energy. So a Cloud service provider can charge you less for energy used than you're spending in your own data center.

3.    Lower People Costs

Whenever CSI has analysed an organisations' computing costs, the IT staffing budget is often the biggest single line item; it often makes up 54% of the total. 

Excellent IT people are expensive; their salaries, benefits, and other employment costs usually outweigh the costs of hardware and software. And that's even before you add in the cost of recruiting good staff with the right experience.

When you move to the Cloud, some of the money you pay for the service goes to the provider's staffing costs. But it's typically a much smaller amount than if you did all that work in-house. 

Many organisations that move to Cloud Computing find they can redeploy their scarce, valuable IT people resources to areas that make more money for the business.

4.    Zero Capital Costs

When you run your own servers, you're looking at up-front capital costs. But in the world of cloud-computing, financing that capital investment is someone else's problem.

If you control and run the servers yourself, the accounting costs get spread over a server's life. However the capital has to be found and so it is this capital that then cannot be invested in other parts of the business.

5.    Resilience Without Redundancy

When you run your own servers, you need to buy more hardware than you currently require in case of systems failure. In some cases, we have come across, organisations have duplicate all their systems. Having backup hardware lying idle, is a very expensive way to maximise uptime.

With Cloud systems they typically have several locations for their Data Centres – this needs to be checked before making a decision on which Cloud you choose. However, this is a more economic method than controlling all systems yourself.   

Bonus benefit: Climate Change

Whether or not they believe in global warming, many organisations want to do something about it. This is either because their customers want to do business with green companies, or simply through a genuine desire to emit less CO2, or other gases believed to warm the planet. 

In the Cloud your Business will be Greener

First, you'll be saving energy, and saving your electronic costs.

Second, you'll be taking advantage of the work that your Cloud service provider has done to reduce its data centers’ carbon footprint. Think of it as saving money that you might otherwise spend on carbon offsets.

It’s Reality

Cloud Computing is now a proven, mainstream alternative for internal software sharing applications. Moving to the cloud will save you money, not just for your cloud security needs, but for many other types of data center workloads.

Companies can also scale up as computing needs increase and scale down again as demands decrease. This eliminates the need for massive investments in local infrastructure which may or may not remain active.

Conclusions

CSI believe that there are significant economic benefits to be gained from moving to Cloud Computing. 

These benefits accrue to a business in two distinct ways directly through reduced costs and indirectly by allowing for increased focus on core, and new commercial analytic research, business functions. 

Most businesses should, use a cloud service for storage purposes but this should also release money and IT employees time to analyse your business opportunities more effectively. 

There are also those businesses that take this one step further and use cloud computing for collaboration purposes. They get work traditionally done inside the business but gain insight and   these two primary functions can save your business a lot of money.

In terms of storage, the Cloud takes over your storage needs to ensure that you get quality data storage at a fraction of the required cost. If you were to do it yourself, you would have to spend a lot of money on IT infrastructure including hardware and software. This is on top of the fact that you would have to pay IT professional staff to manage your data.

Those who use the Cloud for collaborative purposes, also experience some cost saving benefits. The Cloud is one of the most important collaborative tools you can use. It allows people who could be in different corners of the world to work on the same project.

To a business, this means you get to hire the best people for the job regardless of geography. The best people for the job are productive and productivity equals lower costs and higher profits.

Resiliency and Flexibility without Redundancy

One of the most impressive characteristics of the Cloud is its flexibility, scalability and resiliency. These three would be almost impossible to achieve on an in-house data solution. 

These three characteristics also make the Cloud very cost effective for any business.

When using an in-house solution, you would need to buy more hardware every time your data needs increase. The Cloud has a less expensive solution to this problem. It is known as scalability where the Cloud provider increases or reduces your Cloud needs to correspond with your needs. In this way, if your data needs change, the Cloud adjusts to give you just the amount of space you need.

Cloud providers will even allow you to pay as you go. This means you only pay for what you need and nothing more. 

With in-house data solutions, there is the tendency to have more space than you need. This is costly to your business since you are paying for the maintenance and management of hardware and software that you don’t really need.

All of these benefits make the decision to move to the Cloud easier for most organisations. 

All businesses need to reduce costs and make bigger profits, so the Cloud can clearly help but commercial and particular organisational requirements need to be analysed. 

For further information or Cloud assistance please contact Cyber Security Intelligence:info@cybersecurityintelligence.com    

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References:

Broadcast:       Webroot:        ESDS:        PCMag: 

Oxen:    Logicworks:     SearchCloudComputing:

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