Impacts of cloud computing in small and larger

enterprises.

Deekshant Jeerakun

Student Number: 120460

Supervisor: Shireen Panchoo

Submitted as part of the requirements for the award of the

MSc in Enterprise Security and Digital Forensics at

The University of Technology, Mauritius

I declare that this assignment is all my own work and that I have

acknowledged all quotations from

the published or unpublished works of other people. I declare that I have

also read the statements on

plagiarism in of the Regulations Governing Examination and

Assessment Offences and in

accordance with it I submit this project report as my own work.

Signature Date

Acknowledgements

I would like to express my deep gratitude to Dr Shireen Panchoo my research

supervisor, for her patient guidance, enthusiastic encouragement and useful

critiques of this research work. I would also like to thank Mr Nawab Mouniarach

for his advice and assistance on Cloud Computing. A special thanks to my Parents

Mr Mudhoo and Mrs Oomawatee Jeerakun who have always been pushing me so

that I can study further and achieve. Sumaiya Chundoo ( Contract Administrator

Coolkote ; Harel Mallac) to be understanding and stand by me. My brother Akilesh

Jeerakun ( Operation Manager Harel Mallac ) who help me in checking my work.

Miss Aneesha Bissessur ( Auditor at EY)for being a good friend and understanding

and help to boost my moral. Mr Ramraj Bissessur (Executive at Micros Fidelio)

who gave me more aspects of cloud in businesses. Finally, I wish to thank

everyone and my class mates who were very supportive and help each other in

downtime period.

Abstract

This dissertation analyses the kind of impacts cloud computing can have on different

classifications of businesses, focused more on small and large businesses. Cloud computing is an

emerging technology, which is not yet fully accepted by businesses. It is discussed what aspects

of this technology can have positive impacts and which aspects can have a negative impacts on

businesses. Research is done with the help of systematic literature reviews, case studies and

surveys. All positive and negative impacts are analysed and discussed in detail. It is also

discussed after investigation results, why cloud computing technology evolved, what kind of

issues it aims to cater, and what the expectations of business owners are. It is concluded that

cloud computing can offer more benefits to small businesses than it can to large enterprises,

which is why small businesses are more likely to shift compared to large enterprises. It is further

discussed why large enterprises would not be willing to shift, and what can be done to eliminate

their fears about cloud computing.

Contents 1. Introduction ......................................................................................................................................... 5

Problem Definition .................................................................................................................................. 5

Introduction to Project ........................................................................................................................... 7

Aims and Objectives ............................................................................................................................. 10

2.Project Management Methodology : What Plan did I develop ? ....................................................... 11

3.Systematic Literature Review ............................................................................................................... 12

4.Defining cloud computing ..................................................................................................................... 14

a. What is cloud computing? ............................................................................................................ 14

b. History of cloud computing .......................................................................................................... 17

c. Comparison with other related technologies .............................................................................. 18

d. Difference between different cloud deployment ......................................................................... 22

e. What services can a cloud provide in an enterprise ................................................................... 23

5. What solution can cloud computing aim to provide? Why has this technology evolved ................ 25

a. Why cloud computing now ? ........................................................................................................ 25

b. What is the main reason for cloud adoption in business. .......................................................... 28

c. What kind of business value can IT Provide; how does cloud computing offer this value? .. 29

d. Is cloud computing more suitable for small or large businesses? ............................................. 31

6. Literature Review results of the positive and negative effects of cloud co,putting and the

Important aspects business owners need to keep in mind before making decision ............................ 35

a. Positive impacts of Cloud Computing into businesses. .............................................................. 36

i. Economic Benefit ...................................................................................................................... 36

ii.Managerial and Environmental Benefit ...................................................................................... 38

b.Negative Impacts of Cloud Computing into Businesses ................................................................. 41

i. Dependency issues ..................................................................................................................... 41

ii. Security, Privacy and Legal Issues .......................................................................................... 43

7.Surveys ( Interview /Questionnaires Base) and Case Studies ............................................................ 45

a. Views and Experiences of Companies (Businesses) who aim to adopt / have already adopted

cloud computing ........................................................................................................................................ 45

b. Survey............................................................................................................................................. 52

8. Conclusion ............................................................................................................................................. 65

9. Project Management: How it proceeded............................................................................................. 66

10.Further Research ................................................................................................................................. 67

11.References ............................................................................................................................................. 69

12. Appendices ........................................................................................................................................... 76

Appendix 1: Timeline ........................................................................................................................... 76

Appendix 2 : Questionnaire ................................................................................................................. 77

Survey Questionnaire .................................................................................................................................. 78

Appendix 3 : Company contactsAppendix 3: Company contacts ........................................................ 83

1.Introduction

Business Question

To what extents will the adoption of cloud computing offer benefits and to what extents will it

introduce risks to different kinds of businesses?

Problem Definition

Enterprises today are required to build and maintain an IT department as part of their business

activities, no matter what the core business objective is. Any business, for example,

telecommunication industry, food business, financial, education industry, entertainment business

and numerous other categories require an IT department. There could be various objectives of

having an IT department in businesses, for example, maintaining databases for the purpose of

preserving organizational history and records, developing solutions for providing efficient

computations, speeding up organizational processes, developing websites for promotional

purposes, and many more.

IT can become a big nuisance at times for businesses not having IT as their core competency or

business objective. Additional budgets, resources and staff members are required in order to cope

up with an in house IT Dept. In order to avoid this problem, the concept of outsourcing evolved.

This concept enables business owners to outsource the development of IT solutions required by

their business, and purchase completely developed solutions without going through the hassle of

development. This concept did release business owners some effort, but there are still many IT

operations that need to be operated in house in order to use computing facilities, for example,

software licensing, operational challenges etc.

Cloud computing evolved as a solution to this problem for business owners. It provides a facility

to outsource the entire IT department and purchase complete computing services from an

external source. This technology has its own benefits and drawbacks as well. It is a technology

that is not widely accepted at the moment. Therefore, my research work is aimed at finding out

the kind of positive and negative impacts that cloud computing can have on enterprises.

Introduction to Project

This report contains results of my research about the kind of impacts and security issues cloud

computing can have on small and large businesses.

Cloud Computing is an evolving IT technology, which is said to be ‘key to the future of IT’ (Tim

Anderson, guardian.co.uk, 2010) [2]. It is a concept that encloses multiple computing features.

The basic concept is to provide computing facilities like, platform, applications, memory, data

storage or infrastructure over the internet. As such that, there will be no need of software

installations, memory or software upgrades on local machines. All such upgrading can be done

on a single server which will be accessible by multiple clients, even from different locations. It

make the client to be able to get access to his data and all applications from any part of the world

using Internet.

There are numerous companies offering cloud services in the market currently, out of which

some names are very known and established one’s, for example, IBM, Google, Microsoft, etc.,

and there are even more businesses who are using cloud services. But, cloud computing

technology has still not become accepted enough, as it should be due to certain security issues

and privacy of data. A big portion of the target market of cloud computing is businesses, others

being individual users. Businesses, of almost every kind, having an IT department can get

affected from cloud computing technology. There are many doubts that business owners have in

mind about embracing this new technology, which are not yet cleared, which is why it has not

yet reached its peak of acceptance in the market.

My research work is about finding out the kind advantages and disadvantages cloud computing

can provide in a business and also the security ‘fears’ that the business owners have. I have

researched about what categories of businesses can get positively affected and which can be

negatively affected. The method of research that I have followed is mainly literature review

along with surveys and case studies. With the help of different sorts of literature available about

cloud computing, I learned about the concepts of this technology, the reasons why it has evolved,

what sorts of issues does it aims to solve and its pros and cons.

The first part of my literature review was to acquire a complete desired knowledge about this

technology. The questions that I aimed to answer by the end of this section of my research were:

What is cloud computing? What are the different categories of this technology that can be

tailored according to different kinds of businesses? How is it different from existing

technologies? What are the security issues?

After gaining complete required knowledge of this technology, as the second section of my

literature review, I aimed to answer questions like: Why has cloud computing come in the

picture? What was the need for developing this technology? What problems has it aimed to

solve?

By reviewing literature for this section of my research, I understood the reason why cloud

computing has evolved in the market now, and what solutions does it aims to provide.

Finally, my literature review topic was to figure out the pros and cons of cloud computing in

businesses.

Businesses can be categorised in many different classifications, for example, IT, non IT, small,

medium sized, large, virtual, non-virtual, and many more. Due to limited time and resources, I

kept my research focused towards small and large businesses only. I chose to research about the

impact of this technology on small and large businesses because, all businesses, despite their

nature of core business objective, can be broadly categorized as small or large.

After completing my literature review, I chose the method of Case studies, Surveys and

Questionnaires for my research for getting further results. I believe that knowledge achieved by

doing literature review has the possibility of being too theoretical. Therefore, in order to get

practical and real market answers for my research question, I chose to study real case studies,

stating personal experiences about cloud computing. The results I achieved from performing

case study analysis, seemed to be biased towards the favour of cloud computing, as mostly were

provided by businesses offering cloud services. Therefore, I conducted my own survey from

different business owners. My survey was aimed to gather their views about embracing this new

technology in their business by using the help of questionnaires in order to complete my survey.

Finally my report states the conclusion of my research, answering the main business question:

To what extents will the adoption of cloud computing offer benefits and to what extents will

it introduce risks to different kinds of businesses?

Aims and Objectives

The objectives of my research are as follows:

The first part of my research is focused about finding out the kind of services cloud computing

can provide to businesses. To what level can cloud services be tailored in order to fit specific

businesses?

The second part of my research focuses on the advent of cloud computing. Why has cloud

computing evolved now? What are the aims of this technology? What kind of problems does it

aim to cater? How is it different from existing technologies?

The third part of my research focuses on the advantages and disadvantages of cloud computing.

What aspects of cloud computing can impact businesses positively and what aspects can affect

businesses negatively? I also focus on the aspects of this technology which can affect different

businesses in a different way.

2.Project Management Methodology :

What Plan did I develop ?

Before starting to research about my business question, I developed a timeline for my project and

divided tasks into sub categories and assigned deadlines for their completion. I sub divided my

research question into sub sections, and developed a breakdown of questions that I need to

research about in order to achieve a conclusion to my main business question. The breakdown of

my research work that I developed is reflected in the contents page, which provides a

summarized form of what I have produced. The detailed plan that I developed can be seen in

Appendix 1.

Breaking down my research question helped me a lot in developing a project management plan

for my work keeping in view the provided time. Initially I assigned 2 weeks for each section of

my report (referred to the table of contents and Appendix 1), but the plan had to be revised

multiple times once I started off.

The reason for revising my project management plan was the pace of work, which became

quicker as I went further with my project. When I begin with my research, I had less knowledge

about the terminologies used in the context of cloud computing (e.g. Cloud deployment types,

Kinds of cloud services, etc.). I had to learn about each one of them as I progressed. Therefore, it

took me more time in order to complete my initial chapter of the report. But, as I progressed

further, it was easier for me to understand literature published about cloud computing, as I was

now more familiar with all the terminologies and concepts related to cloud computing.

I had in my initial plan to conduct surveys from different companies and use the results in stating

my conclusion. In order to achieve this, I planned and developed contact with business owners

well in time, so that while the time I get feedback on my survey questions, I can simultaneously

work on conducting literature review for some of my research questions.

3.Systematic Literature Review

The dissertation that I am presenting is purely research based. To begin with my research, I read

literature from different sources ( Research papers, journals, Forums)to understand the methods

of research, and in what way could I perform them. Out of the many forms of research identified,

literature review is the most thorough and accurate one. Therefore, in order to understand what a

systematic literature review is and how it is conducted, I read a couple of research papers written

on how to conduct systematic literature review [75] [76]. I followed approach defined by the

author Barbara Kitchenham in the research paper titled ‘Procedures for Performing Systematic

Reviews’ [76] in order to conduct my research.

Barbara Kitchenham defines stages in order to conduct systematic literature reviews. The paper

states that a literature review is supposed to have 3 stages, which are Planning, Conducting and

Reporting. Each stage is described in further detail in the paper, which is followed in this

dissertation. Before beginning with the actual research work, as defined by the guidelines

provided, the purpose of the research should be identified. The research paper identifies 3 main

reasons for conducting literature reviews. As my research is separated in stages, all 3 reasons

specified are catered as different stages of my research.

As the first stage of my research, I defined the research question that needs to be answered. The

research question specified was, ‘To what extents will the adoption of cloud computing offer

benefits and to what extents will it introduce risks to different kinds of businesses?’ In order to

answer this question, I divided my research work into stages. The purpose of the first stage was

to gather all relevant information about the topic in order to position my research question or

build the scene for answering my question. This stage is reported as the fourth chapter of this

dissertation, which reports all information gathered about the topic ‘Cloud Computing’, along

with all its attributed and related information that will be necessary, for e.g. Deployment types

and services it can offer.

The purpose of the second stage of my research was to identify the need for answering my

business question. It was aimed at researching about the main reason why cloud computing

evolved, and how it is different from what already exists. This part of my research identified the

need for conducting further research over the topic. This stage is reported as the fifth chapter of

my report.

The third part of my research was aimed to identify, analyse and interpret accordingly, all

relevant literature available for answering the actual business question. This part answered

questions like the advantages and disadvantages cloud computing can provide in businesses. In

order to further support this stage of my research, I conducted surveys as well. This stage is

reported as the sixth and seventh chapter of my report.

I order to conduct the systematic literature review; I decided a search strategy so that my

research does not stay biased over the advantages of cloud computing, as positive aspects are

published more than negative aspects usually. Majority of search done is through online

resources. Search terms were specified, by breaking down the main research question into

smaller stages, and synonyms were used to gather more results. In order to get to more search

results, I used terms defined by literature that I went through to search. The search terms are

stated occasionally in the report wherever felt necessary. I selected the literature on the basis of

their sources. I went through blogs provided by different IT consulting companies and literature

provided by cloud service providers as well, but relied more on literature provided in research

papers published by universities or organizations which are not affected by cloud computing in

any way. Another criterion that I used for choosing literature was the publishing date. In my

dissertation, majority of the literature referenced was published a maximum of 5 years earlier

from date. I analysed contradicting data provided by different resources by further review of the

topic or by the reliability of the source providing data. Data extraction was done through

personal notes made frequently, which were joined later on while reporting.

4.Defining cloud computing

To begin with answering my business question; ‘To what extents will the adoption of cloud

computing offer benefits and to what extents will it introduce risks to different kinds of

businesses?’, it is important to understand the basic concepts of cloud computing. To discuss

these basic concepts, I have begun my report by stating the conclusions of my research about the

concept of cloud computing. What is it? Where did it begin from? What constitutes the

technology? What are its characteristics?

I begin with discussing what is the concept behind cloud computing? I researched about

explanations stated by different authors (university publications, books on cloud computing and

research papers about different aspects of clouds). I found a variation of definitions, which was

because, every paper had a different business question to answer and the concept of cloud

computing was defined in every paper accordingly, focusing on the aspects the author felt

important to support the corresponding business question.

I went through a variety of literature, and have concluded a complete explanation of the

fundamental concepts of cloud computing.

a. What is cloud computing?

Any company in the business world today is bound to have an IT department in order to cope

up with the market. Beside from all the benefits, it gets costly and exhausting for any company to

manage its IT department along with the company’s main objectives. This is because, IT is not

their priority and the IT department’s require a team of skilled professionals, hardware

infrastructure and software licenses. All this adds up to become a huge part of the organization’s

budget which often is neglected in cases where it is not a priority.

In order to eliminate all such problems and yet get benefited by IT solutions, the cloud

computing technology was introduced. It is a technology that provides a platform for services,

infrastructure and storage services to be provided over a network (internet) [1]. It is referred to as

‘cloud computing’, because it provides all computational services over the internet, and the term

‘cloud’ has been used as a metaphor for the internet since many years.

Cloud Computing is an evolving IT technology, as defined in an article by Tim Anderson (2010)

[2], ‘Cloud computing is the key to the future of IT’. It is a concept that umbrellas multiple

computing features. The basic concept is to provide computing facilities like, applications,

memory, working platforms or infrastructure over the internet [1]. Such that, there should be no

need of software installations, memory or software upgrades on local machines. All such

upgrading can be done on a single server which will be accessible by multiple clients. It will

make the use of computers much easier.

With the adoption of cloud computing, individual software license purchases will not be required

for every individual machine. Hardware infrastructure, and IT teams or departments in every

individual company will not be required. All these services will be provided over the internet on

demand, according to current requirement of the company [3].

This shall enable the IT departments in organizations to focus more on developing new and more

effective and efficient solutions rather than spending time on managing servers and infrastructure

of the company.

Cloud Computing can help organizations reduce or sometimes completely eliminate their IT

operations, like hardware/software licensing, solutions development, data maintenance and

upgrading challenges [4]. This technology can be understood as a mature form of several

existing technologies like, client-server models, grid computing and utility computing [4].

Services provided over the cloud are supported by hosting providers. In order to access services,

clients are required to register with a cloud service provider. These services are provided over

standard internet protocols like ‘http’ and ‘xml’.

Entire software and hardware management is done by the hosting provider, and the client does

not need to know about any regarding information. The client can use software applications,

hardware requirements (e.g. CPU performance speed), or memory according to its requirement.

Main characteristics of cloud computing technology as defined by David Linthicum (2009) [5]

are as follows:

On demand self-service:

Any individual or organization can access and use services provided by the cloud without having

big computer and server architecture.

Ubiquitous network access:

Everything over the cloud will be machine and operating system independent and will be

accessible almost everywhere, in terms of geographical location.

Location independent resource pooling:

The client does not need to have information about the physical location of the services being

used. The provider is responsible for serving the clients through a multi-tenant model. It does not

matter for the client which locations are the services located.

Rapid elasticity:

Clients can alter the amount of services at will at any time. Services used can be reduced or

increased according to the usage.

Pay per use:

Clients are charged for only the services that they use. Increasing or decreasing services on

demand will alter the amount of charges as well.

In order to implement clouds, there are various deployment-architectures defined. Clouds can be

used for multiple purposes; therefore, different architectures for implementation are defined [5]:

Private clouds

Private clouds

Public clouds

Community clouds

Hybrid clouds

Mainly, the deployment-architectures are defined into two major categories for enterprises.

Firstly, clouds that operate within a company’s network, and secondly, clouds that operate

outside a single company’s network. These architectures are defined in detail further in the report

in order to understand the kinds of clouds enterprises can implement according to their

requirements.

b. History of cloud computing

With the increasing market demand for changes, organizations are required to constantly

introduce innovations in their businesses in order to cope up with the market and maintain a

competitive advantage against their competitors.

When a company or enterprise plans to enhance its operations, or introduce new services or

products, changes in every department are required to be made. By changes, I mean increasing

human resource, developing new plans, managing time, adapting new technology/process and a

lot more. Out of all the changes required to be done, the maximum time is required by the IT

department in most cases as defined by David Linthicum (2009) [7].

The IT department requires the maximum time because; new solutions need to be developed

through the process of planning, designing, coding and testing, new solution’s integration with

the old system is required and hardware and software upgrading is required. Developing new

solutions and integrating with old one’s takes most of the time in majority cases. Because of this,

IT departments have become the most evident point of latency when an organization requires

advancement [7].

To solve such problems, the concept of introducing IT resources as services came into being. By

using IT resources as services, organizations are not be bound to rely completely on their IT

departments for providing services. Another benefit of this concept is that data and computing

facilities are hosted by a single source and can be accessed by multiple clients.

This concept was developed long before, and has been implemented in businesses in different

forms. According to a report on ‘The Future of Cloud Computing’ by Lutz Schubert [3], the

concept of cloud computing dates back to the 90’s in the form of telecom clouds. In the telecom

infrastructure, the user was kept unaware of the channels transferring its data. Cloud computing

is said to be an emerging field and according to a study [26] which states that, the market for

cloud computing was $16 billion in 2008, and will increase to $42 billion per annum by 2012.

Another concept from the 90’s, which is said to be the basis of cloud computing architecture, is

the client-server model [8]. This model introduced the concept of storing files on a single server

and giving its access to multiple clients at the same time over a network.

More existing technologies with a similar concept as cloud computing as concluded by my

research are [10]:

Autonomic computing

Client server model

Grid computing

Utility computing

Peer to peer

All these concepts are discussed in detail further in the report, so that an understanding of cloud

computing technology can be developed, based on what existing technologies it comprises of.

c. Comparison with other related technologies

As stated above, there are a few existing technologies that have a similar concept to cloud

computing. Rather it would be better to say that cloud computing is a superset and a mature form

of these existing technologies [11]. It incorporates all these existing technologies, but, has a

wider vision. Explanations of these technologies are stated below in order to understand what

technical components do cloud computing comprises.

I did research about the existing technologies that cloud computing comprises of to understand

its technological aspects. It helped me understand what components of cloud computing have

already been implemented and tested practically, and also the advantages and disadvantages of

them. Studying about cloud computing related technologies also helped me understand, how

cloud computing is different from what has already been developed.

i. Autonomic computing

Autonomic computing is a computing model which manages its operations itself through the

concepts of Artificial intelligence. Its main goal is to create systems that are self-operated. This

concept was started by IBM in 2001 [12]. According to a definition on ‘Autonomic Computing’

[13], IBM set 8 conditions for a system to be autonomic which are:

An autonomic system should recognize changes in the computing environment it operates in and

configure itself automatically

An autonomic system should alter its performance in order to achieve maximum efficiency

automatically

An autonomic system should fix its own problems

An autonomic system should detect, analyse and remove any risks automatically and maintain

system security

An autonomic system should adapt itself accordingly to its locality

An autonomic system should automatically form communication with its neighbouring machines

An autonomic system should rely on open standards

An autonomic system should keep its operations invisible from the users

Concepts of autonomic computing form a part of cloud computing, but, as discussed earlier,

cloud computing is more ambitious. The major similarity between the two technologies is that

back end processes are kept hidden from the end user. The end user is kept unaware of the

processes being used by its machine and their source [14].

ii. Client-server model

A client-server model is a computing model based on more than one machine, often used by

organizations and not for personal use. One workstation acts as the server and the rest

workstations in the workplace are referred as clients. The server hosts different services like, disk

drives, printers or network traffic as a single source, while the clients access these services

through the server. Each computer in this model is either a client or a server [15].

File storage is done on the server computer, and the clients request communication with the

client in order to access files. Processing power is also provided by the server in some cases. All

workstations within a workplace communicate over a local network [15].

The concept of cloud computing and the client server model is very similar to each other. The

differences are that a client server model is a locally operated model while the concept of cloud

computing is to provide services globally to a wider variety of clients. Secondly, client server

models offer CPU performance, networking facilities and file storage as services, while cloud

computing offers much more services than that, which are explained in more detail further in the

report.

iii. Grid computing

Grid computing is a concept which was introduced in the early 1990’s. The concept of grid

computing is to coordinate multiple computers together, such that they all work for a single task

at the same time. It incorporates the computational power of multiple machines in order to

achieve a single goal. Grid computing architectures are normally used for huge projects which

require huge computational power or involve huge amounts of data [16].

By dividing a single task between multiple computers, the strength of many computers is added

up for achieving a single task, thus huge tasks and computations can be performed easily. Grid

computing is constructed on middleware (software to connect different applications). The

computers connected through a grid are usually placed on scattered geographical locations.

Cloud computing and grid computing are both technologies used to increase utilization of the

available IT resources. The difference between them is that in grid computing, a system

distributes tasks to different computers and those computers return the tasks after computation

back to the system. While In cloud computing, a system accesses services through a network in

order to complete its tasks [17].

iv. Utility Computing

Utility computing is a service providing model, which has a very similar concept to cloud

computing. There is a single service provider, which provides computing services to clients as

needed and the clients pay according to the amount they have used. The term ‘pay-per-use’ is

also used to explain utility computing, which means that the user only pays for the amount of

resources used rather than paying a fixed amount [18].

Cloud computing is different from utility computing because, in case of utility computing the

user is aware of the source of the services it is using. While, in cloud computing, there are

multiple sources for services and the user is unaware of the source.

Other than this, utility computing provides direct access to the services because of less complex

architectures. While, in case of cloud computing, the services are provided much indirectly as

they have more complex architectures and do not rely on a single source.

Rather than stating both as two different technologies, it would be better to say that they both

work in collaboration. Utility computing is a necessity in order to build a reliable cloud [18].

v. Peer to peer

Peer to peer (P2P) architecture is much similar to the client server model described above. In

client server models, some machines are dedicated as servers while some as clients. While, in

P2P architecture, all computers connected to the local network act as both, clients and servers.

All machines can provide and access facilities from different computers on the same network.

The differences between P2P and cloud computing are the same as the differences between

client-server model and cloud computing.

d. Difference between different cloud deployment

In order to implement clouds, various deployment models or patterns of implementation and

usage are defined. There are two primary classifications of deployment models, which are public

and private. While, the rest deployment models mix and match their characteristics. According to

a definition by Dustin Amrhein (2011) [19], deployment models are ‘concepts for the

encapsulation of installations, configuration and integration activities’. All models fulfil the

basic characteristics of cloud computing, which are, round the clock availability,

elasticity/scalability and service oriented architecture. Whereas, these models differ from each

other in terms of their varying scope and access of services to clients [20].

i. Public Cloud

‘Public cloud’ is the model which encapsulates all features of cloud computing, thus, is said to be

the mainstream of cloud computing. In public cloud deployment models, services are made

available for public, which means that they are accessible by the general public. Services are

provided over normal internet, thus, are available outside the domain of the service provider.

ii. Private cloud

A ‘Private cloud’ model is created for and operated by a single organization. All services

provided in a private cloud are on a private network for a single organization and cannot be

accessed outside of this domain. Usually organizations are required to build and manage their

own clouds. The purpose of private cloud model is to maintain a company’s privacy, security

and authority over its data and operations.

iii. Hybrid cloud

‘Hybrid cloud’ model is the combination of public and private clouds. It is used by organizations

which require accessing some services through a public cloud while some over a private cloud.

Its infrastructure is a combination of multiple clouds (public and private) bound to function

together.

iv. Community cloud

A ‘Community cloud’ model is similar to ‘Private cloud’ model, but more enhanced in terms of

access of services. Services provided over this model are accessible by multiple organizations of

the same nature, but not to the general public. Multiple organizations which require the same

kind of services share a common cloud, while, the privacy and security of organizations is still

maintained.

Different deployment models are suitable for different kinds of enterprises according to their

requirements. Some organizations may find private clouds more suitable according to their

requirements while for some, public clouds might be the answer [20].

Reading about different cloud deployment types helped me understand, what are the different

models of deployment that cloud computing can offer, which can be tailored to some extent

according to the requirements of the client. I understood that because cloud computing offers

different deployment models; it can be useful for different kinds of businesses, as it is not

designed for a single purpose.

e. What services can a cloud provide in an enterprise

Cloud computing models have numerous components which work together in a collaborative

manner to provide multiple kinds of services. In order to understand all the services a cloud

provides, 11 classifications of services are defined by David Linthicum (Sep 2009) [5]. These

services are discussed below along with the benefit they can provide in an organization:

v. Storage as a service: Storage space or disks storing data are located at a separate

physical location, but are dedicated for the use of a specific customer.

vi. Database as a service: All services provided by a database are hosted remotely.

vii. Information as a service: Interfaces providing access to information stored at a

different location are provided.

viii. Process as a service: A service which facilitates customers using resources from

different sources, to integrate the resources and operate as if they were located together.

ix. Application as a service (Software as a Service): Software applications or IT

solutions are provided over the internet.

x. Platform as a service: A platform for application/software development is provided

over the internet.

xi. Integration as a service: It provides the facility to integrate applications used

through clouds.

xii. Security as a service: Security services for internal systems are provided over the

internet.

xiii. Management/Governance as a service: It provides customers the ability to operate

services accessed through multiple clouds.

xiv. Testing as a service: It provides customers the ability to test cloud systems and

services provided over the clouds.

xv. Infrastructure as a service: it provides a service to systems so that they become able

to access services operated remotely.

5. What solution can cloud computing aim

to provide? Why has this technology

evolved

In this chapter of my report, I discuss the advent of cloud computing, why did the idea bloom

now? Why are businesses adopting it? What business value are businesses looking for? And

what are the challenges that small/medium sized businesses and large enterprises face in order to

adopt cloud computing?

To answer my business question ‘To what extents will the adoption of cloud computing offer

benefits and to what extents will it introduce risks to different kinds of businesses?’, I need to

understand the main reason why businesses want to adopt clouds. By this portion of my research

I aim to understand what business owners think they might achieve by the adoption of cloud

computing. Further in my report, I will discuss whether these expectations of business owners

are achieved or not.

a. Why cloud computing now ?

As discussed earlier in the report, cloud computing offers a great deal of benefits to enterprises.

It helps them reduce costs and avail IT services without any hassle of managing IT departments

and huge infrastructures. The ‘pay-per-use’ characteristic of cloud computing makes an

enterprise save the cost of spending on maintaining heavy software and hardware infrastructure

for their peak usage times [3]. According to a few researches and predictions with the help of

surveys, cloud computing is said to evolve greatly in the coming years. According to an analysis

about cloud computing by the European Network and Information Security Agency; ‘the

worldwide forecast for cloud services in 2009 was in the order of $17.4 billion, while the

estimation for 2013 amounts to $44.2 billion’ [53].

But, the question is that if cloud computing is a combination of existing technologies

(Autonomic computing, Client-server model, Grid computing, Utility computing and Peer-to-

peer) [11], which have been implemented and tested in enterprises before, then why has the

concept of cloud computing emerged now? Why wasn’t it introduced earlier? [22]

Factors for the emerging of cloud computing are discussed below:

Every new technology or process that is introduced in this world goes through phases of

evolvement and acceptance. Any new technology evolves from existing concepts, and after a

new technology is introduced, it takes time for people to understand and adapt it. Changes are

made at small level before a technology is accepted for large businesses. Same is the case with

cloud computing. An example by Jim Cooke (2010) explains this process in an interesting way

as:

‘Farming, for example, was once practiced by many independent, self-employed farmers who

worked the land they owned. If they produced an excess, they sold the excess. Over time,

economies of scale enabled by new technologies made the small-farm model less efficient and

productive than large farms, which could produce larger quantities of food less expensively. As

prices dropped, demand grew and so did large-farm productivity, reducing margins further and

making small farms even less viable. Many small farms consolidated into larger farms, and small

farmers went to work for agricultural corporations’ [21]

Other than this, cloud computing implementation is dependent on many other IT

technologies. Without which, cloud computing cannot function at its best. These include storing

huge amounts of data inexpensively, transferring data over long distances without time constraint

and virtualization [21]. These technologies have been matured overtime which is why the

concept of cloud computing was not floated earlier.

Another major reason is the culture of accepting file storage and using other IT services

outside an organization’s firewall. Earlier, organizations did not rely on using services from a

third party which is not a part of the same enterprise. But, as the IT world has evolved, privacy

and security issues have been made more reliable. Thus, using services outside an organization’s

domain has become acceptable.

Another catalyst as discussed by Jim Cooke (2010) [21], is the economic recession. Because

of the economic recession, all enterprises were forced to review their entire business units in

order to cut down any excess cost. This situation turned out to be an opportunity for cloud

computing as it offers services that can reduce costs in an organization.

b. What is the main reason for cloud adoption in business.

As discussed earlier, there are many characteristics of cloud computing, which can benefit

enterprises. But, as every other technology, this has its own drawbacks as well. It provides

different kinds of benefits and risks to different categories of businesses. In this section, the main

reason for the adoption of cloud computing in businesses is discussed, keeping in view its

advantages and disadvantages.

In order to create a good business case for any new technology, its business value is considered.

The major questions to answer are; what value can the new technology provide to the enterprise?

What economic benefit will be achieved? Businesses, after all are all about making wealth.

Therefore, any new technology that can provide an economic benefit to the company is

welcomed with open arms. As stated in an article by Jim Cooke (2010):

‘Technology is not the primary impetus to shift from traditional, data centre based IT…….The

shift is due to the economics of using the cloud versus the physical data centre.’ [21]

Jim Cooke further states that technology has just provided a medium, but providing economic

value is the main reason for adopting clouds in businesses.

This view of thought is backed by David Linthicum (2009), by stating that in order to make a

good business case for cloud computing to be adopted by an enterprise, its cost reduction and

capital saving aspects should be discussed. But, it is not as straight forward as it seems to be.

Cloud computing technology sure does reduce cost in an enterprise but, there are many other

aspects that are normally ignored [23]. Such aspects include the cost of migrating current system

to clouds, cost of integrating current system with clouds, etc. For small and medium sized

businesses, these costs might overtake the amount of profits generated. But, for large enterprises,

the case is opposite.

A different view point is stated by Hamid Motahari et. Al. [24] and Ali Hosseini et. Al [25].

It discusses that the main reason for businesses adopting cloud computing is the outsourcing of

IT [24]. Currently, every company is bound to maintain an IT department in order to maintain its

IT operations. Companies, in this case, are unable to give their full potential towards their core

functionality. This might be affordable for large enterprises, but, is unaffordable for small or

medium sized businesses. Therefore, the outsourcing of IT is one of the main reasons for small

and medium sized businesses to shift to cloud computing [24].

Supporting the above stated reason for cloud computing adoption, electricity can be taken as an

example [25]. Earlier, when electricity was not very common, every enterprise had to maintain

individual grid stations in order to cater their needs. While, when the forms of electricity

production matured, organizations started to purchase electricity on demand from third parties.

This made organizations focus more on their core functionality, rather than spending time and

resources on non-core functions.

Same is the case with cloud computing. As IT has matured, there is no need for every

organization to maintain its own IT department when there is an option of outsourcing, which

can help reduce operational costs and save capital as well.

c. What kind of business value can IT Provide; how does

cloud computing offer this value?

Whenever an enterprise decides to adopt a new technology, it expects the technology to increase

the efficiency of the organization’s daily operations, provide more effective solutions to satisfy

the customer, and lower the costs, or in simple words good business value. Therefore, it is

important to understand what business value cloud computing can offer to businesses. I have

researched about the kind of business value businesses look for and how can cloud computing

offer this, to get a clear idea of why would enterprises want to adopt clouds.

All enterprises have a specific business objective that they focus on. Supporting departments and

sub sections are created in enterprises to maintain and support its main business objective. By

supporting departments I mean to refer to departments like, the HR department, Finance

department, IT department, Marketing department and a lot more. All these departments are

made to support the organization’s core objective. They do not play a part in the actual business

objective directly. They are developed to support and provide good business value to the

enterprise.

Business value is the determining value of businesses [27]. According to a definition:

‘Business value is the present value of all expected future benefits to be derived from the

business.’

They are intangible assets that an organization possesses. Any sort of benefit provided to an

organization is termed as its business value. The benefit can be monetary or non-monetary.

Monetary benefits that an enterprise can get include, operational cost reductions, preserving

capital and making profits [28], as derived from an explanation on defining the kind of value,

cloud computing can provide to businesses. Other than this, the non-monetary benefits that an

enterprise can get include increased customer satisfaction and gaining competitive advantage

mainly.

Focusing on the IT department of a company is a very essential part in order to attain good

business value. According to David S. Sword, some organizations believe that the role of an IT

department is to develop and deploy the correct solution only, and that it does not play a part in

achieving the core business objective [29]. But, there is a lot of business value that IT can bring

to any kind of business through providing effective and efficient solutions.

‘Avanade’ is a company that provides Microsoft technology services to businesses. It conducted

a survey in January 2009 about what business owners think of cloud computing. The survey was

conducted over 500 different kinds of businesses and over 17 different countries. The survey

results stated that 3/4th

of the organizations interviewed believed that ‘cloud computing is a real

technology option’ [30], and half of them believed that ‘technology is an efficient way to reduce

costs’ [30].

The survey results also stated that, 65% of the organizations interviewed believed that ‘cloud

computing helped them focus more on their businesses’ [30], and 70% believed that ‘cloud

computing would improve their organization’s flexibility’ [30].

Another survey was conducted by the BCG group, a consulting firm and advisor on business

strategies in November 2009. The survey was conducted over 30 different kinds of companies.

Its results stated that most of the organizations do not view cloud computing only as a way

reduce costs and manage operations, but they view it as a technology that could improve the

entire IT environment and the company’s business processes. They believe that cloud computing

can provide good business value to an enterprise along with simplifying its IT operations [31].

Analysing the above survey results, it can be concluded that cloud computing is believed to offer

good business value to enterprises and it can prove to be beneficial in many ways.

d. Is cloud computing more suitable for small or large

businesses?

Organizations or businesses are broadly defined in two major categories generally, which have

different needs and get affected by new technologies in a different way. These categories are

‘large businesses’ and ‘small/medium sized businesses’ (SMB’s). The business needs for both

are separate; therefore, new technologies have separate impacts on both.

In order to narrow down my research for the categories of businesses, cloud computing can

affect, I researched about these different categories of businesses. The aim of my research was to

figure out; to what extent can cloud computing affect large businesses and in comparison to that,

to what extent it can affect SMB’s? I intended to investigate; which kind of businesses can cloud

computing prove more suitable for?

In order to carry out my research, I searched for ‘Effects of cloud computing on large

enterprises’, and ‘Effects of cloud computing on small/medium sized enterprises’. As a result of

my research, I came across articles by different reliable newspapers and consulting companies,

which had stated the effects of cloud computing on these different categories of businesses. I

found out different viewpoints by different companies’ articles. I did a comparison of different

viewpoints which is presented further in my report.

Cloud computing is said to be a technology that is in its early adoption phase currently.

According to researches [25] [32] [33] [34], cloud computing will become a huge industry in the

following years to come, with most companies shifting their IT operations over clouds, either

public or private.

According to Ali Khajeh Hosseini; ‘The market for cloud computing services was $16 billion in

2008 and will rise to $42 billion per year by 2012’. [25]

Another author, Stephan Ried states in a report; ‘It estimates a move from $40.7 billion spent on

the global market for cloud computing in 2011 to more than $241 billion in 2020. The public

cloud, which is under considerable scrutiny for security risks, will account for more than 66

percent of the total in 2020.’ [32]

As stated, the market for cloud computing will increase in the years to come. Some businesses

will be early adopters while some will wait for the technology to get stable and matured before

they adopt it. The early adopters will be the businesses which can benefit from clouds to a

greater extent and can manage to tackle the risks it introduces. While, the late adopters will be

the ones who can well manage their business without clouds and can only afford to change their

existing systems once they are sure about the new technology.

According to Jim Cooke as stated in a research paper, cloud computing technology is more

suitable for small/medium sized businesses (SMB’s) [21]. The reason for this is that cloud

computing can offer a great deal of IT services to companies at affordable costs. SMB’s can

benefit greatly by this, because, it will be much more costly for them to develop and maintain

equally competent in-house solutions when compared to cloud computing. The author further

states that, cloud computing architecture is less suitable for large enterprises. Large enterprises

usually own IT assets which are underutilized most of the time, with an exception of peak

timings. If those assets can be used without any increase in the human resource, it is less likely

that the company would be willing to invest in embracing clouds.

Supporting this viewpoint, another author, Hamid Motahari states in a research paper that cloud

computing is mainly targeted for SMB’s and not large enterprises [24]. The reasons stated for

this are the cost saving benefits that clouds provide. It is more suitable for SMB’s to use the pay-

per-use model, as they only have to use IT services occasionally or for limited use. Using cloud

computing architecture in such case can save huge amount of an organization’s capital.

Supporting what is stated in the research papers, a survey conducted by Wall Street Journal

(Largest American international newspaper in terms of circulation), states the increase in cloud

computing adoption by SMB’s in 2010 and 2011 [36]. According to the reviews given by

business owners in the survey, it can be concluded that the main reason for the adoption of cloud

computing in SMB’s is the reduction of operational costs.

According to a Law practitioner, their firm (considered a SMB) has to spend $10, 000 - $12, 000

per year for software licensing which is used just a couple of times per year. While, if they

purchase the software through a cloud provider, they would have to pay only $4, 000 - $5, 000

per year according to their usage [36].

Another major reason specified by the survey is that companies do not have to make huge

investments in order to make their systems and databases available over a network for the

purpose of easy access [36]. By adopting cloud computing architecture, access of organizational

data and processing software’s will be available through remote servers. This will enable

business owners to access information from any physical location at any time.

On the other hand, cloud computing is very important in large enterprises as well, but has

different impacts than it has on SMB’s. Large enterprises usually hold a suitably big IT

infrastructure inside their company. Therefore, it is less likely for large enterprises to shift to

cloud architecture completely [37]. Secondly, security risks mean a lot more to large enterprises

than they do to SMB’s, which will make large enterprises less keen to adopt cloud technology.

Instead of adopting an entirely cloud based system, a private cloud or the hybrid model of cloud

computing is said to be more useful for large enterprises. Private clouds maintain an

organization’s privacy, and are not managed by a third party. They are internally operated by the

company who uses it. Large enterprises are mostly divided into smaller business units, which

usually own separate IT infrastructure. By implementing a private cloud, all different business

units of a company can share the same IT infrastructure. Unused resources of one business unit

can be utilized by another business unit in this case. This architecture will make the most use of

the company’s IT infrastructure, thus, reducing costs [21]. A hybrid model can also be

implemented depending on the business requirement, which offers some services to be shifted

over public clouds while some can be operated by internal/private clouds, depending on the

business needs. According to Sumner Lemon in an article, it is more suitable for large enterprises

to shift infrastructure workloads like desktop applications and communication services over

public clouds while keep databases and application oriented services internally operated over

private clouds [37].

Cloud computing architecture benefits both categories (Large and SMB’s) of businesses. SMB’s

can benefit from this technology by fully embracing and shifting all business process and

services over clouds. While large enterprises can benefit from it by partially adopting according

to their business requirements.

6. Literature Review results of the positive

and negative effects of cloud co,putting

and the Important aspects business

owners need to keep in mind before

making decision

In this section of my report, I have discussed my literature review results about the pros and cons

of cloud architecture when implemented in a business. I have kept my research unbiased towards

either its pros or cons. In order to conduct the literature review, I have chosen literature

published by sources which neither benefit nor detriment by the adoption of cloud computing,

for example, articles published by newspapers, university published research papers and have

occasionally used papers published by IT consulting firms. My reason for choosing such

literature was to keep my research results unbiased and get a complete vision about cloud

computing from a third person’s perspective.

In order to reach a conclusion about whether cloud computing is the solution for businesses or

not and more importantly, what kind of businesses will get more affected than others, it is

important to understand all its aspects. Like every other technology, cloud computing has

numerous positive and many negative aspects alongside as well. But, as every business has a

different objective, and different preferences, it can be said that the same aspect of technology

could provide great advantage to one business while make no difference to the other and vice

versa. For example, a small business may find the pay-per-use model of cloud architecture very

cost efficient, while a large enterprise, which owns huge IT infrastructure and unused resources

might find this equally cost efficient to in house management. Same is the case with outsourcing

organization’s database. A virtual organization may find this feature extremely appropriate

according to its requirements, while an organization dealing with confidential data might look

upon this feature as a risk.

Therefore, the pros and cons of cloud computing cannot be stated as black and white rules for

providing advantage or disadvantage to a business.

The search terms I used for listing down the advantages and disadvantages of cloud computing,

were simply the ‘Advantages and Disadvantages of Cloud Computing’. While, in order to

understand each aspect separately, I searched for all the sub divisions of this section of my report

separately. I research about papers and articles written with the objective of discussing those

specific aspects of cloud computing.

The main problem I encountered while searching for literature was that that mostly papers and

articles provided about the advantages and disadvantages of cloud computing were published by

cloud service providers. I was not willing to use information from them as they would be biased

towards its benefits. It was difficult for me to find literature published by sources which provided

an unbiased view.

I have discussed in this section of my report the pros and cons of clouds, which might or might

not affect every category of business in the same way. It is stated along with the discussion of

every aspect, what kind of businesses will get more affected and which category will have less

affect.

a. Positive impacts of Cloud Computing into

businesses.

i. Economic Benefit

By adopting cloud computing, companies can save huge amounts of money which otherwise has

to be spent on IT departments while using in-house solutions. It saves money mainly because

organizations do not have to develop an in-house infrastructure to support their IT needs. Other

than this, the payment model used by cloud computing is purely usage based, called the pay-per-

use model, and organizations can scale up or scale down the amount of services they use at will

within minutes without going through any complexity [43]. It is further explained in detail how

each aspect helps organizations save money.

The pay-per-use model, also known as the usage based pricing model used in cloud

architectures, means that the user has to pay only for the amount used. This is the key feature of

cloud computing, which provides great economic value to businesses [42].

Usually large enterprises own excessive IT resources, which are not used at all times, but are

maintained for peak times and emergencies. The excessive IT resources stay idle at most times,

while are fully or almost fully utilized at the peak usage times. According to a survey, the

average utilization of IT resources in large enterprises is 5-20% at non-peak times [43]. The peak

times for any enterprise are approximately 2 to 3 months per year. Therefore, most of the IT

resources owned by large enterprises are underutilized for most time of the year. Large

enterprises chose to own underutilized assets mainly because they do not want difficulty to occur

when the company demand increases and secondly because they have enough capital to afford it.

If, companies pay only for the amount of resources used, they can save a huge amount of capital.

A large amount of money is spent every year on the maintenance of unused IT resources.

For example, if a company requires 500 servers at noon and only 100 servers at midnight every

day, which makes an average usage of 300 servers per day. The company is actually using

(300*24) 7200 server hours per day. But, because extra resources need to be maintained

throughout for peak usage timings, the company will have to pay equivalent to (500*24) 12000

server hours per day. The company has is paying for 1.7 times more than what is being used.

(Example taken from external source [44])

By using the pay-per-use model, if the company has to pay any amount less than 1.7 times of

what is being used in this case, it will still save capital. Pay-per-use model can also be

implemented if the usages of resources are distributed over time non-uniformly.

Large enterprises usually hold underutilized resources which stay idle at most times. But, the

case is totally opposite for small enterprises. As obvious by the above discussion, they cannot

afford to own and manage underutilized IT resources throughout the year which will only be of

use for a couple of months in the whole year. Therefore, small organizations usually own

resources that are fully or almost fully utilized at non-peak timings, and just about cater the

needs of peak times. Such use of IT resources is referred to as overutilization.

When a company needs to scale up its IT resources, it has to go through complexities of

purchasing, installing and integrating them with existing systems. This process might take weeks

or in some cases months [43]. Moreover, when a company purchases extra resources in order to

cater peak times, those resources are of no use once the peak time has passed. Demand for

services varies with time in almost every organization. This problem also arises, when an

organization does not know its demand for IT resources in advance of starting a new project.

The rapid elasticity model of cloud computing helps solve all such problems faced by

businesses. Resources are provided on demand by cloud providers [44]. The demand can be

increased or decreased within minutes. Business owners do not have to worry about purchasing

or integrating added resources to existing ones.

Cloud providers offer this service of scaling up and down on demand within minimum possible

time by their multi tenancy architecture. All resources owned by cloud providers are shared by

multiple users [43]. Therefore, unused resources of one client can be leased off to another client,

without any complexities of purchasing, deploying and integrating them. This service makes

organizations save time, and also the nuisance of scaling up or scaling down resources.

Another economic benefit that organizations will enjoy when using IT services through clouds is

the cost elimination/reduction of IT department development, maintenance and upgrades.

Large enterprises or organizations which have an established IT department need to spend a huge

amount of their company’s budget on the constant maintenance of IT. Cloud computing will

help them save this cost and rather invest on the core business objective. But, SMB’s will benefit

from this more. When a new business plans to hit the market, huge initial investments are

required in order to set up the business. By using IT services through clouds, SMB’s can begin

without developing an in-house IT infrastructure [45].

ii.Managerial and Environmental Benefit

As discussed previously, cloud computing offers businesses to use IT services through an

external provider, which reduces the managerial tasks for the organization. For example, if a

company is purchasing database services for its company, it will only have to manage relations

with the service provider, and communicate their requirements to them. The client organization

will not be concerned about creating the database, managing hardware and software involved in

building databases, managing human resource involved and the constant maintenance of

databases. All such issues will be managed by the service provider. Cloud computing technology

also provides ease for new businesses planning to dive in the market.

Enterprises have a frequent concern about databases, which is regular data backup and data

recovery. Databases are not only storage mediums for historical data in enterprises, but play a

very important role in every future decision making process. An organization’s database is its

biggest asset. Cloud computing architecture outsources the client’s databases, and they are

managed at separate physical locations. The same company’s data might be scattered at multiple

physical locations, which means that all data is not stored at a single location.

Storing complete data at a single physical location can be risky because, in case a disaster occurs

at a location, complete data will be lost. While, if data is divided and stored at multiple locations,

parts of data will still be safe. It makes it possible for business owners to keep the business

processes functioning, even if a disaster has occurred [46]. Cloud providers are also responsible

for creating regular backups for databases, which are stored separately [46]. Therefore, instant

data recovery can be done in case the data gets affected. Business owners do not have to spend

on creating backups and recovery management tools in case of cloud architecture.

Cloud architecture also provides the service of scaling up and scaling down of services on

demand within minutes [44] as discussed above. Business owners do not have to be concerned

about purchasing extra IT resources when the demand increases and maintaining them while they

are not being used.

When an organization’s managerial responsibilities reduce because of adopting cloud

architecture, as discussed above, the organization can focus towards its core business objective

more. The human resource required for managing the IT department and the budget required for

the IT can be spent on and used to manage other business processes which will benefit the core

competency of the business [50].

Up till now I have discussed the benefits of cloud computing which are enjoyed by individual

clients, but if things are looked upon from a bigger scale, cloud architecture benefits the

environment as well.

With the use of cloud architecture, less physical infrastructure is used overall. Cloud providers

own infrastructure that is used by multiple clients through multi-tenancy, which means that the

same applications and infrastructure is used by multiple organizations. Thus, separate resources

for each organization are not required. By using this architecture, the same demand for

organizations is fulfilled by reduced number of resources, and no all infrastructure and

applications are used at their full capacity. This efficiency gain of resources reduces power

consumption [50]. It also saves all the energy involved in developing, distributing and disposing

of equipment and applications [51]. Therefore, it can be said that, if looked upon from a broader

perspective, cloud computing benefits the overall environment as well along with benefiting

individual businesses [52].

b.Negative Impacts of Cloud Computing into

Businesses

Cloud computing is a technology that has not matured to its fullest as yet, which is why there are

many loop holes that organizations see and thus feel reluctant to migrate to cloud computing.

According to expert analysis, every new technology which is in the phase of acceptance by the

market goes through complexities, which are solved as the technology matures. Doubts related to

cloud computing, that business owners fear are much similar to the one’s associated with the

concept of virtualization. But, as the technology matured, the issues were solved as well.

Initially it was difficult for business owners to use an external email services for their businesses.

The reason for this was availability and security issues, but, as email service providers increased

their security management and made availability more reliable, the business owners developed

trust and the technology is now widely accepted.

For example, Google has gained the trust of its users through the service it provides to such a

level that ‘google.com’ is considered the dial tone of internet now [1]. If a user tries to open

‘google.com’, and it does not open, the user will perceive that the internet is not working, rather

assuming that ‘Google’ servers are down.

The major disadvantages of cloud computing, understood through literature review are discussed

in the report further. The search terms used for finding literature were; ‘Disadvantages, Risks and

Negative Impacts of Cloud computing’. The literature was short listed on the basis of its source

reliability and publishing date.

i. Dependency issues

Accessing IT services through clouds makes cloud customers dependant in multiple ways. They

cannot make decisions freely about their own applications and data, which is possible while

using in-house solutions. This is because, IT services are owned and managed by a third party

and accessibility of those services is dependent on an external provider and the internet.

Therefore, all individuals/companies involved have to be consulted or at least informed in every

decision making.

Many authors discuss that one of the most important fears of business owners while planning to

opt for cloud computing is the availability of their data and processes at all times. An

organization is responsible for its own data and processes, even when they are managed by a

service provider [54]. Availability of data at any time is not an issue to be worried about when

the data is managed in-house, because all databases are managed by the same organization and

can be made accessible on will at any time. The cloud customer organization becomes

completely dependent on its service provider in case of using cloud architecture. If the service

provider closes down or goes out of business, complete data of any organization depending on its

could become inaccessible for unknown period of time [55]. As explained in an article published

by CA Technologies: one of the largest software corporations in the world; IT infrastructure can

be moved easily between service providers, but it is very difficult for software’s or applications

to be ported [55]. Loosing data and applications developed could be as difficult for a business, as

if it had to start all over again from scratch.

This risk of cloud computing can affect both, small and large businesses but, in different ways. It

cannot be said which could get affected more and which less, as different authors have different

viewpoints to share. According to Gregor Petri, large businesses are organized and established

enough to maintain regular backups; therefore, it will not matter for them if their service provider

loses data. The backup systems can retrieve entire data without any loss of information [55].

While according to another author Micheal Armbrust, large enterprises will be less likely to shift

to cloud computing, because their data and processes are too precious to be lost. While, small

business can risk their data on the price of cost reduction. This is why they will be more likely to

make the shift [44].

Another fear of cloud users is the theft of data. Customers of cloud computing are normally not

aware of the physical location of their data [54]. They are also unaware of the security measures

and encryption techniques that the service providers are taking in order to keep their data safe

[55]. This creates fears for the customer organization, as a result of which, they prefer using in-

house solutions. Any organization using IT services through an external source expects it to be

extremely reliable, and keep them aware of all the security measures taken, which cannot be

done in case of cloud computing.

Lastly, another dependency issue that cloud users fear is, excessive dependency on the internet.

When an organization shifts its entire IT department to a public cloud, it means that all its day to

day processes and activities are dependent on the availability of the internet. While accessing and

operating IT services over internet, it is extremely important to have high-speed and high

bandwidth internet connection [44]. For large enterprises, if internet availability goes down for

even a few days, the consequences can be extremely damaging. Like developed countries,

internet availability is not as efficient throughout the world [56]. Therefore, shifting to cloud

computing seems a bad idea, especially in the countries where internet availability is not very

reliable and fast enough. According to a few authors, because of internet dependency, cloud

computing can never substitute in-house systems [56] [57].

ii. Security, Privacy and Legal Issues

As discussed in a paper published about ‘Moving to the Cloud’, security and privacy issues are

the biggest concern of businesses who are considering shifting to cloud computing [71]. As

discussed earlier in the report, cloud computing outsources a company’s data and processes.

They are managed by a third party (cloud provider), and the customer company loses control

over its own data, once it shifts to the cloud. Every organization has its own privacy and security

policies, which are managed by the company itself, therefore, companies feel secure about their

data and processes. But, when all IT operations of a company are shifted to clouds, the customer

company becomes unaware of the security and privacy policies followed in order to keep their

data secure [25]. The authority for managing security policies shifts to the cloud providers.

Another main reason which increases the security and privacy concerns of organizations

planning shifting to clouds is the multi-tenancy architecture [25]. Same applications and physical

data locations might be shared by multiple businesses using the same cloud providing company.

An author Salvatore D’Agostino discusses that using cloud services does not changes any

security policies, but, it increases the number of people who can view an organizations data [71].

Security and privacy issues related to cloud computing are not new concepts introduced by this

technology, but, they have always been there with using any kind of web services [70]. Cloud

Computing shares these issues with the web services because all services provided by cloud

computing are accessible over the web. Security and privacy issues are a bigger concern for

cloud customers in case of using public clouds [71]. Private clouds are internally managed;

therefore, such issues are not of worry.

Another problem arises with the geographically dispersed servers used by cloud architecture.

The globally dispersed data centres of cloud providers introduce legal issues [25]. For example,

it is possible that a company using cloud services has all its data and applications operated in a

separate country. Different countries have different rules and policies for data protection and it

might create issues for the cloud users. Data protection policies might be contradictory and cloud

users will have to go through government’s jurisdictions in order to get access to their own data.

Another issue could be the integration of an organization’s data, which might be physically

located in different countries with different policies of data handling. Location of data is a very

important factor and it determines which rules it will have to obey [25].

According to researches, Security, Privacy and Legal issues are said to be the most important

factors, which keep businesses restricted from shifting to cloud computing [25]. An author; Jager

discusses that with the use of cloud computing, the authority and power of governments and

organizations will take priority over resources [73]. Thus, it is in the hand of governments to

encourage the use of cloud computing by changing policies and collaborating with each other

[74].

7.Surveys ( Interview /Questionnaires Base)

and Case Studies

a. Views and Experiences of Companies (Businesses) who

aim to adopt / have already adopted cloud computing

My goal for this section of the report is to search for and compile the experiences of some cloud

users. I aimed to search for small and large businesses which have already adopted cloud

computing, fully or partially, and read literature about their experiences about using this new

technology and their perceived advantages and disadvantages.

I tried searching for such companies with the help of search terms like, ‘Companies using cloud

computing/services’, ‘Businesses based on cloud architecture’, etc., but was unable to achieve

any desired results. The results displayed were about the companies providing cloud services to

other businesses. Therefore, I planned to change my search strategy in order to get to my desired

results. I searched for established cloud providing companies, with the hope that

They can provide me with the case studies I am searching for. My initial aim was to list down the

most promising and reliable cloud service providing companies. I planned to read about them

and then search for the kind of customers they cater, which could help me find real customer

case studies.

During my search for cloud service providers, I learned about the companies which are already

in the business of cloud computing. My research about these companies helped me understand

the kind of services they offer, which they believe will be more useful for cloud customers and

which services will not be equally attractive. I also understood the market response and business

owners’ interest in cloud computing, since cloud services have started to initiate.

I searched for cloud providing companies with the search terms, ‘Cloud providing companies’.

By the results, I learned that there are numerous companies offering these services, or are in the

process of planning to launch. In order to short list the list of companies to search about, I

changed my search terms to, ‘Top 5 companies providing cloud computing’. I found different

results by different blogs shared by companies providing articles about technology. According to

a few results, example [58] published in 2009, the top 5 leading companies listed for cloud

computing were; Microsoft, Amazon, Google, Salesforce and IBM. While according to other

resources, example [59] published in 2010, the top 5 companies listed were; Microsoft, Amazon,

Google, Salesforce and Rackspace. I chose between the two different sources, on the basis of

their publishing date primarily. I did this because information provided in an article published

more recently is considered more reliable usually.

The top 5 leading companies in the world of cloud computing according to my research are listed

below along with the services they provide:

1. Microsoft:

The cloud service offered by Microsoft is named Azure, which was launched in 2009. Microsoft

Azure offers PaaS and complete Windows as a service. Microsoft is a new player in offering

complete windows as a service therefore; there are many complexities that need to be solved

[61].

2. Amazon:

The cloud service offered by Amazon is named Elastic Cloud Compute, which was launched in

2006. Elastic Cloud Compute offers IaaS mainly. Amazon is considered to be the innovator in

the cloud computing technology. It was one of the first companies to launch this service [62].

3. Google:

The cloud service offered by Google is named Google Apps, which was launched in 2008.

Google Apps offer SaaS and PaaS mainly. Google is considered a very important player in the

cloud computing market, because it is common knowledge that no one knows internet better than

Google [63].

4. Salesforce:

The cloud service offered by Salesforce.com is named Force.com. Force.com offers SaaS and

PaaS mainly [64].

5. Rackspace:

The cloud service offered by Rackspace is named Mooso, which was launched in 2006. Mosso

offers IaaS and PaaS mainly. Rackspace is a very trusted name in offering hosted data centre

services [65].

Information gathered by an article published by ‘NETWORK world’; an American based IT

publication, providing weekly news for networking specialists [60].

Changing my search strategy to searching and reading about cloud providing companies did get

me to my desired results.

The above sated cloud providing companies make available case studies of their customers for

the purpose of providing information aimed for research work. The case studies state experiences

and views of cloud computing customers about this technology. I have reviewed some of the

case studies and analysed their experiences in order to answer my main research question.

Reviews for case studies

All case studies are provided by the cloud providing companies, therefore I understand that they

will be biased towards stating the benefits of cloud computing and the problems encountered will

not be stated as much. I have considered these case studies and reviewed them being aware of

their biasness in order to understand what kind of real life problems can cloud computing solve,

and what kind of businesses have shifted/will tend to shift in future. I have reviewed one case

study for each of the above stated cloud providing companies, to get a variety of views. There

was no case study for the company Rackspace; therefore I have studied case studies for the

remaining 4 companies.

1. Microsoft Azure (NASA/JPL Project) [66]

NASA does research work about space exploration, and holds a lot of information regarding

space objects and their characteristics. America’s open government initiative says that all

information which public agencies hold should be kept transparent to the general public. This is

why, NASA wanted to develop a platform where they could update current information about

space exploration regularly, and which could be viewed and processed by the general public. The

problem was that the space images and videos that NASA had were extremely high quality and

huge in terms of computing space. The only solution to create a platform where NASA could

regularly update and manage data, yet keep accessible to general public was to develop a web

application. But, the problem was that web applications could not manage and process such huge

amounts of data. The solution was provided by developing a website using cloud architecture,

which would be accessible over the internet and will be able to manage and process huge

amounts of data as well. The site was built using a number of technologies, out of which one was

Microsoft Azure.

The site proved to be successful and fulfilled all the requirements. Huge amounts of data were

transferred and made accessible to general public. General public could also process the

information they viewed. In the beginning of the site launch, the website experienced problems

due to increased site traffic. The site was managed by 10 servers initially. When the problem

occurred, it took minutes for site managers to add 20 extra servers and keep the site running

through cloud computing. Using cloud computing architecture, proved to be a beneficial solution

for NASA.

2. Amazon Web Services (3Scale Project) [67]

3Scale is a company which provides SaaS management infrastructure. It enables its customers to

open, control and manage the distribution and usage of data and services. 3Scale has been using

Amazon web services as a frame for their business and have built their business on Amazon’s

web services (AWS). 3Scale Company says that it was impossible for their business to develop

without the cloud services provided by Amazon. AWS has provided them functionalities which

were not possible without the implementation of cloud computing.

3Scale Company states that the biggest advantage they benefited from by using cloud computing

was the facility to scale up and scale down IT resources at any time according to the

requirements and pay for the resource according to the amount used. Other benefits stated by

3Scale are the quick storage of identical resources in multiple physical locations. This provides

the company to have multiple entry points in the data, which makes it easier to access.

3. Google Apps (3Tailer Project) [68]

3Tailer is an American based company which is a niche online marketplace. In 2011, 3Tailer

was stated as one of the fastest growing business in North Carolina, America. 3Tailer mangers

state that Google Apps have been the key success factor in their business, and they are very

satisfied by the cloud services they use. One of the major advantages of cloud computing

according to 3Trailer in their business is the scaling up and scaling down of IT resources without

increasing cost. Other than this they believe that cloud computing has made it easier for their

business to share data within the company. The mangers of the company also take the

outsourcing of databases as an advantage. This is because; they believe it is comparatively safer

and reliable to store sensitive organizational data in a cloud than to have it stored in a disk/drive

locally, as local drives can be damaged easily.

4. Salesforce Force.com (Dell project) [69]

Dell Company wanted to develop a centralized customer relationship management system for all

their branches around the world. The purpose of developing a centralized system was to make

the processes of all Dell branches visible to every other branch, and make communication

between them easier. When they considered developing a centralized system, the idea was

dropped because it was going to be too costly to afford. Therefore, in order to develop an

appropriate solution within controlled budgets, they opted for cloud computing architecture. The

company Salesforce developed an application fulfilling all the company’s requirements based on

cloud architecture. Complete data and processes were transferred to the clouds, thus, were made

accessible at multiple physical locations. Data could be processed from various locations and

stored immediately on the clouds, making it visible to all. Reviews provided by Dell Company

state that the solution provided by Salesforce was extremely useful for them and made the

company flourish.

b. Survey

Reviewing case studies provided by some companies helped me in understanding the kind of real

situation that cloud computing can solve. It also helped me learn about practical experiences and

views of actual customers of this technology. But, as stated earlier, the case studies available

were provided by businesses offering cloud services, therefore the literature provided by them is

quite likely to be biased towards the positive impacts of cloud computing. Therefore, I decided to

conduct surveys myself from companies, in order to get unbiased views about cloud computing.

Due to limited time, resources and contacts, I was only able to get in contact with companies

from a specific geographical region (Mauritius). Companies belonging to a specific geographical

location may share numerous things in common, for example, nature of internet connection,

cultural values, etc., which might make their point of view about embracing a new technology

similar. My initial aim was to gather views from all sorts of different business categories, but,

again due to lack of resources, I was unable to achieve that. I managed to gather views from 7

different business owners out of the 17 I contacted. The proof of contact established by

companies which did not fill and return the survey questionnaire can be seen in Appendix 3.

i. Interviews/Questionnaires from companies stating their views about embracing

cloud computing

I prepared a questionnaire, which was sent to companies, in order to receive their views

(Appendix 2). In order to prepare questions for my questionnaire, I had to conduct a literature

review about the advantages and disadvantages of cloud computing. After gaining a good

understanding of the positive and negative aspects of cloud computing, I prepared my questions

aimed at asking business owners whether they agree with the benefits and drawbacks of this

technology stated by the literature provided or not. I structured such questions before the one’s

asking directly about whether they would shift or not. My intention was to make business owners

aware of all the positive and negative aspects of cloud computing before they answer the direct

question about making the shift.

The questions included in the questionnaire can be seen in Appendix 2.

The answers received were rarely plain yes/no natured answers, but majorly they provided

explanations to what they believe and why they believe so. This was not my initial intention but

getting detailed answers did provide me with a better understanding of their views.

7 companies that provided their views are as follows:

Allainet: The core business objective is to develop robust websites that are easy to use, from

applications and e-commerce to interactive media

ZTE Corporation : The core business objective is telecommunication

En Pointe Technologies: The core business objective is to provide IT services with a national

footprint, serving small, mid-market and large organizations.

Knowledge Platform: The core business objective is to provide solutions for governance and

quality change management

Mtml: The core business objective is telecommunication

Elixir: The core business objective is software development for document archival and web

based support

Coeus Solutions: The core business objective is software development for American and

European markets

Results

I have compiled the results obtained in tabular format which are as follows:

1. How much human resource does your company’s IT department have (approximately)?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

20 50 70

30+ includes

(18 Dev./QA,

Accounts,

Support,

Network/System

support) 80 200 50-70

2. Since how long has your company had an IT department?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Since

beginning 8 years 19 years

Since

inception 7 years

Since

always 8 years.

3. What portion of the company’s budget is spent on the IT department’s human resource each year

(approximately)?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Not

available $250,000 $50,000+

Not

available 20%

Not

available 20%

4. What portion of the company’s budget is spent on the IT department’s hardware upgrading each

year (approximately)?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Not

available $25,000 $2,000,000+

Not

available 10%

Not

available 30%

5. What portion of the company’s budget is spent on the IT department’s software licenses each

year?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Not

available

Not

available $50,000+

Not

available 6%

Not

available 10%

6. Are there any other major budget requirements of the IT department?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

No

Vendor and

Consultation

Repair and

Maintenance No No

Yes, since

it is an

IT/software

company,

the budget

is huge.

EC2

storage -

basecamp

- red

mine -

email

solutions

- drop

box

7. While making changes in the organization or launching new products/services do the IT

department processes cope up with the other department’s (Finance department, HR department,

etc.) or do the IT processes take too long?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

They

usually

cope up No

Yes they do

cope up

Not

available

It often

takes

too

long

Yes, they

cope very

well, the

company

is very

well

established

Neither

really.

& the

processes

are well

defined.

8. Is managing the IT department (software licensing, hardware upgrades, database management,

increasing demand of resources) keeping you restricted from giving your full potential to the

core functionality of your company? Do you think your company could focus more on the core

business objectives if it did not have to worry about managing the IT department?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Maybe,

debatable No Not available

That’s true

and we are

developing

solutions

that can

work on

cloud and

box

Yes I

agree. I

believe my

company

could focus

more on

the core

business

objectives

if it did not

have to

worry

about

managing

the IT

department.

No,

again our

processes

are very

well

defined.

Yes

definitely.

9. Does your company own hardware resources that are not fully utilized at all times?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Yes Yes Yes there are

We

generally

need more

resources

and servers

as our

clients

increase. Yes

No, all

our

resources

are fully

utilized. Yes.

10. Has your company ever purchased extra hardware for a specific project which is not of any use

after that project has ended?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Yes Yes No No Yes No Yes

11. Do you think your company could save capital if it purchased IT services on demand? For

example, purchasing more resources for the peak times and paying for less the rest of the time.

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Yes

No as we

are cloud

solutions

equipments

vendors as

well

Yes, buying

them on

offshore

locations

We are

aligning to

Windows

azure for

this

Well it

depends on

the projects/

requirements

though I do

agree that

company

saves capital Yes Yes

on

purchasing

services on

demand.

12. Do you think your company could save an evident amount of capital of it did not have to spend

on hardware up gradations for IT?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Yes

short term

Yes but

long term

No

Have to keep

everything up

to date. Never

thought about

compromising

on IT

We can

save

reasonable

amount, as

we always

need to

buy

Servers

from

hosting

company

Hardware

up

gradation

plays vital

role in

coping up

with a

competitive

market

such as

Mauritius

(for

Telecom

Sector) as

it not only

prevents Yes Yes

loss of

revenue but

also

ensures a

better

service to

end users

13. Would you consider outsourcing your company’s IT department, and purchase IT services

(software’s, database capacity, processing speed) on demand?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

No

Most are

already

outsourced

except for

internal

support and

critical

information

that can’t

be

outsourced

Some

percentage

of IT

departments

is outsourced

therefore

purchasing

services is

always there

It

occasionally

happens

IT

department

in our

company is

a core

department.

Therefore I

would

strongly

disagree

with out

sourcing IT

department.

No, we

handle IT

services

very well

within

the

company.

No - we like

to keep

things in

our own

control but

we do use

services like

amazon

EC2 and

Drop box

but I don't

consider

that

outsourcing.

14. Would you trust a third party to store and manage your company’s data? Or would privacy issues

obstruct you from doing so?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Would

not

trust

third

party

need to

trust but

truly

critical data

needs to be

in house

Privacy can

be a big

issue. We are

offering our

own data

storage

services

It depends

on our

client. If

it’s a bank

or financial

institute

then we

have an

issue

Privacy

issues

would

obstruct

us from

doing

so

No, we

manage

very well

on our

own. We

are in the

business of

handling

data of

other

companies.

Yes if

it’s

authentic.

15. Would you rely on a third party for all your software ownership and processing? Keeping in

mind that the company (third party) might go out of business at any time.

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

No No

Don’t think

so

We try to

avoid vendor

affinity and

resolve any

dependencies

through

design

heuristics

We

would

not! No No.

16. Would you consider spending capital on outsourcing your IT department and spending on

integrating your current systems with the new architecture of having external IT resources, if it

offers monetary and managerial benefits in the longer run?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Yes No Of course Not No we No, our Maybe.

available would

rather not

consider

spending

capital on

outsourcing

current

systems

are set

up

well.

17. Would your company consider using all IT services (software’s, databases, platform, etc.) over

the internet considering the internet availability and its varying speed?

Allainet

ZTE

Corporation

En Pointe

Technologies

Knowledge

Platform MTML Elixir

Coeus

Solutions

Maybe No

Not so sure

about this,

however

internet is

playing a big

role in our

country

Yes, We

are already

considering

windows

Azure for

that

Well it

depends on

the

requirement;

we would

rather

consider

using all IT

services

though. No

No. Too

unreliable.

ii. What did I learn from interviewing different companies? To what extent are

companies willing to adopt this technology? What are the fears of business owners? Why?

Interviewing different business owners helped me understand the actual point of view of the

potential customers of cloud computing. My survey results showed a different result from what I

concluded by the literature review. As discussed earlier in the report as well, literature published

about any new technology is more likely to be stating the positive aspects than stating the

negative aspects. The literature review that I conducted was more focused towards the positive

aspects of cloud computing, though I did manage to find literature stating its negative aspects as

well.

Companies that I surveyed have well established IT departments, which have been set up around

10 years ago each. Some of which have their core business objective as IT, while some do not.

Both, IT and non IT businesses stated that a huge amount of their organization’s budget is spent

on the IT every year. Breakdown of IT costs is available in the survey results stated above. As an

approximate value, it can be said that around 35-45% of a company’s budget goes towards

managing the IT department.

My survey contained further questions, which aimed to figure out whether IT departments create

nuisance for organizations or do they cope up without requiring any extra effort. The results

reflected different results for IT and non IT organizations. Results showed that organizations

having IT as their core business objective are not bothered about the extra effort required by the

IT department as it is their core competency. While, non IT organizations did agree that IT

departments create nuisance for the organization.

It was reflected in the survey results that organizations do agree over all the advantages provided

by cloud computing. All organizations surveyed, agreed upon the fact that a huge amount of

company’s capital could be saved if IT resources were outsourced and purchased on demand. It

was mutually agreed that organizations normally own underutilized assets, which is a waste of

money and resources. This money could be saved in case all IT services are purchased from

external sources and the pay-per-use payment model is used for payment.

Until now the same results as the literature review were reflected. But, further in the survey

results, it shows that the disadvantages of cloud computing might be less in number when

compared to its advantages, but are of much more value and importance than the advantages.

One of the biggest fears of business owners is the privacy issue, the second one being the

dependence on cloud providers and internet. The IT department is one of the most influential

parts of an organization; it holds all the company’s confidential data and all processes of an

organization. Therefore, considering cost reductions on the cost of privacy is not acceptable by

business owners. Secondly, relying on a third party (cloud provider) and internet for using all IT

services of a company is again something not affordable as stated by business owners.

8. Conclusion

As defined by the literature review results, cloud computing offers a great deal of monetary

benefits in businesses. The case study results and the survey results also agreed over the

monetary benefits cloud computing provides. It offers operational cost reduction and saves a lot

of capital which is wasted in case of in house solutions. The literature review results do bring in

view the negative impacts of cloud computing as well, but they were better understood by the

survey results. I concluded by my survey results that, privacy and security issues of cloud

computing are the biggest reason which are keeping businesses away from adopting clouds. As,

it is a technology in its early stages, it is not very well established, which is why, business

owners fear the privacy and security of their data and operations while considering to make the

shift. Organizations, especially large enterprises can afford to compromise on their budgets but

cannot compromise on organizational privacy.

It is more likely for SMB’s to make the shift than it is for large enterprises. The reason being,

that large enterprises normally own underutilized assets, therefore they do not have to worry

about upsizing or downsizing or even for extra costs. While businesses which have smaller

infrastructures are more likely to shift, because the benefits offered by cloud computing are more

advantageous for them. Cloud architecture gives them the facility of upsizing and downsizing on

demand and also saves costs. Saving costs is a more essential aspect to worry about in SMB’s, as

usually they are already struggling with budgets. But, SMB’s holding confidential data would

not be as willing as the rest even after considering its benefits.

But, once the cloud computing technology has matured, and its security measures gain

reputation, large enterprises and organizations holding confidential data are also likely to shift to

cloud computing.

9. Project Management: How it proceeded

The project management plan that I had developed in the beginning worked fairly well according

to what I planned to achieve. I was unable to follow the exact timelines defined in the beginning

of the project (Appendix 1) due to the different projects which I was handling at work. In the

beginning, I stayed behind of my allocated time but as I progressed, my speed quickened and I

was able to achieve the tasks that I was lagging behind in.

The limitation of my project plan was the time allocated to get my surveys done. This drawback

was suffered by my survey results. I allocated a time of 2 weeks for business owners, whom I

had contacted several times in order to fill my survey forms and return back. After experience, I

believe that the time allocated was less than required and company owners did not respond back

to my surveys well in time. As a result of which, I was only able to collect views of 7 business

owners, out of 20 as my initial plan.

10.Further Research

Due to lack of time and resources I was unable to conduct complete research around the topic. I

believe there are still many questions to be answered in order to state more precise impacts of

cloud computing on small and large businesses. I kept my research questions limited due to the

limited time constraint, which I believe can be extended in order to understand more about the

adoption of this technology in businesses. There has been talked much about the benefits of

cloud computing, and there are numerous businesses in the market which provide cloud services.

It is very common to look for literature about cloud computing which states its benefits only and

does not talk much about what limitations it has. There is enough literature provided by

companies providing cloud services as well, which is obviously published for promotional

reasons and is biased towards its benefits. I believe there is much to research about the

limitations and the loop holes of cloud computing.

I narrowed down some research topics, which could be researched upon in order to answer such

questions. Business owners which are potential customers of cloud computing usually own an IT

department, and in case they plan to make the shift, they will have to transfer all existing

processes to the cloud, or in some cases integrate existing process with cloud services. In order to

do that, there will be technical complexities involved, which might be a big turn off for business

owners. Research could be done to find out the kind of technical complexities businesses might

have to go through in order to make the shift.

Other than technical complexities, there would be cost involved in shifting to a new technology.

This cost structure might be out of budget for some business owners even in case it provides

benefits in the longer run. Research could be done about the exact cost packages involved for

shifting to cloud computing for different kinds of businesses according to the amount of cloud

services required.

One of the other research topics that I narrowed down is the kind of issues that a company might

go through in case it plans to reverse back to in house solutions after embracing cloud computing

once. I believe this might be a helpful piece of research work for business owners who are

planning to adopt cloud computing. Before experiencing a new technology, customers always

fear about, what if the new technology is not satisfactory enough? Therefore, I believe it will be

useful to research about the strategies and complexities involved in reversing business processes

back to in house solutions.

Other than this, I believe that more effective research techniques like surveys and interviews can

be applied in order to get more accurate and practical results. I was unable to interview business

owners from diverse business objectives and diverse geographical locations due to lack of time

and resources. I believe by doing this, the research results can get more precise and realistic. I

believe that by interviewing business owners, one can get results which are difficult to figure out

through literature review, and the results obtained in such a way can be more practical than

results obtained by adopting other means of research.

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12. Appendices

Appendix 1: Timeline

Conducting general research about what is cloud computing and its related

aspects which can create impact on businesses (e.g. Open clouds, private and

public clouds)

11-15 July

Writing corresponding report section 16-17 July

Listing the different classifications of businesses that can get affected (either

positively or negatively) through the embracing of cloud computing through

conducting literature review

18-22 July

Conducting literature review about what kind of business value, businesses

require?

25-29 July

Writing corresponding report section 30-31 July

Conducting literature review about what kind of affects can cloud computing

have on what sort of businesses?

1-5 Aug

Writing corresponding report section 6-9 Aug

Developing Survey Forms/Questionnaires for different companies to know

about their knowledge and views about adopting cloud computing in their

businesses

10-12 Aug

Compiling survey results and writing corresponding section of report for the

kind of impacts cloud commuting can have on businesses – according to the

survey results

14-22 Aug

Conducting literature review about what complexities do companies have to

go through in order to adopt cloud computing?

23-28 Aug

Writing corresponding report section 28-31 Aug

Conducting literature review about how can a company get complete 1-4 Sept

advantage of a cloud?

Writing corresponding report section 5-7 Sept

Writing conclusion of the report – Answer to the business question defined 9-15 Sept

Writing the project management methodology I followed and how I

accomplished it?

15-18 Sept

Writing the kind of systematic literature review I followed and how I

accomplished it?

18-22Sept

Finalizing the format of bibliography and compiling appendices 22 Sep – 5

Oct

Appendix 2 : Questionnaire

Questionnaire about Adopting Cloud Computing in your Business

University of Technology

Deekshant Jeerakun

Dear Sir / Madame

I am an MSc student at the University of Technology from the Enterprise Security and Digital

Forensics Department. Mauritius. I am writing a dissertation on the topic ‘Impacts of Cloud

Computing on Small and Large Enterprises’. In order to do my investigations about what

business owners think about adopting cloud computing in their businesses, I require the

viewpoint of different business owners. I will be thankful if you could provide me with details,

the answers to my questions.

If any question in this questionnaire is not applicable to your company, please omit it.

University of Technology, Mauritius

University of Technology, Mauritius

Survey Questionnaire

Adoption of cloud computing in business

Please fill in this questionnaire.

SECTION A: Enterprise Details

1. Name of company

2. Address

Phone No : Fax No. :

Email address : Website :

3. Name of Contact person :

4. Year started operation :

5. Main Objects of Enterprise as per its Act / MOA:

(i)

(ii)

(iii)

(iv)

(v)

6. Main functions carried out:

(i)

(ii)

(iii)

(iv)

7. Number of employees during the last 3 Financial Years

2010 2011 2012

8. Since how long your company has an IT Department

No of Years :

9. What portion of the company’s budget is spent on the IT department’s human resource each

year (approximately)??

Percentage :

10. What portion of the company’s budget is spent on the IT department’s hardware upgrading

each year (approximately)??

Percentage :

11. What portion of the company’s budget is spent on the IT department’s software licenses each

year?

Percentage :

SECTION B: Cloud Computing

12. Do you know what is cloud computing?

Yes No

13. If ever your company has the chance to move on cloud, will you go for it?

Yes No

14. Considering having geographic location for offices , would your company move on with the

cloud concept which enable to manage everything from any location

Yes No

15. Does your company own hardware resources that are not fully utilized at all times?

Yes No

16. Has your company ever purchased extra hardware for a specific project which is not of any use

after that project has ended?

Yes No

17. Does your company do have the services of another backup site in case of failure for main servers?

Yes No

18. Do you think your company could save an evident amount of capital of it did not have to spend on

hardware up gradations for IT if moving onto cloud?

Yes No

19. Would you consider outsourcing your company’s IT department, and purchase IT services (software’s,

database capacity, processing speed) on demand?

SECTION C: Security Aspects

20. Would you trust a third party to store and manage your company’s data, if all security aspects are met?

Yes No

21. Cloud computing need a good internet access. If you were given the option to move on cloud, will

internet speed connectivity be an issue for you??

Yes No

22. Will you feel safe for your data onto cloud ?.

Yes No

23. Would your company consider using all IT services (software’s, databases, platform, etc.) over the

internet considering the internet availability and its varying speed?

Yes No

Date: ………………………

Thank you for your invaluable input and kind collaboration

Personal Contact Details:

Mr Deekshant Jeerakun (Phone 5 958 7777/ 5 743 2638)

Email: deekshant@live.com

Appendix 3 : Company contacts

Email sent to different companies:

Deekshant Jeerakun

August 17

Dear Sir / Madam

I am currently writing my MSc dissertation on the topic ‘Impacts of cloud computing on small

and large enterprises’. In order to complete my research for it, I need to get some surveys done

from different companies. It will be really helpful for me if you could get my survey done from

the IT Dept. of your esteem company. The survey asks questions about whether business owners

want to shift to cloud computing or not, what benefits do they think will they enjoy if they do,

and what risks do they think involve in this technology shift.

I would be grateful if you could send me the concerned person email address so that I can send

him the questionnaire for my survey or I will be very helpful for me if you could get it filled

from your company. I need to get it done before 31st August.

Looking forward for your response.