Demystifying the Cloud – Drawing the Lines between Technologies and Concepts

BACHELORARBEIT

Herr Kevin Arnot

Demystifying the Cloud – Drawing the Lines between Technologies

and Concepts

2013

Faculty of Media

BACHELOR THESIS

Demystifying the Cloud – Drawing the Lines between Technologies

and Concepts

author:

Mr. Kevin Arnot

course of studies: Business Management

seminar group: BM10w2-B

first examiner: Herr Prof. MBA Horst Müller

second examiner: Jenifer Bush, Capgemini US LLC, Marketing

Director

submission: Mittweida, 23rd July 2013

Einreichung: Mittweida, 23.Juli 2013

Fakultät: Medien

BACHELORARBEIT

Die Enthüllung der Cloud – Abgrenzungen von Technologien

und Konzepten

Autor/in:

Herr Kevin Arnot

Studiengang:

Business Management

Seminargruppe: BM10w2-B

Erstprüfer: Herr Prof. MBA Horst Müller

Zweitprüfer: Jenifer Bush, Capgemini US LLC, Marketing

Director

Einreichung: Mittweida, 23.Juli 2013

Bibliographic Notes

Arnot, Kevin:

Demystifying the Cloud – Drawing the Lines between Technologies and Concepts

66 Pages, Hochschule Mittweida, University of Applied Sciences,

Faculty of Media, Bachelor Thesis, 2013

Abstract

In recent years the term Cloud has become popular in the world of technology. It is

used to describe many different Information Technology offerings, but people are

adapting this word without truly understanding it. “Demystifying the Cloud – Drawing

the Lines between Technologies and Concepts” by Kevin Arnot takes a look at many

levels of the Cloud and gives a comprehensive overview of the technologies and ideas

that make it a paradigm shift. The author analyzes the term methodically by leveraging

appropriate information from the Internet as well as from experts. An important mile-

stone in understanding the Cloud accurately is differentiating between its components.

These include: underlying technologies, the three Cloud Service Models (SaaS, IaaS

and PaaS) and how it is deployed, publically or privately. The result is to understand

that a Cloud can be composed in different ways and therefore serves exactly the needs

of its users. Furthermore, the author describes challenges that individuals and busi-

nesses have to deal with equally and reviews possible solutions. Cloud technology will

continue to evolve; however, the future business value of the term “Cloud” will depend

on how companies continue using or misusing it.

Table of contents V

Table of contents

Table of contents........................................................................................................ V

Table of abbreviations ............................................................................................. VII

Table of figures ......................................................................................................... IX

List of tables .............................................................................................................. XI

1 Introduction ......................................................................................................... 1

2 Defining the Cloud .............................................................................................. 3

2.1 History of the Cloud .................................................................................... 3

2.2 Definitions on the Internet .......................................................................... 6

2.3 Definitions by providers and thought leaders .............................................. 7

2.4 Definition by the National Institute of Standards and Technology ............... 9

2.5 Summary of definitions ..............................................................................11

3 Technologies and Terminology .........................................................................12

4 Cloud Service Components ...............................................................................20

4.1 Cloud Service Models ...............................................................................20

4.1.1 Infrastructure as a Service (IaaS) ............................................. 20

4.1.2 Platform as a Service (PaaS) ................................................... 21

4.1.3 Software as a Service (SaaS) .................................................. 22

4.2 Cloud Deployment Models ........................................................................24

4.2.1 Public Cloud ............................................................................. 25

4.2.2 Private Cloud ........................................................................... 26

4.2.3 Community Cloud .................................................................... 27

4.2.4 Hybrid Cloud ............................................................................ 30

5 Challenges ..........................................................................................................33

5.1 Traditional Hosting versus Cloud Hosting ..................................................33

5.1.1 Traditional Hosting ................................................................... 34

5.1.2 Cloud Hosting .......................................................................... 35

5.2 Comparing “real” and “fake” Cloud Software Solution ...............................37

5.3 Businesses and Consumers ......................................................................41

5.4 The Consumer Cloud Trap ........................................................................45

5.5 Cloud Security ...........................................................................................47

6 Questionable Features .......................................................................................54

Table of contents VI

6.1 The “Green” Cloud ....................................................................................54

6.2 The Cloud’s Effect on IT Management ......................................................55

7 A simple example: Charlie’s Chocolates ..........................................................58

7.1 Finances ...................................................................................................61

7.2 SuccessFactors Financial Example ...........................................................62

8 Outlook and Conclusion ....................................................................................65

Bibliography ............................................................................................................. XII

Appendix ................................................................................................................. XXII

1. Call with Matt Mansfield – President of Matt About Business, LLC

Eigenständigkeitserklärung ................................................................................ XXIV

Table of abbreviations VII

Table of abbreviations

Abbreviation Explanation

24/7/365 24 hours a day, 7 days a week, 365 days a year

AD&D Application Development and Deployment

API Application Programming Interface

ASP Application Service Provider

AWS Amazon Web Services

CAGR Compound Annual Growth Rate

CapEx Capital Expenses

CIO Chief Information Officer

CTO Chief Technology Officer

IaaS Infrastructure as a Service

IT Information Technology

LLC Limited Liability Company

NIST National Institute of Standards and Technology

NYSE New York Stock Exchange

OpEx Operational Expenses

OS Operating System

PaaS Platform as a Service

ROI Return On Investment

SaaS Software as a Service

Table of abbreviations VIII

SLA Service Level Agreement

SMB(s) Small and Medium-sized Business(es)

Table of figures IX

Table of figures

Figure 1: From the Briefcase to the Cloud (Own Design cf.

http://www.gutewerbung.net/wp-content/uploads/2013/04/Don1.jpg, 2013) .................. 2

Figure 2: Floppy Disk (Microsoft, 2013) ........................................................................ 3

Figure 3: A History of The Cloud (Own Design cf. Matt Mansfield,

http://www.youtube.com/watch?v=9LVWnS_Cz4M&list=WLB4449357EB4C58CF,

2013) ............................................................................................................................ 4

Figure 4: Gartner’s Properties for Providers and Customers (Own Design, see Footnote

19) ................................................................................................................................ 8

Figure 5: Cloud Enabled Devices (Icciev.com, 2013) ..................................................11

Figure 6: Client Interactions (Own Deisgn cf.

http://www.pcmag.com/encyclopedia/term/37856/api) .................................................13

Figure 7: Rackspace API Advertisement (http://javascriptweekly.com/archive/136.html,

2013) ...........................................................................................................................14

Figure 8: Virtualization (Own Design, 2013) ................................................................16

Figure 9: Coke Chase Advertisement 2013 (Adweek.com, 2013) ................................18

Figure 10: Cloud Model Examples (Own Design cf. http://www.jansipke.nl/top-cloud-

computing-providers/, 2013) ........................................................................................20

Figure 11: The Three Layers of Cloud Computing (Own Design, 2013).......................22

Figure 12: Cloud Service Model‘s Access, Control, Location and Cost (Own Design cf.

http://technet.microsoft.com/en-us/magazine/hh509051.aspx, 2013) ..........................24

Figure 13: Cloud Service‘s Access, Control and Ownership (Own Design cf.

http://blogs.gartner.com/thomas_bittman/2009/04/08/the-spectrum-of-private-to-public-

cloud-services/, 2013) .................................................................................................26

Figure 14: In-House Data Center (Own Design cf. http://www.datamation.com/cloud-

computing/what-is-private-cloud.html, 2013) ...............................................................27

Figure 15: Complete Overview of Cloud Service Models (Own Design cf.

http://technet.microsoft.com/en-us/magazine/hh509051.aspx, 2013) ..........................30

Figure 16: Cloud Tool Box (http://ants.etse.urv.es/web/, 2013) ...................................31

Figure 17: Enterprises and Clouds (Own Design cf. http://rob-

livingstone.com/2013/04/public-private-community-and-hybrid-cloud-explained/, 2013)

....................................................................................................................................32

Figure 18: Traditional Hosting Model (Own Design cf.

http://blog.gogrid.com/2013/04/23/how-to-create-an-auto-scaling-web-application-on-

gogrid-part-1-theory/, 2013) .........................................................................................35

Figure 19: Cloud Hosting Model (Own Design cf.


gogrid-part-1-theory/, 2013) .........................................................................................36

Figure 20: Application Service Provider (Own Design, 2013) ......................................38

Figure 21: Cloud Application Provider (Own Design cf.

http://www.teamwox.com/en/groupware/articles/60/saas-online-collaboration-system,

2013) ...........................................................................................................................39

Figure 22: App versus Browser Usage (Khalaf, 2013) .................................................42

Figure 23: Interaction Between Companies and their Customers (Own Design cf.

http://www.youtube.com/watch?v=cQeCnj3Gy6c, 2013) .............................................43

Figure 24: Influence of being connected ......................................................................44

Table of figures X

Figure 25: Cloud Dangers (Own Design, 2013 ............................................................46

Figure 26: VMware‘s Equation of Trust (Own Design cf. Footnote 118) .......................51

Figure 27: Skill Requirements for Cloud Services (Own Design cf.

http://mscisyaminimishra.files.wordpress.com/2012/10/cloudcomp.pdf, 2013) ............56

Figure 28: Cost Structure of an On-Premise Human Resource Information Solution ...63

Figure 29: Cost Structure of a Cloud-based Human Resource Information Solution ....63

List of tables XI

List of tables

Table 1: Cloud Services Compared .............................................................................23

Table 2: Comparing Private and Public Cloud .............................................................29

Table 3: HostingModels Compared .............................................................................36

Table 4: Different Characteristics between Hosted Applications and SaaS ................39

Table 5: US Usage of Major Cloud Media Services .....................................................45

Table 6: Google Brands Overview (Google, 2013) ......................................................45

Table 7: Significant Concerns with Cloud Computing ..................................................47

Table 8: Main Security Questions ................................................................................49

Table 9: Chances versus Risks ...................................................................................53

Table 10: Cost Structure of an On-Premise Human Resource Information Solution

...................................................................................... Error! Bookmark not defined.

Table 11: Cost Structure of a Cloud-based Human Resource Information Solution

...................................................................................... Error! Bookmark not defined.

Table 12: Typical Costs for a 10,000 Employee Company ..........................................64

Introduction 1

1 Introduction

Over the last 40 years the way people have shared and carried information has

changed rapidly, going from paper, floppy disks, CDs, USB drives to storing data on

the Cloud (see Figure 1). Today we are connected to the Internet 24 hours a day 7

days a week (24/7) having access to all our information, data and sharing everything

on social media platforms. This has also changed the way we do business and engage

customers and business partners. The perpetual connection allows businesses to be

agile and proactive or reactive to market events. Taking care of customers and part-

ners through so many channels is very time consuming and requires a company’s full

attention. Cloud technology is said to be a milestone in making it easier to concentrate

on your core business and is supposed to bring a company many benefits to making

their business more successful.

Firstly this young topic deserves a lot of attention, because global players in the indus-

try like Amazon, Salesforce.com, Google, Microsoft and Apple have been working on

their solutions for years and are spiking the interest of all companies that are looking to

lower their operational costs. Secondly the Cloud does not only enable big business to

fully take advantage of their capabilities, but it is also valuable to smaller businesses

and startups, which can save money on their IT infrastructure. Furthermore it offers

opportunities for people without a technology background to succeed with their ideas

through using simple interfaces that they can operate without an IT professional. Last

but not least there are the common users, who use Cloud Services to access their mu-

sic and data from anywhere in the world. It’s an emerging technology that is far from

reaching its fullest potential.

The author, Kevin Arnot, Marketing, Brand and Media Student at University of

Mittweida recognizes these changes and the trend around the word “Cloud”. His thesis,

“Demystifying the Cloud – Drawing the Lines between Technologies and Concepts”

takes a look at many topics connected to the Cloud and focuses on why it is so hard for

many to understand what Cloud computing really means. It is designed to give a high

level insight of the Cloud. Clearly this topic is unclear or “cloudy” and there’s a need to

learn more without using complicated terms and expressions. The key goal of this the-

sis is to give the reader a simple explanation of the Cloud and confidence to participate

in conversations about it. This is achieved by catchy examples and simple terms, which

make it easier to understand the Cloud’s technical background. In addition tables and

figures are vital to this topic to be able to visualize the processes.

Introduction 2

It will look into giving the Cloud a face by exploring its origin and the evolution of the

Internet.1 Next step will be to investigate the technical background and what kinds of

Cloud services are offered. After taking a closer look at the benefits and disadvantages

of this new technology, this thesis will give insight on why companies should consider

investigating this new technology to stay on top of their game. Additionally a down to

earth example of a simple company that adapts to the Cloud will clarify how this solu-

tion can change the way a business person operates and thinks about their business.

Finally the conclusions will show if the Cloud is going to stay or if it is going to be suc-

ceeded by something else?

Figure 1: From the Briefcase to the Cloud (Own Design cf. http://www.gutewerbung.net/wp-content/uploads/2013/04/Don1.jpg, 2013)

1 (Hurwitz, Bloor, & Kaufman, 2010)

Defining the Cloud 3

2 Defining the Cloud

A lot of people are talking about the Cloud, but for most it is a really weird concept, that

they have not grasped or understood yet. To make it easier to understand this topic to

its fullest extent, it is fundamental to know the origin of the technologies and steps that

were needed for the Cloud to become what it is today. Matt Mansfield is a recognized

expert in online business, president of Matt About Business, LLC and has devoted

most his life to working in the Cloud.2 He is a published author and has been featured

on sites such as the American Express OPEN Forum, the SCORE Small Business

Blog and Pitney Bowes’ pbSmart™ Essentials blog as well as many others. His blog

covers small businesses topics and helps entrepreneurs understand the power of tak-

ing their business online.3 On his YouTube Channel he explains how the internet de-

veloped from different kinds of networks into what it is today.4

2.1 History of the Cloud

The Flowchart “The History of the Cloud”, as shown in Figure 3 illustrates the following

passage and gives a step by step overview of the development of the Cloud. The

Name Cloud Computing was inspired by the cloud symbol that is often used to repre-

sent the Internet in flowcharts and diagrams.5

Back in the 80’s in the early ages of computers, if

two employees wanted to share something from

their computers with each other, they had to put the

information on a floppy disk (see Figure 2) and

walk it over to the person sitting across the office.

That wasn’t very convenient, so IT came up with

the Local Area Network (LAN) (Figure 3 #1). This

kind of network connected all the computers within

an office through servers and data bases (Figure 3

2 (Mansfield, http://www.youtube.com/, 2011)

3 (Mansfield, http://www.mattaboutbusiness.com/about, 2013)

4 (Youtube.com, 2013)

5 (Rouse, http://searchcloudstorage.techtarget.com/definition/, 2010)

Figure 2: Floppy Disk (Microsoft, 2013)


#2), where information was stored and of which reports could be run of. Through this

people were able to share information with each other much faster and easier.

Figure 3: A History of The Cloud (Own Design cf. Matt Mansfield, http://www.youtube.com/watch?v=9LVWnS_Cz4M&list=WLB4449357EB4C58CF, 2013)

Soon this raised another issue. In the situation when a company had more than one

location e.g. one in San Francisco and the other in New York (Figure 3 #3), with anoth-

er server and data base and these two offices wanted to look at each other’s data ba-

ses it was not possible. Therefore the Wide Area Network (WAN) (Figure 3 #4) was

created. These networks were connected by lines provided by the telephone and cable

companies and they are the same lines the internet runs over today (Figure 3 #5).

Since this technology working behind the WAN is unknown to most, IT people drew a

cloud in the middle of two networks (Figure 3 #6). It was just important to know that the

data was delivered correctly from one location to another. An employee sent his infor-

mation “out there” and the Cloud was making sure, that no matter what it made it to its

destination. The guaranty that the information makes it back and forth correctly was

called routing (Figure 3 #7). Thus the Cloud is really just a part of technology that

makes sure that we have enough space to send each other information and also to

route information back and forth.

Often people talk about storing data and doing things in the Cloud, like using software.

That is a sort of subset of the Cloud. Before Cloud services each company had soft-


ware that ran on all the computers and servers (Figure 3 #2). It cost money and time to

keep that software up to date and everything up and running. Eventually vendors had

the idea of putting up servers, with data bases and connecting them to the Cloud

(Figure 3 #8). For a small monthly fee other companies could get through and store

their data on the vendor’s server and use the data base (Figure 3 #9). This was a revo-

lutionary idea, since it meant that a company didn’t need their own server or data base

anymore (Figure 3 #10). It just used the one provided by the vendor, saving the com-

pany money on updates, maintenance and electricity.

Another thing that vendors started doing was putting up servers with data bases that

actually had software on it (Figure 3 #11). These servers could run all kinds of software

e.g. accounting software, project management software, collaboration software etc.

These companies are called Software as a Service (SaaS) vendors. Again for a month-

ly fee they would provide a company access to their servers and data bases as well as

its functionality. This meant a company did not have to have all of this software in-

stalled on their servers or computers. Also every time the software was updated or new

functionalities were added, the vendor handled it. Upgrades did not longer have to be

installed manually on every single computer in a company. Thus Software as a Service

became functionality out in the Cloud. The storage you got from a vendor was called

Infrastructure as a Service or short IaaS (Figure 3 #8). This vendor basically gave you

a building to put all your data in, except that building was electronic. Essentially the

Cloud is the pipes and the routing so the information gets back and forth, provided to

you by phone and cable companies and really the internet and when people talk about

what they are doing out on the web, they are referring to Software as a Service.6

Defining the Cloud can be a difficult task, because everyone you ask will tell you some-

thing different. CIOs will emphasize the business benefits, whereas CTOs will talk

about the technical possibilities and common users will name the Cloud providers they

are using. Each of these viewpoints is valuable in creating a cohesive picture and has

to be considered to define the Cloud clearly. Let us take a closer look at the terminolo-

gy. The initial situation is that the word is being used in a very loosely and unspecific

way which causes confusion when talking about this subject. When people talk about

the Cloud they usually mean they are using applications that are hosted on it. Cloud is

an extensive and generic expression like “government”, which is made up of many dif-

6 (Mansfield, http://www.youtube.com/, 2011)


ferent people, departments and organizations. Another analogy would be “religion”,

which includes all of the different gods, cults and communities in the world7. Same can

be said about the Cloud which also is made up of many different layers and compo-

nents. Matt Mansfield even says that “the Cloud can’t be defined in a single statement

and that it is a bundle of definitions.”8 Furthermore a dynamic topic like this is shaped

not only by the major companies that offer these services and their brands, but also by

industry thought leaders and technology experts. The best resource for researching

this new and dynamic topic is the Internet, of course. Printed literature carries some

fundamental definitions and explanations, but can’t compete with the constantly chang-

ing flow of information on the Internet.

2.2 Definitions on the Internet

There are thousands of definitions of the Cloud. The following four definitions seem to

capture the core elements effectively. Wikipedia, the free, web-based encyclopedia

says:

“Cloud computing is the use of computing resources (hardware and software) which

are available in a remote location and accessible over a network (typically the Internet).

The name comes from the common use of a cloud-shaped symbol as an abstraction

for the complex infrastructure it contains in system diagrams. Cloud computing entrusts

remote services with a user's data, software and computation.”9

Cloud Distribution, a firm in the United Kingdom that specializes in distributing next

generation security and networking solutions defines Cloud computing as:

“The convergence of three major trends: Virtualization, where applications are

separated from infrastructure. Utility computing where server capacity is accessed

across a grid as a variably price shared service. Software as a service is where

applications are available on demand on a subscription basis.”10

7 (Mansfield, Thoughts on the Cloud, 2013)


9 (Wikipedia.org, 2013)

10 (Cloud Distribution, 2010)


Baker Security & Networks are a premier provider of Information Security Solutions,

Cloud Computing and Managed Network Services and declare that:

“It is a simpler and more sufficient way of buying and using technology. […] Cloud

computing is another way of saying the services you need are delivered through the

internet”11

The online magazine, PCmag.com provides an encyclopedia for technical expressions

and terms. The definition found there states that the Cloud consists of:

„Hardware and software services from a provider on the Internet (the "Cloud"). Cloud

computing comprises "software as a service" (SaaS), "infrastructure as a service"

(IaaS) and "platform as a service" (PaaS)[...].“12

2.3 Definitions by providers and thought leaders

Judith Hurwitz is a technology strategist and thought leader. She is the president of

Hurwitz & Associates, a business technology strategy firm that helps companies gain

business benefits from their technology investments. Robin Bloor, a partner with the

same company, has been an IT consultant and technology analyst for almost 20 years.

Marcia Kaufman, a founding partner of Hurwitz & Associates, has 20 years of experi-

ence in business strategy, industry research, Service Oriented Architecture (SOA), and

information management.13 They are the authors of “Cloud Computing for Dummies” a

book that covers many basic topics on Cloud Computing. They say the Cloud “is the

next step in the evolution of the Internet.”14 This statement is backed up by many other

white papers and introductions to the Cloud. It is important to keep in mind that major

players like Amazon and salesforce.com have a strong influence on the market and

therefore on the definition of the Cloud. They, too have to explain their solutions to cus-

tomers starting with a Cloud definition. In “Intel’s Vision of the Ongoing Shift to Cloud

Computing” it is described as: “rather than a revolution, cloud computing is an im-

portant transition, a paradigm shift in IT delivery” and furthermore that it “offers the po-

11 (Networks, 2011)

12 (PCMag.com, 2013)




tential for a transformation in the design, development, and deployment of next-

generation technologies.”15 IBM has a slightly different view and says that “Cloud com-

puting is a flexible and cost-effective delivery platform for providing IT services over the

Internet.”16 Amazon Web Services adds that “with cloud computing, organizations can

consume shared computing and storage resources rather than building, operating, and

improving infrastructure on their own.”17

Gartner, Inc. (NYSE: IT) is the world's leading information technology research and

advisory company. They deliver the technology-related insight necessary for their cli-

ents to make the right decisions.18 Their official definition of cloud computing is that is

“a style of computing where scalable and elastic IT-enabled capabilities are delivered

as a service to customers using Internet technologies.” They also describe five defining

attributes of cloud computing: service-based, scalable and elastic, shared, metered by

use and uses Internet technologies. A key to Cloud computing is a blurred boundary

between the customer and the provider. Graphically, that looks like this:19

Figure 4: Gartner’s Properties for Providers and Customers (Own Design, see Footnote 19)

The Cloud represents the Internet, or more specifically a way of looking at application

development and deployment from a network point of view. This means the applica-

15 (Intel, 2010)

16 (Duijvestijn, et al., 2010)

17 (Varia & Mathew, 2013)

18 (Gartner, 2013)

19 (Bittman, 2009)


tions use the Internet as an “operating system”. To enable such an environment takes

a new way of thinking about the underlying infrastructure. This infrastructure is unified

through Application Programming Interfaces (APIs), distributed on a global level

and fault tolerant as well as scalable and elastic.20 Marc Benioff has a unique way of

looking at the definition of Cloud that is not to be underestimated.

“He is chairman and CEO of salesforce.com. He founded the company in 1999 with a

vision to create an on-demand information management service that would replace

traditional enterprise software technology. Benioff is now regarded as one of the

pioneers of cloud computing and has been instrumental in driving businesses to

transform by embracing social and mobile cloud technologies to connect with

customers, partners and employees in new ways.”21

In an interview he shares his thoughts about the Cloud and moreover how it plays into

the future of communication. For him the Cloud is just one part of four major trends that

are changing our world.

a. Consumerization of IT means that the consumer model has changed and every-

body today is using user-optimized computers and devices to access technology.

b. Cloud computing is the third wave of computing moving and storing your data to a

network of billions of computers that the consumer controls via any device. It is be-

coming a mainstream capability and it is altering the way companies are operating.

c. Mobile has now surpassed web-based browsing as the dominant way to get infor-

mation. This trend also includes all the Applications that are being designed for

these mobile devices.

d. Social platforms are the number one reason for being online and just being on the

Internet has become secondary.

2.4 Definition by the National Institute of Standards

and Technology

Last but not least it is important to define the Cloud by a standardized method to en-

sure that there is a common ground for this technology. “The NIST is a non-regulatory

20 (Cohen, 2010)

21 (Salesforce.com, 2013)


federal agency within the U.S. Department of Commerce. NIST's mission is to promote

U.S. innovation and industrial competitiveness by advancing measurement science,

standards, and technology in ways that enhance economic security and improve our

quality of life.”22 It is a very important organization for utility companies in the U.S. for

industry standards and regulations. This agency has also published a paper on Cloud

computing and defined five essential characteristics as follows:

On-Demand Self-Service. A consumer can unilaterally provision computing capabili-

ties, such as server time and network storage, as needed automatically without requir-

ing human interaction with each service provider.

Broad Network Access. Capabilities are available over the network and accessed

through standard mechanisms that promote use by heterogeneous thin or thick client

platforms (e.g., mobile phones, tablets, laptops, and workstations).

Resource Pooling. The provider’s computing resources are pooled to serve multiple

consumers using a multi-tenant model, with different physical and virtual resources

dynamically assigned and reassigned according to consumer demand. There is a

sense of location independence in that the customer generally has no control or

knowledge over the exact location of the provided resources but may be able to specify

location at a higher level of abstraction (e.g., country, state, or datacenter). Examples

of resources include storage, processing, memory, and network bandwidth.

Rapid Elasticity. Capabilities can be elastically provisioned and released, in some

cases automatically, to scale rapidly outward and inward commensurate with demand.

To the consumer, the capabilities available for provisioning often appear to be unlimited

and can be appropriated in any quantity at any time.

Measured Service. Cloud systems automatically control and optimize resource use by

leveraging a metering capability1 at some level of abstraction appropriate to the type of

service (e.g., storage, processing, bandwidth, and active user accounts). Resource

usage can be monitored, controlled, and reported, providing transparency for both the

provider and consumer of the utilized service.23

22 (NIST, 2013)

23 (Mell & Grance, 2011)


2.5 Summary of definitions

It is clear that the Cloud is a catch-all for many things and it is true that it cannot be

defined in a single statement. For the author there is a lot that plays into shaping the

Cloud. These requirements are equally important and cannot exist without each other.

They support and depend on each other in order to form the Cloud. First, the Cloud is

an evolutionary step within the Internet, a paradigm shift in IT design, delivery and de-

ployment. The second requirement is that alongside with Consumerization, Mobile and

Social, it plays a major role in changing how we interact with technology. Thirdly, hard-

ware, software and data are no longer hosted on-premise, but outsourced to a vendor

which provides the platforms, apps and storage. These are accessed over a network,

commonly the Internet, through devices such as desktops, laptops; tablets or smart

phones (see Figure 5). And finally it is standardized by five characteristics provided by

NIST: On-demand self-service, broad network access, resource pooling, rapid elastici-

ty, measured service.

Figure 5: Cloud Enabled Devices (Icciev.com, 2013)

Technologies and Terminology 12

3 Technologies and Terminology

This chapter is designed to take a look inside the Cloud and the features that make it

so different from any other technology advancement to date. The Cloud is often re-

ferred to as: Utility Computing, Software as a service (SaaS) or Platform as a Service

(PaaS). Understanding different service models, their attributes as well as the expres-

sions are crucial to really get inside the Cloud.

Cloud Services are used by many of us on a daily basis without us even knowing. It

refers to the actual service that a common user or business is consuming. The most

common examples for a home user are web-based email services such as Gmail,

Hotmail or Yahoo. A businesses’ software developer can use the service of the Google

Apps Engine to develop new applications in a Cloud environment.

Utility Computing is only another expression for the idea behind Cloud Services. Just

like using electricity or water it should be just as easy for businesses to use computing

power on-demand. An Internet connected device should be all an individual needs to

access professionally managed infrastructure, storage and applications.

Cloud Computing refers to the underlying infrastructure, the actual hardware and their

connection to the Internet that makes it possible to scale services exponentially and

flex resources rapidly in response to variable supply and demand.24

Software Applications, Applications or Apps are used as a term contrary to system

software e.g. Windows, Mac Operating System or Linux. […] “The difference between

software and application is very much like the difference between a rectangle (soft-

ware) and a square (application); all applications are software, but not all software are

applications.”25“Both System software and application software interacts with the com-

puter hardware. However, the system software operates the computer’s hardware and

provides a platform for running the application software. The application software on

the other hand helps the user to perform single or multiple tasks.”26 Examples include

enterprise and accounting software, office suites, graphics, and media players. Many


25 (Differncebetween.com, 2013)

26 (Reference.com, 2013)


application programs deal principally with documents. Creating software for a Cloud

environment means that applications can be designed and deployed faster. Oftentimes,

this is a company’s main objective.

Clients

In the real world, businesses have clients. In the computer world, servers have clients.

The "client-server" architecture is common in both local and wide area networks. For

example, if an office has a server that stores the company's database on it, the other

computers in the office that can access the database are "clients" of the server. On a

larger scale, when you access your e-mail from a mail server on the Internet, your

computer acts as the client that connects to the mail server. The term "client software"

is used to refer to the software that acts as the interface between the client computer

and the server. For example, if you use Microsoft Outlook to check your e-mail, Outlook

is your "e-mail client software" that allows you to send and receive messages from the

server.27

Cloud Clients are all devices such as desktop computers, laptops, tablets and smart

phones that are connected to a network (mostly the Internet) and can therefore be

used to access Cloud Services. The user “talks” to his or her devices through the

commands, menus and buttons on the User Interface (see Figure 6).

Figure 6: Client Interactions (Own Deisgn cf. http://www.pcmag.com/encyclopedia/term/37856/api)

27 (Techterms.com, 2013)


Application Program(ming) Interface or API is simply the “language” in which the

application “talks” to the operating system (OS). The API allows programmers to use

predefined functions to interact with the operating system, instead of writing them from

scratch. All computer operating systems, such as Windows and the Mac OS, provide

an application program interface for programmers. While the API makes the program-

mer's job easier, it also benefits the end user, since it ensures all programs using the

same API will have a similar user interface. This makes it easier for users to learn new

programs.28

As the “language” between an operation system and an application, APIs also play a

major role in Cloud computing. The Cloud connects many different systems, platforms

and therefore many languages. The current challenge is to realize “cross-cloud com-

patibility“29 so cloud environments can seamlessly communicate and function with each

other (see Figure 7). This is not yet the case since major Cloud players like AWS,

VMware and Google are trying to force their “API language” and also their intellectual

property as a standard onto the market.30

Figure 7: Rackspace API Advertisement (http://javascriptweekly.com/archive/136.html, 2013)


29 (Kleyman, 2012)

30 (Linthicum, 2012)


Multi-Tenancy is an architecture in which a large pool of users (or tenants) share the

same underlying resources such as applications and/or computer resources, even

though they only have access to their own data. Customizing the app is often limited to

the color of the user interface or business rules, but the actual application code cannot

be changed or customized. Offering a single solution to multiple businesses spreads

the costs of software development and maintenance over thousands of customers.

Therefore Cloud Services can achieve high cost efficiencies and deliver low costs. This

is one of the reason that Cloud computing is becoming more and more popular with

businesses.

Virtualization is one of the centerpieces of the paradigm shift in IT and also in the

Cloud. It is a technology that imitates computer hardware in software. Therefore more

“imitated computers” can run on a single physical server (see Figure 8). For a long time

each application vendor wanted an isolated server dedicated to its application or task,

to minimize interference with other programs. For each new app another server was

put up, that was only using 5 –15%31 of its capacity.32 This is known as server sprawl.

Virtualization changes that, by encapsulating each operating system and the software

and turning it into a virtual machine (VM). A virtualization layer presents a generic

hardware to each virtual machine, which means that a server is no longer limited to one

operating system. All the virtual machines can run side by side, each using a piece of

the computing resources. This also means that backups, storage and migration are

drastically simplified, because these encapsulated VMs are no longer bound to any

hardware, but only the virtual layer. The bottom line is that a business’ return on in-

vestment is greater, because it has to buy fewer physical servers to run its applications.

The company VMware (NYSE:VMW) currently has the lion share of the market and is

“[…] the global leader in virtualization and cloud infrastructure […]”. With more than

500,000 customers and 55,000 partners, VMware solutions help organizations of all

sizes lower costs, increase business agility and ensure freedom of choice.33

31 (Vizioncore, 2010)

32 (VMware, 2013)

33 (VMware, 2013)


Figure 8: Virtualization (Own Design, 2013)

Automation is just the starting point of taking full advantage of Cloud computing. It is

“smart software” that takes human repeatable tasks and puts them into an automated,

static workflow (automated task). Procedures that are carried out “electronically without

requiring human intervention”34 are more efficient and less expensive. This improve-

ment frees IT staff to actually devote their time to overlook and manage the deployment

of applications and projects. Automation can also stand alone and be used to simplify

single repetitive and repeatable tasks, but it plays a more important role as the founda-

tion for IT Orchestration.35

Orchestration metaphorically speaking is the “glue” that puts together automated

tasks into a sensible order. The key is to execute many tasks as quickly as possible

and if possible even at the same time. This is only doable if the task that is occurring

does not depend on the outcome of another task. For example you had multiple arms

to get ready in the morning. You could shower, wash your hair, brush your teeth and

shave at the same time, but the task of drying off could only happen after all that. The

goal is squeezing down as many tasks down vertically↨ to get more things done the

same time, horizontally↔. 36

34 (Rouse, http://searchcloudprovider.techtarget.com/definition/, 2011)

35 (Stephenson & Sawyer, 2012)

36 (Stephenson & Sawyer, 2012)


Furthermore, Cloud orchestration is the “magic word” that makes Cloud computing ac-

tually useful and delivers true value to a business. Many different, automated workflows

are strung together, i.e., orchestrated, into a value chain that delivers a business bene-

fit.37 Orchestration software brings both traditional hardware and virtualized servers

together to instantly manage, automate and streamline the entire capacity and server

requirements.38 In a Cloud environment interconnecting processes run across hetero-

geneous systems in multiple locations. Processes and transactions have to cross mul-

tiple organizations, systems and firewalls.39 In essence, the ultimate goal is delivering

services faster.

Scalability is the ability of hardware or applications to meet growing workloads and

meet business needs. This capability allows computer equipment and software pro-

grams to grow over time, rather than needing to be replaced.40 In other words servers,

storage, networking bandwidth and apps can be “expanded” or “upgraded”. Scalability

means planning resources within a business, e.g., an application provider, and the

gradual process of budgeting/anticipating, buying and expanding IT infrastructure. On

the application side it means that the apps need to be designed to adapt to support an

increasing amount of data or a growing number of users.41 For example, if you’re a

business leader and you have 500 users who will be using a particular set of software

applications that you want to put in the Cloud, you know that you will need to have a

specific level of capacity if all 500 users are logged on at the same time.42

Elasticity means that a user can have as much or as little of a service as they want at

any given time; and the service is fully managed by the provider.43 It does not neces-

sarily focus on how many users can be supported, but how fast and sufficient can a

platform adapt to support them in real-time. Speed and performance are the key. How

fast can a company provision a new virtual machine, how well does that VM perform

once deployed, and how much will it cost the company are what matters most.44 Elas-

37 (Williamson, 2012)

38 (Flexiant, 2013)

39 (Rousse M. , 2012)



42 (Guy Fardone, 2012)


44 (Cohen, 2010)


ticity is strongly related to applications that run on the Cloud. That means a company’s

platform on which the app is running needs to be able to handle sudden, unexpected

and massive workloads. This could be because of a viral marketing video or breaking

news that makes users visit a website or use an app. A Super Bowl Ad Campaign

draws thousands of users to a single website and still has to perform perfectly for each

visitor, e.g., Coca Cola’s “Coke Chase 2013” (see Figure 9).

Figure 9: Coke Chase Advertisement 2013 (Adweek.com, 2013)


In essence, Scalability has a great meaning within a company and is needed to guar-

antee steady growth, whereas Elasticity is more linked to satisfying users needs as

they occur. Scalability is much more specific and gradual than Elasticity, and it is very

controlled by the company and its cloud services provider in conjunction with its IT de-

partment.45 In relation to the Cloud these terms should be used very carefully and nev-

er be interchanged.

As shown above there is way more technology to the Cloud that meets the eye. All

these ideas and terms combined give the Cloud its power.

45 (Guy Fardone, 2012)

Cloud Service Components 20

4 Cloud Service Components

4.1 Cloud Service Models

Cloud Services are generally divided into three categories: Infrastructure as a Service

(IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). These three

layers are built on each other and enable hardware and software to be delivered as a

service (see Figure 10). Cloud providers will use the term Cloud generically, no matter

what service layer they are offering. In practice Cloud suppliers often provide additional

services to a layer and so the lines between all three services become blurry.46

4.1.1 Infrastructure as a Service (IaaS)

Infrastructure as a Service is the lowest of all three layers and provides the physical

environment, the “hardware building blocks” of computers. It delivers abstracted com-

pute components such as servers, networking, storage, and data center space for a

46 (Czarnecki, 2012)

Figure 10: Cloud Model Examples (Own Design cf. http://www.jansipke.nl/top-cloud-computing-providers/, 2013)


compute foundation. It may also include the delivery of operating systems and virtual-

ization technology to manage these resources.47 Infrastructure as a Service offers the

highest level of customization because IaaS customers are only purchasing virtual ma-

chines that are connected to the underlying hardware. This means they can run any

kind of operating system and/or application they want on top of it and they have access

to as many or little physical hardware on demand. To ensure that these resources are

available all the time most contracts between a Cloud provider and a customer will in-

volve a service level agreement (SLA). This contract may include specifications about:

Percentage of the time services will be available

Number of users that can be served simultaneously

Schedule for notification in advance of network changes that may affect users

Help desk response time for various classes of problems

Dial-in access availability

Usage statistics that will be provided48

The most common example for IaaS is Amazon’s Elastic Compute Cloud or generally

known as EC2. It provides virtual machine resources that are scalable through a Web

services interface and paid for by the hour.49 Amazon's additional services include

Simple Storage Service (S3), a cloud storage service for backup and content down-

loads, Simple Queue Service (SQS) for message store and forwarding and CloudFront,

a comprehensive content delivery network with datacenters around the world.50

4.1.2 Platform as a Service (PaaS)

Platform as a Service is the middle layer and provides more than just infrastructure. It

includes the hardware, operating system, database and other necessary software for

the execution of applications.51 PaaS vendors offer a variety of software and product

development tools, which are used by developers to create, test, distribute and man-

age applications in the Cloud. PaaS can be seen as the middleman between IaaS and

SaaS. Firstly, it has to be able to dynamically communicate with the infrastructure and


48 (Rousse M. , 2008)





request the resources needed. This happens through the Application Programming

Interfaces (APIs) mentioned above. Its next purpose is to interact with the application

level (SaaS) and provide applications with the recourses they need, depending on their

load.

This level can be seen as the laboratory in which developers create new applications

specifically for the Cloud. It is important to keep in mind those different operating sys-

tems have different languages and the apps have to be written in that language. De-

velopers will make their decision on which platform to choose based on:

Their company’s native programming language

Compatible with other Cloud solutions, so they have the possibility to change pro-

viders and have portability

If the language is an open source or a closed source

Examples for Platform as a Service include Google App Engine, Force.com and Win-

dows Azure.

4.1.3 Software as a Service (SaaS)

Software as a Service is basically the icing on the

cake (see Figure 11) and it provides fully serviced

software running on fully serviced infrastructure. It is

accessed over the Internet, so that the software no

longer has to be installed on a C-drive. The SaaS

provider is responsible for developing the software as

well as the configurations, back-ups, bug fixes and

hosting. The software is accessed through a browser

and needs little to no setup. Users can get engaged

with the software just through signing up (self-service)

and it is instantly delivered on demand. Depending on

the target group the software is free, upgradable to a

premium version for a subscription fee or the applica-

tion is paid for by advertisement.

There are SaaS solutions for common users and also

for businesses. Business services are available for

example for Payroll (ADP), ERP (WebEx), CRM (Salesforce.com) or document man-

agement systems. Personal usage includes email systems (Gmail), picture sharing

(Picasa, Flickr), video sharing (YouTube) and Social Networks like Facebook, Twitter

and LinkedIn. In a Cloud environment many applications do not stand alone but are

Figure 11: The Three Layers of Cloud Computing (Own Design, 2013)


connected to each other. Social media has been one of the major reasons for users

wanting their application to be interconnected.52 This connection enables a level of cus-

tomization for their needs and personalizes the service. The perfect example for this is

a Facebook site. Recognizing your likes, shared linked etc. it will create suggestions

what a user might also like. Your recent visit to Amazon to shop for shoes will be used

to personalize your advertisements.

Table 1: Cloud Services Compared53

53

http://technet.microsoft.com/en-us/magazine/hh509051.aspx

Type Consumer Service

Provider

Service Level

Coverage

Customization

SaaS End user Finished

application

Application uptime

Application per-

formance

Minimal to no

customization

Capabilities dic-

tated by market

or provider

PaaS Application owner Runtime envi-

ronment for ap-

plication code

Cloud storage

Other Cloud

services such

as integration

Environment

availability

Environment per-

formance

No application

coverage

High degree of

customization

available within

constrains of the

service offered

Many applica-

tions will need to

be rewritten

IaaS Application own-

er or IT provider

OS

Middleware and

application

Virtual server

Cloud storage

Virtual server

availability

Time to provision

No platform or

application cover-

age

Minimal con-

straints on appli-

cations installed

on standardized

virtual OS builds


4.2 Cloud Deployment Models

There are three different, basic ways in how the Cloud is delivered. A Public Cloud can

be accessed by anyone who signs up for it, whereas a Private Cloud can only be ac-

cessed through proprietary network.54 Also there is a so called Hybrid Cloud that com-

bines features of the Private and Public Cloud.55 All three differ from each other in the

way where the infrastructure is located, who is providing the service, who can access

the service and how the service is paid for (see Figure 12). Each model has different

features that may appeal to some but not to others. These aspects are important to

bear in mind, when analyzing the pros and cons of each solution.

Figure 12: Cloud Service Model‘s Access, Control, Location and Cost (Own Design cf. http://technet.microsoft.com/en-us/magazine/hh509051.aspx, 2013)


55 (Oracle Cloud Computing White Paper, 2010)


4.2.1 Public Cloud

Within Public Cloud computing (see Figure 12 and Figure 13) resources are shared

among multiple tenants (see Multi-Tenancy). The physical infrastructure is hosted and

managed at service providers’ site. Computing, storage and applications are available

to every individual, company or organization that signs up for this service. Nevertheless

each organization’s data and application usage is logically segregated so only author-

ized users are allowed access.56 Sharing computing resources generates the types of

economies of scale that can be used to reduce costs.57 However the consumer has no

control or visibility over where the Cloud services are being hosted.

For common users and small and medium size businesses the Private Cloud can be

the perfect start to get into Cloud computing. There are several advantages to this

model that especially appeal to businesses with low capital. The overarching benefits

are simplicity and efficiency, because the service is accessed via the Internet and de-

livered by a Cloud provider. Not having to purchase, install and configure physical

hardware58, results in low upfront costs and a fast set-up. A company also benefits from

the Cloud providers’ economics of scale, saving on energy costs (e.g. cooling systems)

and fewer IT staff. Also the company only pays for what it needs which also adds to

reducing costs. A Public Cloud solution may also help save time dealing with IT prob-

lems. The technology behind the Cloud (e.g. virtualization and automation) reduces

server downtime and speeds up configurations. Moreover maintenance of the physical

hardware is not required. The last advantage is that a company is not bound by long-

time contracts. After a monthly or yearly subscription there is no obligation to continue

the service.59

Of course there are also some downsides to this model as well. One of the main disad-

vantages is the perceived weaker security. Even though most Public Cloud providers

have excellent security, entrusting sensitive personal information with a third-party is a

liability. Additionally there is a lack of control over where exactly the data is stored. The

fact that the service is delivered over the Internet means that the company might suffer

from slow speed. This depends on the connection it has set up with their Internet pro-

56 (Aerohive Networks Inc., 2013)

57 (Gartner IT Glossary, 2013)

58 (Oracle Cloud Computing White Paper, 2010)



vider and the performance of the Cloud providers’ data center. The last disadvantage

might be the lack of investment. Renting the service from a Cloud provider is a great

method to save on upfront investments, but it also means that there is only little capital

gained. Having items residing in-house such as servers and network equipment can

pay off in the long run as assets and tax advantages.60 Overall using a Public Cloud

means having faith and trust in the Cloud providers’ expertise and professionalism, as

you would in your own IT staff.

Figure 13: Cloud Service‘s Access, Control and Ownership (Own Design cf. http://blogs.gartner.com/thomas_bittman/2009/04/08/the-spectrum-of-private-to-public-cloud-services/,

2013)

4.2.2 Private Cloud

Generally resources are dedicated strictly to one business and accessed by only a lim-

ited amount of people behind a firewall (see Figure 13).61 A Private Cloud or Enterprise

Cloud may be managed by the organization or a third party and may exist on premise

or off premise.62 A Private Cloud has two scenarios, hosted and in-house.

A hosted Private Clouds’ infrastructure is set up, operated and managed at the provid-

er’s site (see Figure 14). In this case, consumers merely have access to a dedicated

part of the Cloud through a Virtual Private Network (VPN), but have no control over the

physical infrastructure. When a customer chooses to use Public Cloud resources to

create their Private Cloud, the result is called a Virtual Private Cloud.63 (see Figure 14)


61 (Rouse, http://searchcloudprovider.techtarget.com/definition/, 2011)

62 (Loeffler, 2013)



An in-house Private Clouds’ infrastructure is set up at the company’s location and op-

erated and managed by a provider.64 In this case the company is its own provider and

consumer. It also has full control over the physical servers and infrastructure (also see

Figure 15). The requirement for this to work is that a company must have an existing

data center to build a Cloud computing environment and take advantage of its technol-

ogies, such as virtualization and automation. Alternatively it has to build a completely

new in-house data center. Obviously both cases also require an upfront investment.65

Ideally, a Private Cloud allows businesses significant cost savings over legacy hard-

ware-based deployments. It also enables far greater flexibility, and – in contrast to a

public cloud – much greater security and privacy.66 Concluding Private Cloud compu-

ting can at first seem to contradict the overall definition of the Cloud, but really it is just

the name for the “Next Generation Data Center” (Figure 14).

Figure 14: In-House Data Center (Own Design cf. http://www.datamation.com/cloud-computing/what-is-private-cloud.html, 2013)

4.2.3 Community Cloud

This model of Cloud computing is sort of a subset of a Private Cloud (see Figure 12). A

Community Clouds’ infrastructure is shared by a group of companies with same

65

(Maquire, 2013) 66

(Maquire, 2013)


concerns, e.g., compliance, governance and policies. This might be several credit

institutes using the same Cloud infrastructure. It may also serve a company with

several divisions that do different things e.g. finances, marketing and consulting. It can

be seen as a gated community in which the participating organizations are benefiting

from multi-tenancy and pay-as-you-go billing, while having more privacy, security and

policy compliance. The Community Cloud can be either on-premises or off-premises,

and can be governed by the participating organizations or by a third-party service

provider.67

Motivations to go with a Private Cloud solution are various. An obvious choice is when

a companies business is its data and applications. Another reason could be that

company is part of an industry that has to be in compliance with strict security and

privacy policies, e.g., hospitals. A company also could be big enough to run a Next

Generation Cloud Data Center efficiently and effectively on their own. Last but not least

a Private Cloud might be the only option a business has because of geographical

reasons. In some countries the data residing in a Public Cloud also has to be in the

local country where the users are.68 The first main advantage for a Public Cloud is the

level of control it can offer. If a company chooses an in-house solution, the hardware is

monitored and maintained on-site, giving a complete oversight of the data.69 Being in

control also means that a company can ensure its own level of data security. In

addition a Private Cloud can provide higher performance, because it is deployed inside

the firewall on an organization's intranet, meaning that transfer rates are dramatically

increased versus using the Internet. 70 Finally, a company can customize their

hardware and software to what ever level needed.

Naturally there are downsides to this solution as well. The first one being that Private

Cloud services are in general more expensive than public ones because they require

both hardware and maintenance personnel.71 As mentioned above, building a new data

center or using legacy hardware to Cloud compute can cause high up-front

investments and admistration costs. Additional costs originate from providing the

adequate power, cooling and general maintanance. The host organization also runs the







risk of data loss due to physical damage of the unit, i.e., fire, power surge, water

damage.72 The most significant critique of a Private Cloud might be that is not truly

“infinite” like the Public Cloud. There will always be a capacity ceiling, because of “the

limitaions of the physical hardware.”73 If a company wants to expand their Cloud it will

have to purchase, install and configure more hardware to meet business requirements.

In a nutshell a company owns a Private Cloud and the benefits that go with it, but it

also pays extra for that privilege (see Table 2: Comparing Private and Public Cloud).

Table 2: Comparing Private and Public Cloud

Attribute Private Cloud Public Cloud

Simplicity More complicated Simple

Efficiency Lower Higher

Up-front cost High Low

Energy costs High Low

Economics of scale No Yes

Pay As You Go Model Yes Yes

Total costs High Low

Maintenance Yes No

Time savings No Yes

Availability High Lower

Scalability Limited Unlimited

Location of data center In-House Outsourced

Location of data In-House At Vendor’s Site

Security Very High High

Control over Hardware Yes No




Attribute Private Cloud Public Cloud

Customization Level High Low

Management High Lower

Limitations Yes No

Disaster recovery Maybe Yes

Figure 15: Complete Overview of Cloud Service Models (Own Design cf. http://technet.microsoft.com/en-us/magazine/hh509051.aspx, 2013)

4.2.4 Hybrid Cloud

The last Cloud model is meant to combine the benefits of Public Clouds, such as

scalability and cost-effectiveness with the security and control of Private Clouds. Also

called Hybrid IT.74 In this It environment a company provides and manages some re-

sources in-house and has others provided externally. This model offers an attractive

option for companies that have to be in compliance with their privacy policies, but also

74 (Rousse M. , http://searchcloudcomputing.techtarget.com/definition/, 2011)


Figure 16: Cloud Tool Box (http://ants.etse.urv.es/web/, 2013)

have to be flexible to handle sudden workloads. The overall goal is to manage different

parts of a business in the most efficient environment (appropriate infrastructure).

The Hybrid Cloud is the ideal way to effectively meet the needs of various parts of a

business.75 This means that modern businesses can choose where they want to store

different kinds of data. Mission-critical information, such as customer data and applica-

tions can be managed on-premise in a Private Cloud. On the other hand the Private

Cloud can be used as a tool to outsource less sensitive information or as a test envi-

ronment for new applications. As long as there is no intellectual property, or revenue

sources at risk and topics are being discussed, information can be handled on a Public

Cloud. Furthermore expanding or contracting workloads due to seasonal changes or

marketing campaigns can be handled easier. Capacity for certain projects can be add-

ed or removed just as quickly. In this case, moving virtual machines from a private

cloud to a public cloud to accommodate increased traffic referred to as Cloud-

bursting.76 Moving data from one Cloud into another creates several issues such as

integrating internal and external infrastructures and providing common interfaces

across applications. Moving data can also create issues around security, latency and

geography, meaning where the data is stored.

In spite of all the technical difficulties and opera-

tional challenges there is another approach to the

Hybrid Cloud. As mentioned in the section, “De-

fining the Cloud,” Judith Hurwitz is president and

CEO of Hurwitz & Associates, Inc., a strategy

consulting and research firm focused on distribut-

ed computing technologies. She is a pioneer in

anticipating technology innovation and adoption,

such as the emerging market for cloud computing

and is also the author of “Cloud Computing for

Dummies”.77 In an interview she says that Cloud approaches “won’t be black or white,

but a combination of these”78 described as the Hybrid Cloud above. In the end it might

not be about moving things around from a Private to a Public Cloud, but having multiple

75 (Apexcloud, 2012)


77 (Hurwitz.com, 2013)



resources that cater to a business need. It is having a Cloud Dashboard or Cloud Tool-

set (see Figure 16) from which to choose the right feature or property. Companies will

have to think about the different Cloud resources from a global, cost, geography or

application type perspective. The undeniable downside to this is that a company has to

keep track of the different environments, which makes Cloud management more com-

plex.

Comparison

Figure 17: Enterprises and Clouds (Own Design cf. http://rob-livingstone.com/2013/04/public-private-community-and-hybrid-cloud-explained/, 2013)

Challenges 33

5 Challenges

Up until now the chapters have described many benefits that Cloud technologies ena-

ble such as cost savings. This chapter is dedicated to challenges that business and

individuals equally face with this new approach to technology. More and more vendors

are offering Cloud solutions and so the main issue will be to distinguish between “real”

Cloud solutions and “fake” ones. Once again terminology is the key and also might

have to do with the success of the Cloud offering. Also Cloud computing is becoming

mainstream without many people even noticing it and especially individuals can be

vulnerable to falling into a Cloud trap. Businesses are not spared either and will have to

be careful not to buy into “cloud-washed” solutions. Ultimately it will all come down to

evaluating security issues and what is sustainable for each business and individual.

By now it is clear that the Cloud is clearly not a one-size-fits-all proposition.79 There are

Public Clouds and Private Clouds including all their offerings such as SaaS, PaaS and

IaaS. These variations have been made to accommodate a wide range of different us-

ers80, like businesses and individuals. There is no such thing as wrong or right, but it is

about choices that businesses and individuals have to make based on their needs. One

man’s joy can be another’s sorrow and what might be right for individuals, small and

medium size businesses, developers, or Web companies is not necessarily what suits

large enterprises and their applications. However the fact remains that the consumers

and businesses need a standard set of definitions from which to work.

5.1 Traditional Hosting versus Cloud Hosting

At first it might seem that hosting websites and business software “traditionally” and “in

the Cloud” is not so different from each other. Both options are off premise and ac-

cessed through the Internet. Most commonly the term hosting is used in connection to

websites, but in the terms of Cloud applications are much more important. As simple as

it might sound there are remarkable differences between both and how they affect

businesses.



Challenges 34

5.1.1 Traditional Hosting

There are two types of traditional hosting: shared and dedicated. In shared hosting, a

user or company shares a server with many other websites and customers. In dedicat-

ed hosting, a user or company owns a complete server to itself. It is essentially buying

a computer and having a hosting company manage it to ensure it stays up and running,

and connected at all times. Most small to medium scale websites use shared hosting,

because it is cost effective and requires low maintenance.81 Large scale websites use

dedicated servers as they need dedicated bandwidth and full control of the server. The

largest companies such as Amazon and Google use data centers that are essentially a

farm of dedicated servers. They use hundreds and thousands of dedicated servers

because of their bandwidth requirements.

Originally companies purchased remote IT infrastructure that was designed to handle

peak loads. It also had to have some extra space built in for unexpected spikes and

fault tolerance (n+1).82 The problem was that a company had to keep purchasing serv-

ers as the traffic of their website or usage of their applications grew. Normally busi-

nesses’ high loads only occur during business hours or on weekends and evenings.

Alternatively, peak loads may occur seasonally, monthly, annually, or be tied to a pro-

motion or special event.83 However every time the servers are not busy capacity is

wasted, but a company was still paying for them to be there. In addition to that there

are more drawbacks if a company was not using dedicated hosting. Sharing servers

(storage and bandwidth) with other websites meant that if traffic to other websites host-

ed on the same server went up, a companies’ site slowed down.

A general graph for the usage of a maximum of 12 servers (see Figure 18) shows how

little time of day, week or year the full capacity of the servers is used. The assumption

is that the infrastructure is powered by physical servers and the peak load is estimated

to consume 12 servers. Because these are physical servers, their quantity does not

change over time and consequently often sits underutilized compared to the load. This

model displays the inefficiency of traditional hosting, because there are large gaps

81 (Exelanz.com, 2012)

82 (Pankonin, 2013)

83 (Pankonin, 2013)

Challenges 35

where the demand on the application is far less than the bought-and-paid-for capacity,

so resources are basically wasted.84

Figure 18: Traditional Hosting Model (Own Design cf. http://blog.gogrid.com/2013/04/23/how-to-create-an-auto-scaling-web-application-on-gogrid-part-1-theory/, 2013)

5.1.2 Cloud Hosting

Cloud hosting is based on the technologies behind Cloud computing. It allows unlimited

virtual machines to run on multiple servers that are connected to each other, creating

one system. Automated systems keep providing servers to make sure that applications

and websites are running smoothly. This seamless scalability frees companies from

buying physical servers that are underutilized most of the time. Automation also makes

sure that all systems are always up to date. Mirroring information across several serv-

ers also makes it less likely to lose that information, if one server fails or crashes. Also

companies merely pay for whatever capacity their websites or applications are using or

they pay a monthly or yearly subscription fee. Cloud hosting gives companies the pos-

sibility to always make changes to their requirements, e.g., bandwidth and storage

space. In a Cloud environment the infrastructure can be fully utilized, because it scales

up or down to adapt to demand over time. As shown in Figure 19 it is generally possi-

84 (Pankonin, 2013)

Challenges 36

ble to scale from 3 to 15 servers as the work load increases and reduce servers once

business slows down again.

Figure 19: Cloud Hosting Model (Own Design cf. http://blog.gogrid.com/2013/04/23/how-to-create-an-auto-scaling-web-application-on-gogrid-part-1-theory/, 2013)

Table 3: HostingModels Compared85

Traditional Hosting Cloud Hosting

Flexibility and Optimization

Inflexible: Resources are static

and require downtime to complete

100% dedicated resources

No shared hardware

All available resources are inte-

grated, providing high shared re-

source availability

Extremely Flexible

Available resources include Band-

width, CPU usage, and Memory

Utilization

85 Content: http://www.cloudcow.com/content/royal-rumble-traditional-hosting-vs-vps-vs-cloud-hosting

Challenges 37

Traditional Hosting Cloud Hosting

Control, Customization and Security

Full control over software and

hardware components

Secured (depending on the type

of OS that the service is running

on)

The control panels vary depend-

ing on the OS

Full control over software with ad-

min/root access

Also highly secure

Server resource utilization is moni-

tored for: High availability and In-

stant Scalability

Cost

Expensive: A dedicated server

requires significant upfront in-

vestment

“Up-to-the-minute” type of billing

Ideal for unpredictable traffic

Ideal for unpredictable resource

usage

5.2 Comparing “real” and “fake” Cloud Software Solu-

tion

First, it is important to understand that this section is not about where the solution is

located (public, private, hybrid), but for which environment it was developed, to take full

advantage of the Cloud technologies. As mentioned before, Cloud technologies are

mainly a new way to design, deploy and deliver applications, so this is also the main

aspect companies are looking for. Unfortunately the problem remains that the term

Cloud does not imply how a solution was developed. Telling a “true” from “false” Cloud

solution is another story and will be one of the toughest challenges especially for busi-

nesses to face. In order to understand the difference between true and false is to know

that a simple hosted application is not a Cloud application. Where the confusion lies is

that, while you can say that all SaaS services are hosted, it is not accurate to say that

all hosted applications are SaaS.86

86 (Transera Inc., 2012)

Challenges 38

Hosted applications are off site and are typically something a business owns as an

asset, because the actual software and licenses are purchased from a Value Added

Reseller (VAR). This software is then installed on a remote server and accessed

through a VPN by a single company. Most line of business applications are still consid-

ered to be client-server-based (see Figure 20). This requires the software client to be

installed on a workstation and is accessed through a client (workstation) link such as

remote desktop, etc. The client or workstation installation is done on the hosted server

and is set up by person or profile. These software applications are not typically web

enabled and therefore require the network infrastructure needed to run the application

such as a Terminal Server. In other words it is a “product” that a hosting vendor rents

out to a company.

Figure 20: Application Service Provider (Own Design, 2013)

True Cloud applications in contrast are built to be web-enabled, which means there is

no need for a client (workstation) installation. Only a server installation is needed and

a device with an Internet connection for the end-user.87 The application is simply ac-

cessed with any device and any Internet browser (see Figure 21). They are also built

from the ground up to be multi-tenant, which means that a single instance of the soft-

ware running on a server (or a cluster of servers) supports multiple client organizations,

maintaining security and privacy by partitioning client data and configurations.88 Appli-

cations designed this way also comply with the NIST’s definition of Cloud.

87 (Phillippi, 2012)

88 (Transera Inc., 2012)

Challenges 39

Figure 21: Cloud Application Provider (Own Design cf. http://www.teamwox.com/en/groupware/articles/60/saas-online-collaboration-system, 2013)

The table below clarifies the advantages of Cloud applications over hosted applica-

tions:

Table 4: Different Characteristics between Hosted Applications and SaaS 89

Hosted Applications

(license plus hosting

SaaS

(software as a service)

Software license Purchased and owned Rented from SaaS provider

Software location Customer selected host-

ing center

Determined by SaaS pro-

vider

Software upgrades Installed by customer Installed by SaaS provider

Backup services Managed by customer Managed by SaaS provider

Financial model Capital expense Operational expense

Deployment model Usually single tenant Usually multi-tenant

According to IDC, SaaS solutions are set to grow six times faster than all software, at a

compound annual growth rate (CAGR) of 26% through 2014.90 This only shows that

there is a big demand for Software as a Service and this is causing companies to simp-

ly jump on the band wagon to profit from this opportunity. Companies like Microsoft

(est. 1975)91 and Oracle (est. 1977)92 are old on-premise software giants that are now

89 (Djohnson, 2010)

90 (NetSuite, 2011)

91 (Microsoft, 2013)

92 (Oracle, 2013)

Challenges 40

being challenged by younger companies such as salesforce.com (est. 1999)93, Net-

Suite (est. 1998)94 and Rackspace (est. 1998)95 that are offering true SaaS. It’s been

said that rebranding a hosted application as a cloud solution is akin to waterproofing a

truck and calling it a submarine.96 Trying to keep up many companies are rebranding,

or as NetSuite says “cloudwashing”97 their products. During the Web 2.0 Summit 2011

in San Francisco Marc Benioff, CEO of salesforce.com commented on the false Cloud

in an Interview98, talking about his thoughts on the issue. His key message is that the

future is not proprietary software or hardware, but it is in fact real Cloud computing,

such as Facebook, eBay and Amazon. Referring to Oracle, he also says that the Cloud

does not include, buying software or hardware, upgrading and maintaining the system

or hiring IT staff to put it all together. Furthermore he admits that there are two versions

of the Cloud and that Oracle is doing the right thing for its shareholders, but if a com-

pany is looking for a new approach they should go for a real Cloud solution. This con-

cern of simply rebranding a product is also shared by Gartner, the world's leading

information technology research and advisory company:

“It is important to also differentiate SaaS from hosting or application management or

application outsourcing. Because SaaS and cloud are hot concepts in the market,

many suppliers are rebranding their hosting or application management or application

outsourcing capabilities as SaaS or are claiming their solutions are available ‘in the

cloud.’ Much relabeling of more-traditional application outsourcing approaches is

occurring. Suppliers run the risk of confusing and antagonizing buyers if they persist in

this approach. Enterprises run the risk of getting nasty shocks when the thing they

thought they were buying turns out to be something altogether different. Hosting and

application management are not synonymous with SaaS, nor do they necessarily

comply with the definition of cloud computing.”99

Charles Weaver, CEO and Co-Founder of MSPAlliance, the world’s largest industry

association (and certification body) for Managed Services and Cloud Computing pro-

93 (Salesforce.com, 2013)

94 (NetSuite, 2013)

95 (Rackspace, 2013)

96 (Agilysys, 2012)

97 (NetSuite, 2011)


99 (NetSuite, 2011)

Challenges 41

fessionals100, says that “Cloud computing is the new gold rush, and there is no short-

age of companies that will say and do anything in order to cash in on this lucrative and

growing market.”101 From a Cloud providers perspective it is clear, that they have to be

careful how they use the term Cloud. Competing companies are raising awareness to

this topic and sensitizing customers to not be fooled by the term Cloud. Concluding the

term “false Cloud” refers to solutions that are not truly “born in the Cloud” but only mod-

ified or even rebranded legacy software that are being offered as a Cloud solution. For

the time-being companies that are looking to buy real Cloud solutions have to make

sure that the solutions are native web-based.

5.3 Businesses and Consumers

From a business point of view it is not only important to understand how Cloud tech-

nologies are used internally, but what impact they can have when it comes to working

customers. Business partners, consumers and suppliers are leveraging technologies

to interact with each other and the business itself to research its products, compare

services and check consumer reviews as well as to try a trial version or a see a

demonstration. First and foremost this type of communication is happening through

various types of mobile devices such as smart phones, tablets and laptops and not on

a fixed desktop over a browser. Instead it is becoming more popular to use Apps pro-

vided by businesses. A 2013 blog report from Flurry Analytics points out that 80% of

surf time is spent on a mobile device using Apps (see Figure 22).102

100 (Mspalliance.com, 2013)

101 (Weaver, 2013)

102 (Flurry.com, 2013)

Challenges 42

Figure 22: App versus Browser Usage (Khalaf, 2013)

This statistic shows that businesses have to have a mobile strategy, when it comes to

how they present themselves to customers. First, businesses have to create Apps or

interfaces that are native to mobile devices to meet consumers’ expectations and their

way to access information. It has to be more than just a website which is accessed

over a mobile device; it has to be “touchable”. Self-presentation is one thing, but the

second important aspect is how others perceive a business and to have a way to inter-

act with multiple platforms such as social media, communities, press releases and con-

sumer forums etc. Businesses are no longer in charge of what their message is (see

Figure 23), but they have to interact with these platforms in order to push out infor-

mation and also get feedback from their consumers. This creates a lot of real time in-

formation that can help push business in the right direction. The last thing to consider is

the scalability of these Apps. This is where the Cloud provider comes into play to make

sure that a business’s App or website can handle, e.g., a successful launch of a new

product or service or overnight demand.

Challenges 43

Figure 23: Interaction Between Companies and their Customers (Own Design cf. http://www.youtube.com/watch?v=cQeCnj3Gy6c, 2013)

From a Marketing point of view this means that technology is becoming essential to

their job. There has to be a balance of understanding between knowing markets, target

groups, product-price-placement (Marketing P’s) and the technologies that are driving

the business. As mentioned above there is a shift of how consumers access and re-

search a company’s product or service from simply a business-website to social com-

munities and other platforms. What this means is that marketers have to be able to

retrieve information from these sites to analyze what the consumers really want. In re-

turn this helps marketers understand how to change the message. Businesses have to

actively participate in creating an optimal product and service portfolio for their custom-

er. Cloud services like salesforce.com allow pulling together and managing this over-

flow of information and utilize it to help a business grow.

Consumers are undoubtedly the driver for Cloud solutions, because it is influencing

their lives in a positive way. They are an expanding collection of services that enables

consumers to connect from any-where in order to work, live, play, and learn.103 Figure

24 shows how a Personal Cloud caters to the individual user, manages the collection

and storage of information, and facilitates social collaboration and discovery. The

Cloud links seamlessly and intuitively with the personal mobile device.

103 (Cisco, 2012)

Challenges 44

Figure 24: Influence of being connected

At the 2011 Worldwide Developers Conference in San Francisco, Steve Jobs (*1955 –

†2011) introduced the iCloud104 and said that “the truth is in the Cloud”.105 This might

be right for Apple due to their strong brand (Table 5), but other companies should not

rely on the term Cloud. Ever since more and more companies have moved up and are

also offering their solution, it is more important to focus on the branding and the mes-

sage behind the offering. Brands can help businesses succeed in a hard-fought market

and also help consumers understand its products or services better.

104 (Cnet.com, 2011)

105 (Yerman, 2011)

Challenges 45

Table 5: US Usage of Major Cloud Media Services

5.4 The Consumer Cloud Trap

Drawing a line between businesses and individuals using Cloud computing is quite

important. Businesses evaluate their situation and have to make long term commit-

ments and investments before switching to new technologies. As mentioned above,

they have to be careful about choosing the right solution. On the other hand, most indi-

viduals will start using a Cloud solution without even knowing it by signing up with a

single provider such as Google. This can be very convenient since an individual just

has one account for many solutions. The following chart gives an overview of some

common Google offerings:

Table 6: Google Brands Overview (Google, 2013)

Use Brand Logo

Social: Contacts, Sharing and

Websites

Google+ and Blogger

Media: Videos, Pictures and

Apps

YouTube, Picasa and Google

Play

Home & Office: Data storage

and organization tools

Drive, Calendar, Gmail and

Voice

Challenges 46

Use Brand Logo

Geo: Maps, Locations and

Routes

Google Maps and Google

Earth

However this single-provider approach to the Cloud is

also a two-edged sword. Although it might seem very

nice to access information from wherever, whenever

and from any device; only relying on one source to

store and secure data can go terribly wrong. The story

of Tienlon Ho was first published on a science blog

“The Last Word On Nothing” and is a recent example

of what can happen when “the Cloud turns dark and

literally strikes you down.”

“Ho is a freelance writer in San Francisco. She uses

Gmail, Google+, and a host of other Google

consumer services. One day, she woke up and found that her Google account had

been suspended for violating the company's terms of service. She couldn't do her taxes

-- all her notes were stored in Drive. She couldn't see her calendar or contacts. She

couldn't even vent about it on her personal blog because she used Blogger. Worse,

she claims, there was no way to appeal the decision. No phone number to call. No

email address to send a complaint to. And no detailed explanation of the violation, so

she could fix it.

Eventually, she was able to get in touch with friends at Google, who filed the right

paperwork to get her account restored. But along the way, she made an alarming

discovery that everybody using consumer services should know about: Google has the

right to shut a consumer account down at any time if it thinks the user violated its terms

of use, and it bears no liability for doing so. From the company's general Terms of

Service: ‘We may suspend or stop providing our Services to you if you do not comply

with our terms or policies or if we are investigating suspected misconduct.’ That's right -

- if Google so much as suspects you of misconduct, it can suspend your account with

Figure 25: Cloud Dangers (Own Design, 2013

Challenges 47

19%

20%

21%

26%

29%

31%

33%

46%

60%

Lack of skills

Lack of standards

Lack of control

Lack of transparancy

Vendor lock-in

Lack of interoperability with existing IT systems

Legal/compliance issues

Reliability/business continuity

Data security

no warning. Moreover, Google limits its liability to the amount paid for the service -- in

this case, nothing -- or reserves the right to restore service and call it good.”106

This shows that individuals are not by any means protected from losing their data.

Even though personal cloud computing can be very convenient and has many ad-

vantages; this issue calls for federal regulations from the government, to ensure that

the consumers are protected.107 Since the idea behind the Cloud is to deliver technolo-

gy just like a utility, it should be treated as such. An electricity or water provider cannot

just cut off customers without warning them and that should also apply to the Cloud

service.

5.5 Cloud Security

There are multiple concerns that businesses and individuals equally are confronted

with when it comes to using Cloud services. The number one topic though is undoubt-

edly the security of online-stored data (see Table 7). While individuals’ actions on this

topic are limited, there are a number of actions a business can take to help insure data

security. In addition to that there are several other issues companies must take a look

at to fully enjoy the new technologies they are purchasing. Finally, the level of security

often depends on the type of service that is being used, the provider and the user.

Table 7: Significant Concerns with Cloud Computing

106 (Rosoff, http://www.lastwordonnothing.com/2013/04/22/dumped-by-google/, 2013)

107 Cf. Weaver, 2013

Challenges 48

a) Individual Users

As previously mentioned, there is very little that individuals can do against providers’

policies, except to use different platforms, spread out and make hard copies of their

information. However security is not only about the provider. There are several threats

that are more severe than losing data due to technical failures. People are uploading

more and more personal information on social media sites and Cloud accounts which

are a direct pathway to personal lives. Data stored on the Cloud can be basically ac-

cessed through any device, which is great, but can also be a major weakness! If one of

these devices were to be lost or stolen, it can be an open invitation to criminals and

thieves. This can lead from being broken into and bank accounts being emptied to

identity theft. Many Apps such as Facebook, Twitter and Phone Locator Apps can

show criminals where people’s location is or what they are doing. These are no new

threats, but the connectivity of the Cloud as caused to rethink and improve security

issues.108 Proven solutions are to make sure to secure devices and accounts with

passwords, encrypt shared data and not to save personal information on public plat-

forms. An article from Abine Inc., a company for online security also points out that:

“The only real regulation in place to define and regulate online privacy is the Electronic

Communications Privacy Act (ECPA). Created in 1986, the document has been revised

several times, but it’s overdue for a major update. The act doesn’t contain regulations

for some of the new and major social media and communication technologies used

online—even email isn’t properly protected.“109

Making sure that individuals are protected from threats caused by the Cloud does not

only help people, but can also help companies.

b) Enterprises

Where individuals are not so lucky with policies, businesses have the advantage of

having contracts and SLAs with their providers to clarify service level conditions and

what happens in case of a security breach. Service Level Agreements (SLAs) are es-

sential for businesses that are purchasing Cloud services from a provider and the first

step to securing data. They are contracts between the provider and the user that speci-

fy the level of service expected during its term. They can specify bandwidth availability,

108 (Downey, 2013)

109 (Downey, 2013)

Challenges 49

the number of users that can be served simultaneously, help desk response time for

problem resolution (network down, machine failure, etc.) as well as attitudes and con-

sideration of the technical staff. SLAs can be very general or extremely detailed, includ-

ing the steps taken in the event of a failure. For example, if the problem persists after

30 minutes, a supervisor is notified; after one hour, the account rep is contacted, etc. 110

Enterprises usually already have security policies set up and the Cloud gives an occa-

sion to revise these policies and update them to meet new standards. IBM’s Director

for security, risk and compliance, Joe Anthony explains five essential points that have

to be evaluated in a security framework: 111

Table 8: Main Security Questions

Area Questions

People and Identity Who are the users and what types of

roles do they have in the organization?

Where are they trying to access data

and applications from which devices are

they accessing information? What kinds

of restrictions are necessary?

Data and Information What is the type of data that is stored in

the Cloud environment?

In what context is the data being used?

What regulations are already in place by

third parties?

Application and Process What is the integrity of an application?

Has it been tested and approved to work

without compromising security?

110 (PCMag.com, 2013)

111 (IBM, 2013)

Challenges 50

Area Questions

Network, Server and End Point Are traditional firewalls up-to-date?

Intrusion-Prevention-Systems set up on

the providers and company side.

Is the Anti-Malware up-to-date?

Physical Infrastructure Who has physical access to the infra-

structure and is it as constrained as

possible? badge access

With these sets of controls in place an enterprise must close loops in these areas. It is

essential to segregate data and understand what employees are doing with their au-

thorizations and that these fit the intents of the security and governance policies.

Even though data security might be the main issue for many there is another one that

is almost as immediate to businesses and that is control.112 Matt Mansfield elaborates

on this topic in his article “The Elephant in the Cloud – How Secure is Your Data?” and

questions that enterprises have to clearly understand in order to have a good Cloud

experience. First and foremost, it is important that businesses research vendors to en-

sure they are sophisticated enough to survive a challenging market. In an interview

with the author, Matt explains that due to the many different Cloud offerings that are on

the market today, his number one concern is what would happen to his data, if the

vendor went out of business, not necessarily data security.113 The numbers in Table 7

underscore his statement, which says that 46% are concerned about reliability and

business continuity, meaning data availability and accessibility. Other questions cover

issues such as:

a. Is there a backup, if the vendor’s server crashes?

b. How often does that backup happen, i.e., will a company lose an hour or a day?

c. Where is the backup stored and does the vendor have procedures to get data

loaded somewhere else in order to get systems back up and running quickly?

d. What happens to a company’s data if it chooses to move to another vendor?

And even if the company moves, does the vendor keep a copy?114

112 (Mansflied, 2011)


114 (Mansflied, 2011)

Challenges 51

Matt Mansfield also says that he does not really understand why people are so con-

cerned about data security in the Cloud. Bottom line is that they are still using the In-

ternet and many people use online banking to do transaction, pay bills, purchase items

or validate checks. This is quite contradictory to him, as he cannot think of anything

more valuable then people’s money and still people seem to be comfortable trusting

the Internet with such tasks.115 In reality, Cloud providers can afford higher security

levels than most businesses, because of the economics of scale they have. Reputable

Cloud providers will be able to clearly articulate specific governance, operational and

regulatory guidelines that they follow to assure the security of a company’s data. This

includes helping it to understand the policies for ID management and access control —

who is authorized to do what and when.116 It’s not about a generic security level for the

cloud; it is choosing the right security for a businesses’ cloud.117

Most of the security issues concerning Cloud computing are not new. The actual ob-

stacles businesses have to face is accepting the idea of storing and managing proprie-

tary data online. VMware illustrates how these issues can be resolved: 118

Figure 26: VMware‘s Equation of Trust (Own Design cf. Footnote 118)


116 (CIS - Custom Information Services, 2013)

117 (VMware, 2011)

118 (VMware, 2011)

Challenges 52

Matt’s security article also addresses that people are becoming more comfortable with

a part of their lives being online. Using personal Clouds when working from home and

have company documents easily accessible sounds great. The problem is that users

sometimes may put too much trust in the technology they are using. Mixing personal

Clouds with sensitive business data can result in liability. As good as a Cloud providers’

security might be, actual security threats might come from inside!

Something that companies cannot always control is what their employees are doing

and this is causing major security issues. Although a company might have implement-

ed a Cloud solution many employees will occasionally turn to personal accounts on

consumer web services to store and share data with customers or with themselves.

Using non-internal Cloud solutions is referred to as “Stealth Cloud” or “Shadow IT” and

poses serious threat to exposing sensitive information. Sometimes it is because IT has

offered no viable alternative, or the approved IT-controlled service is too hard to use.

Sometimes it's simply out of convenience - a partner at another company is using a

particular service, so it seems easier to go along. Whatever the reason, IT often quietly

approves the practice. IDG Enterprise's recent survey on consumerization showed that

47% of IT departments approve of employees using consumer services at work.119

Problems emerge when e.g. personal accounts are compromised or if employees leave

the company with important documents on their Cloud. Locating the problem can also

pose difficulties, since the data can basically be accessed from anywhere. Employees

will always choose the simplest file storage and sharing system regardless of what type

of security or privacy is provided. A solution to closing this Cloud gap, businesses and

IT departments must educate their employees on online security. If they cannot provide

a Cloud themselves, they can at least help encrypt data before it leaves the work-

space.120

Recalling the benefits and challenges around the Cloud, companies will have to resolve

the equation if the issues really outweigh the benefits. While Cloud computing might

present unique security problems, these are not issues that cannot be resolved over

time.

119 (Rosoff, http://www.citeworld.com/cloud/, 2013)

120 (Laconicsecurity.com, 2012)

Challenges 53

Table 9: Chances versus Risks

Benefits Key Questions

Access Anywhere

Only Internet connectivity and browser

required

Service Level Agreements

Uptime Guarantee and Change Manage-

ment

Little or No Configuration

Setup is easy and low cost of owner

ship

Security

Safety and Compliance

Cost Savings

Low upfront costs and subscription based

Data Ownership

Can it be sold, shared or defended

Data Access

Privacy

Finally it is clear that even though enterprise and personal Clouds are two different

things, the lines between them are blurring; they are interlocked and businesses have

to be aware of that. As painful it might be for individuals to lose their pictures of their

last holiday, exposing or losing sensitive business data can mean the end for company.

Ultimately businesses will have to get used to being more open to the public and do

their best to secure their data.

Questionable Features 54

6 Questionable Features

This chapter addresses two misconceptions of what the Cloud is capable of. These

include that using these new technologies make a company more environment-friendly

or that Cloud may have a negative effect on IT jobs.

6.1 The “Green” Cloud

Saving energy on a global level has been a hot topic for a number of years and the

word “green” is used frequently to describe products and services that are environmen-

tal friendly. Due to cost savings or governmental enforcements businesses are looking

to save energy and reduce their carbon footprint. Cloud computing can be screened for

this aspect as well and it might be a part of potential solution. Even Greenpeace says

that:

“Global IT companies and cloud computing companies have a tremendous opportunity

and unique responsibility to take greater control of their electricity supply chain, and to

manage their energy ecosystem both outside and inside the data centre.”121

The problem with data centers and server farms is that they consume an immense

amount of electricity, not only to run but also to be cooled to prevent overheating. Ac-

cording to Gartner, IT systems are responsible for two percent of the world’s green-

house gas emissions, and experts expect that number to increase.122 The technologies

that enable the Cloud are the main drivers for making it a greener solution for compa-

nies:

Dynamic provisioning, which ensures that server resources are matched to ac-

tual need

Multi-tenancy, which makes for flatter peak loads (which can drive big energy

costs)

Server utilization through virtualization, which means you get better use out of

the hardware

121 (Greenpeace, 2012)

122 (Blaisdell, 2011)


More efficient data center designs with advanced cooling and power condition-

ing technologies123

The result is that data centers have fewer servers that need electricity and cooling.

According to market research conducted by Pike Research, the wide-spread adoption

of cloud computing could lead to a potential 38% reduction in worldwide data center

energy expenditures by 2020. The savings would be primarily achieved by consolidat-

ing data centers and maximizing power usage efficiency (PUE), improving recycling

efforts, lowering carbon and gas emissions and minimizing water usage in cooling the

remaining centers.124

From a vendor’s perspective, the incentive to “go green” is based on financial benefits.

Running a data center as efficiently as possible can save them a lot of money. Virtual-

ization, automation and server consolidation pay out directly, while choosing a location

to use renewable energy resources might not be as cost effective. This means that

even though the technologies and architecture of a data center might become more

“green” they still might be running on fossil fuels. Environmentalists are concerned that

vendors are confusing efficiency with environmental friendliness, which leaves the

question open if the Cloud is really “green”.125 In the long run it is the vendor that is

responsible for making the Cloud truly eco-friendly.

6.2 The Cloud’s Effect on IT Management

The Cloud is causing shifts in many areas of the technology industry including IT jobs.

Because Cloud technologies are remodeling the way IT is provided and data centers

are managed, IT jobs are destined to change as well. This does not mean that there

will be fewer jobs. Roles are likely to transition from in-house IT teams to cloud provid-

ers as companies consume more Cloud services. The roles and demand for skills will

remain.126

123 (Clancy, 2010)

124 (Rousse M. , http://searchcloudstorage.techtarget.com/definition/, 2011)

125 (Nguyen, 2011)

126 (Heath, 2012)


Due to the different levels of Cloud computing, as well as various environments and

target groups, some jobs will likely have reduced demand, some will have more de-

mand, and even some new jobs will be created — both within and outside of IT. The

three service models, SaaS, PaaS and IaaS all require a different amount of on-

premise technical and administrative support. Reducing a company’s IT department

depends on the level of services being used from the Cloud.127 (Figure 27)

Figure 27: Skill Requirements for Cloud Services (Own Design cf. http://mscisyaminimishra.files.wordpress.com/2012/10/cloudcomp.pdf, 2013)

IT jobs are changing. Here are some examples:

IT will need more Business Analysts to collect information and evaluate users’

needs, choose the right Cloud vendor for a company and integrate and update

applications into business processes.

Companies that are using several Cloud vendors will need System Integrators

to help create a cohesive system.

Project Managers will need to be able to utilize fewer IT resources for running

more systems at the same time.

Technologists with a deep understanding and working knowledge of Private

and Hybrid Clouds will be in high demand as large companies try to implement

cloud-based technologies inside their data centers.

127 (Czarnecki, 2012)


There will also be an increased need for highly skilled Security Specialists be-

cause more Cloud vendors mean more openings through company firewalls.

IT will ultimately have to move out of the back office to directly communicate

and support Operations and Marketing with their knowledge.128

No doubt this means that companies will have to invest in advanced education for their

IT staff in order for them to fulfill these requirements. In the end, the Cloud is still run by

people, who have to maintain, renew and upgrade the systems. As with many jobs, if

someone is good at it, it is likely they will keep that job.

128 (Bloom, 2012)

A simple example: Charlie’s Chocolates 58

7 A simple example: Charlie’s Chocolates

CA Technologies provides IT management solutions that help customers manage and

secure complex IT environments to support agile business services.129 Charlie’s

Chocolates is a fictional example by CA Technologies130 and metaphorically explains

how a small business owner can leverage Cloud computing to succeed. The author

chose to leverage this example, because it can be used as a general overview and

includes everything mentioned in the chapters before. This easy-to-understand exam-

ple covers many of the topics mentioned above.

Charlie is the owner of Charlie’s Chocolates. His chocolates are unique, not only be-

cause he makes them himself, but he also personally delivers them to his customers.

At first he delivered everything on his own, but eventually he bought some trucks and

hired drivers to deliver his products so he could concentrate on making chocolates. The

downside is, now Charlie is responsible for the trucks, their maintenance and that all

the drivers are doing their job. Also paying the drivers is very expensive, because they

are paid even if the trucks are not running. With a holiday approaching, Charlie knows

he does not have enough trucks to deliver his chocolates on time. Chocolates might be

left on the loading dock and that means that his business will suffer. Charlie’s friend

suggests he should contract with a trucking firm. The firm has an unlimited amount of

trucks and drivers that Charlie can use on an as-needed-basis. The result is that he

only pays for what he uses and the trucking company takes care of its trucks and the

drivers. Now Charlie can focus on his core business of making chocolates.

Over time, Charlie’s Chocolates expands with several shops around town. He even has

a corporate headquarters where the chocolates are manufactured. Now Charlie has

new problems, such as maintaining his inventory, providing a website to take online

orders and keeping track of his expenses. Charlie makes chocolates and he does not

know much about servers, networks and websites. Therefore he decides to hire a Chief

Information Officer (CIO) to take care of the IT part of his business. The CIO knows

that Charlie worries about having enough computing power at peak times when he

needs it and wasting money on unused computing power the rest of the time.

129 (CA Technologies, 2013)

130 (CA Technologies, 2010)


The CIO knows he can offload IT services like Charlie did with the trucks. Instead of

building servers and deploying applications himself, he can work with other companies

to provide him with these services. These other companies have the computing re-

sources needed and are responsible for operating and maintaining them. Now they can

access the exact amount of computing power they needs as a service, from a shared

pool of resources, over the internet, paying only for what they use, when they need it.

This is the concept of Cloud computing.

So he can add more computing power to his business as he needs it, so the peak sea-

son will no longer be a problem. Accessing additional infrastructure capacity over the

web is much faster than having a supplier deliver and install new hardware – Charlie

does not have to buy, operate or maintain the servers of storage. This is all part of the

service he is consuming. This is called infrastructure as a service: IaaS.

Like the delivery trucks, Charlie only pays for what he uses, which means he saves

money. Also, because it is an operational expense he can save his capital for invest-

ments in his core business. In the event that Charlie needs a new inventory system, he

can purchase software and run it on hardware at his company. Or he can use a com-

plete inventory system that lives in the Cloud. This is called software as a service:

SaaS.

When Charlie uses SaaS he uses only his browser to access the software over the

Internet. The software is running on the Cloud provider’s hardware, so again Charlie

has no infrastructure to buy, operate or maintain. It is all a part of the software service.

With SaaS, the hardware and software are shared by many customers, while still main-

taining security and data separation. Therefore when changes to the software are nec-

essary, such as bug fixes or upgrades, the changes can be pushed to all users at once.

This means that each customer always has the latest version of the software. As a re-

sult of SaaS:

The customer always has access to the latest software version

There is no need for up-front, lump-sum payments for license fees

It is easy to use and customer is up and running in no time.

Once in a while, Charlie needs a specialized application and his IT department creates

that application specifically for Charlie’s Chocolates. He can use Cloud computing for

this as well. Platform as a Service, or PaaS provides software development environ-

ments that allow developers to create applications using the Cloud. Then they can run

this custom application on the Cloud provider’s infrastructure, where it can be accessed

over the web. Charlie now understands that there are three kinds of Cloud service

models: IaaS, SaaS, and PaaS. But there are some things about Cloud computing that

Charlie should still know. For Example, a Cloud environment can be deployed using


different models. They can be Public, Private or a combination of the two called Hybrid.

Public clouds offer services to anyone willing to pay for them. One of the most well

known is AWS (Amazon Web Services). Private clouds on the other hand can be within

the user’s organization and operated by the internal IT staff using their own servers and

resources. Or a Private Cloud might be hosted off premises by a service provider oper-

ating these services specifically for one customer. A Hybrid combines a Private and a

Public Cloud, to get the best of both worlds. For example, a service might run in an

organization’s Private Cloud, but use resources of a Public Cloud to handle peaks in

demand. This is sometimes called Cloud bursting. Charlie’s CIO decides he needs an

internal computing environment that is agile and elastic. Being in the chocolates busi-

ness, Charlie and his CIO know there has to be a formula behind every Public Cloud.

That formula includes:

Network access from anywhere

On demand self-service

The ability to pull from a shared pool of computing resources

The ability to add and subtract resources to match what is needed

The ability to meter resources, so the users know what they are getting for their

money and so that they only pay for what they use.

One of the useful technologies for making Cloud Computing possible is virtualization.

Virtualization is a way to abstract resources such as servers and storage, separating

their capabilities from the underlying hardware infrastructure. With the right tools in

place, virtualization can be used to pull your resources so that they can be repurposed

automatically for different computing requirements as users demand them. For exam-

ple, more servers can be provided dynamically as necessary during peak times. This

flexibility makes Cloud computing possible and is basic to being agile and elastic. One

benefit to server virtualization is by combining workloads you need fewer physical

servers. Without virtualization the average servers generally use 10-15% of their ca-

pacity. With virtualization you can increase that to 65% or more. As a result of virtual-

ization and the right management tools, the time to acquire and build new servers is

reduced from weeks to minutes. New virtual servers do not have to be justified in the

same old, formal processes. Servers are used on the basis of capacity. It is not neces-

sary to have or buy as many servers and less power and cooling is necessary, making

a greener company.

So now Charlie understands the basics of Cloud computing and how it might help his

business. However Charlie is a clever businessman and aware of the challenges, in-

cluding:

Will his data be secure?

Will he be in compliance with appropriate regulations?


How easy is it to see what is going on?

Can he trust the vendor and is it reliable?

Who does he call, if something does not perform as expected?

And where is the data anyway? And who has control of it?

7.1 Finances

Just like Charlie most companies are trying to make the most out of their business. In

general, the main goal of companies is to reach their goals at the lowest cost possible.

Cloud computing can be a tool to do so, but there is no one-size-fits-all model when it

comes to the financial benefits the Cloud has to offer. Once again the approach de-

pends on the size of the company and their long or short-term goals. Elaborating on

Cloud financing often leads to a “CapEx versus OpEx discussion”, but it is essential to

know that these terms have nothing to do with actually saving money. They are merely

accounting terms that describe where the expense is put on the balance sheet and if

money is being spent upfront or over time.

OpEx refers to expenses incurred in the course of ordinary business, such as sales,

general and administrative expenses. CapEx refers to an investment made in assets

that will be used typically over several years and are usually depreciated in value over

time. This means their value on the balance sheet is decreased every period based on

certain accounting rules. It can include things like real estate, vehicles, machinery and

also servers. Both terms do not have anything to do with how an asset or service is

paid. For example, a company can buy servers and pay for them over three years

(CapEx) or on the flipside it can purchase three years of services up front (OpEx).131

In essence, what companies really have to think about is if they have money to invest

in hardware upfront, how much the service will be used, how much it will cost over a

certain period of time or if it would rather pay off to purchase the same thing over time.

A simple comparison is the decision of buying or renting a car. If a person plans on

using the car full-time, then purchasing/financing the car likely makes the most sense.

131 (Geva, 2009)


However, if the person plans on using the automobile only for a week a month, then

perhaps renting is the better choice.132

One of the benefits of the OpEx model is that there is no long-term commitment. When

a user is finished with the resource, it is returned to the provider, who holds utilization

responsibility. This can appeal especially to SMBs which do not have the capital to in-

vest in infrastructure upfront. On the other hand, big companies with more money might

profit more from investing in their own hardware.

Nevertheless, there are many more costs involved in running your own IT infrastructure

that go beyond just buying servers, networking equipment and software licenses. The-

se include: real estate, energy, cooling, IT admin staffs, management and monitoring

software and servers and on and on. It is true that many of these costs are already

included in hosting services such as Rackspace, but the important thing is to make

sure you're always comparing apples to apples. Furthermore, there are many econom-

ic benefits to Cloud computing that arise from issues other than direct costs savings on

infrastructure acquisition. They include things such as increased agility (the ability to

get up and running with new products and services faster) and the ability to scale on-

demand to handle unexpected loads (and thus prevent loss of business due to de-

creased performance or outright downtime).133

7.2 SuccessFactors Financial Example134

A white paper by SuccessFactors, an SAP company and Cloud service provider, com-

pares the costs of an on-premise HR IT solution with a Cloud solution for a typical

10,000 employee company.

As Figure 28 illustrates, on-premise solutions require initial investments in software and

database licenses, hardware and external implementation consultants. Most of these

costs are incurred before going live. In addition to up-front costs, there are ongoing

costs, including license renewals, software and hardware maintenance, and the sala-

ries of on-staff database administrators (DBAs). After four to five years, most applica-

132 (Golden, 2012)

133 (Geva, 2009)

134 (Eriksson, Berggren, & Fröschl, 2013)


tion software has become outdated and requires an upgrade. The largest cost item for

an on-premise solution is implementation (see Figure 28). Two factors drive this:

The large degree of customization required when implementing on-premise

systems, which often includes expensive code modifications.

The need to re-implement upgrades after 4-5 years

Figure 28: Cost Structure of an On-Premise Human Resource Information Solution

Figure 29: Cost Structure of a Cloud-based Human Resource Information Solution

Implementation 45%

On-staff 24%

Database License Cost 16%

License Cost 9%

Liecense Maintanance 4%

Hardware Costs 3%

Implementation 40%

Subscribtion Cost 60%


The up-front costs for Cloud solutions consist exclusively of external configuration

consultant fees and support from internal IT and HR personnel (see Figure 29). These

costs are typically much smaller than in the on-premise case. The reason is that

software in the Cloud is typically configured to meet special customer needs, a process

which involves activities like checking a series of boxes that control system options. In

contrast, implementing on-premise systems is a much more complex process, because

it may involve writing code. Customization is sometimes limited, but there is no need to

re-invent the wheel for every customer. On-going costs for Cloud solutions consist of

subscription fees and nothing else. All other costs are the responsibility of the provider.

Additionally, since Cloud-based solutions are updated several times per year as part of

the agreement, it is not necessary to purchase software upgrades and re-implement

every 4-5 years (see Table 10).

On-Premise vs. Cloud: The TCO Comparison

The cost structure for a Cloud solution is much simpler for an on-premise solution.

More importantly, the total cost of ownership is significantly lower, as the graph below

illustrates.

Table 10: Typical Costs for a 10,000 Employee Company

Table 10 shows typical costs of an on-premise HR IT solution for a 10,000 employee

company vs. the costs for an equivalent Cloud-based solution. The cost increase in

year five is absent because, as noted, Cloud deployments feature continuous updates

that do not require upgrades or re-implementation.

0

1000

2000

3000

4000

Year 1 Year 2 Year 3 Year 4 Year 5

An

nu

al C

ost

s (i

n $

'00

0)

On -Premise Costs Cloud Costs

Outlook and Conclusion 65

8 Outlook and Conclusion

In the authors’ opinion, the Cloud is a ball of yarn that definitely is worth untangling.

Major research companies like IDC and Gartner predict major growth in the Cloud mar-

ket and it is clear that this movement is not about to disappear.

“According to market research firm IDC, the worldwide public cloud services market is

poised to reach a lofty $100 billion in 2016. For comparison's sake, this year the group

forecasts that spending will total $40 billion.”135

“The desire to share content and to access it on multiple devices will motivate

consumers to start storing a third of their digital content in the cloud by 2016, according

to Gartner, Inc. Also they say that just 7 percent of consumer content was stored in the

cloud in 2011, but this will grow to 36 percent in 2016.”136

Understanding such a vast topic can be confusing at first, but when it is broken down to

simple parts it makes it easier to grasp. Firstly it is essential to understand that the

Cloud is not a technology, but composed of different kinds of technologies and con-

cepts. Identifying and linking all of these can be a challenge. However, they are not the

reason why Cloud computing can be difficult to understand. The actual problem lies

within how the Cloud is marketed by all the technology companies. In the authors stud-

ies he stumbled across the phrase “not all Clouds are created equal” quite a lot and

this term describes exactly what is causing a lot of confusion. In a conversation about

the Cloud it is important to be very specific about its attributes and differentiate be-

tween Clouds which are used by individuals and businesses. The public sector and

individuals adapt much easier and faster to a new technology concept such as Cloud.

In contrast, businesses have to overcome more barriers to keep up with these techno-

logical changes. In an effort to keep up with this pace companies use the term Cloud to

brand and market their products, even though they might not be offering a solid solu-

tion yet. All of these different offerings for many different needs are the true reason why

the Cloud is difficult to understand. It will be in a company’s best interest to make the

term Cloud as clear as possible to keep their customers happy and to avoid causing

confusion. Demystifying the Cloud will stay a topic until Cloud offerings have consen-

135 (Gartner, 2012)

136 (Hernandez, 2012)

Outlook and Conclusion 66

sual, obligatory regulations that companies have to comply with. Until then, individuals

and businesses should make an effort to understand the Cloud solution they are pur-

chasing and continue comparing options to ensure their solution is what suits them

best. It is clear that this new approach for providing and distributing data is here to stay.

In the author’s opinion, it is important to keep an eye on the transformation of Cloud

Computing.

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Appendix XXII

Appendix

1. Call with Matt Mansfield – President of Matt About Business, LLC

02/05/2013 – 8:00 – 9:00 CT (Houston, TX – Chicago, IL)

“My audience is small business owners, who want to use the web to get business done.”

Cloud is often misunderstood, because people are to focused on the technical aspects -

potential clients have to view the Cloud from a business standpoint, the technical aspect

don’t really matter to the end user.

Business people who are looking into adopting the cloud have to view it as a business deci-

sion and not a technology decision for their business

Security:” I don’t understand, why people are so concerned about using the Cloud for stor-

ing their data, if they’re doing online banking all the time. And their money is the most pri-

vate thing they have. That to me is a dichotomy and a great example why people should

rather focus on the benefits, then only on the security issue.” [Division into two mutually

exclusive, opposed, or contradictory groups: a dichotomy between thought and ac-

tion.]

Not many business people actually look into the risk vs. reward situation. They might even

use the security issue as an excuse to put off the cloud topic and not adapt to it. If that is

your main concern, just make sure the vendor is taking care of it.

“One of my biggest concerns when selecting a cloud solution is that a company comes out

with a great product or service and the vendor doesn’t stick around, because their product

doesn’t catch on or they go bankrupt. Then I put a lot of work into implementing the prod-

uct for nothing.”

Definition:”To me the Cloud can’t really be defined in a single statement. The Cloud is a

bundle of definitions that are out there. It is a specific functionality that is built on and

empowered by the technology of the internet. Basically it is the internet, but more than

that. It is the expression people use to paraphrase that they are consuming (utilizing) a

service through the internet. The lines between the services within the cloud are blurred

and can’t be defined as one thing.”

It’s hard to define, because the concept of the Cloud enables so many different kinds of

services. It’s easy to use for so many different things and that’s why using the term Cloud

can of often be confusing.

Cloud as a generic expression: If some told you the Cloud could slice and dice, you would

consider it to be a chef. Someone else adds, that it can also clean and make your bed, it

would become some chef and maid at the same time. Let’s add that the Cloud can also

drive you to work, do some of your work up and do your grocery shopping and so on. That

would make it a chef-maid-driver-secretary-assistant-shopper. Same can be said about the

Cloud. It helps you build relationships with you customers, store your data, market and sell

your product, outsource your tasks, make transactions and overall manage your company.

Cloud is an extensive and generic expression like “the government”, which is made up of

many different people, departments and organizations. Another analogy would be “reli-

gion”, which would include all of the different gods, cults and communities.

Cloud services are a layer of the internet.

Appendix XXIII

The cloud symbol is just used by technical people to describe the technical space that

connects point A to B. It originates in technical drawings that include a wide area network

(WAN).

Example Dropbox: Lines are blurred between SaaS and IaaS. You can store files and data

on Dropbox, but there’s also functionality to it, which is typical for SaaS.

Eigenständigkeitserklärung XXIV

Eigenständigkeitserklärung

Hiermit erkläre ich, dass ich die vorliegende Arbeit selbstständig und nur unter

Verwendung der angegebenen Literatur und Hilfsmittel angefertigt habe. Stellen, die

wörtlich oder sinngemäß aus Quellen entnommen wurden, sind als solche kenntlich

gemacht. Diese Arbeit wurde in gleicher oder ähnlicher Form noch keiner anderen

Prüfungsbehörde vorgelegt.

Ort, Datum Vorname Nachname