Opportunities presented by cloud computing

Based on the features of cloud computing noted, studies have evaluated the opportunities and challenges that cloud computing adoption presents. The primary opportunity that cloud computing presents to business entities is the reduction of capital costs of IT investments (Kambil, 2009). Due to the availability of utility computing aspects noted of cloud computing, business entities can avoid installation and maintenance costs associated with information systems (Ambrust, et al., 2010; Kambil, 2009; Weinhardt, et al., 2009). Such increased cost savings on hardware and software results from higher virtualization levels of cloud computing technology than the predecessor technologies, allowing users to use standard web interfaces to access various applications from the cloud without having to install these applications in their hardware (Ambrust, et al., 2010; 2009; Weinhardt, et al., 2009). With these savings businesses can commit funds previously employed on installation and maintenance of systems to activities that ensure a more efficient service.

A second opportunity allowed by cloud computing technology is scaling of resources to meet specific needs of an entity (Kambil, 2009). With a pay-per use model of pricing rather than the sharing model employed in grid technology, organizations can pay for additional resources on a need basis (Ambrust, et al., 2010; Kambil, 2009; Weinhardt, et al., 2009). Such advancement allows organizations to effectively use the resources without having periods when the resources are underutilized thus helping the firms to drive value for money (Kambil, 2009). A related opportunity presented by cloud computing regards the reliability of the systems. While grid computing requires provisioning backups to ensure effective access at times when the servers may be overloaded, cloud computing allows immediate retrieval due to its resource optimization among various tenants (Kambil, 2009; Vaquero, 2009; Weinhardt, et al., 2009). Based on these aspects, cloud computing could offer other spill-over advantages such as effective customer service resulting from a more efficient and cost effective system that avoids delays in services provided to customers (Kambil, 2009).

To exemplify the benefits that cloud computing bears to business organizations, Lee and Zomaya (2010) evaluate how the technology can be used to solve one of the main performance concerns associated with distributed computing systems; ensuring task completion within estimated time frames. Using a system model and a scheduling model the study evaluates how cloud computing could be used in addition to Grid computing to better rescheduling in order  to address delays in job completion caused by server overloading (Lee, & Zomaya, 2010). The study found out that use of cloud resources, in addition to organizational servers, could significantly reduce job completion delay periods thus increasing efficiency in performance of various activities (Lee, & Zomaya, 2010).

Expanding on the benefits of cloud computing; Etro (2009) concentrate on the benefits that would arise to the economy if the technology is adopted in various sectors. Using a macroeconomic model – dynamic stochastic general equilibrium (DSGE) calibrated model  – that is employed in evaluating short term and long term economic reactions; the paper assesses the impact of cloud computing on aspects such as business establishment and competition (Etro, 2009). Deriving country and sector data from EU statistics (Eurostat), the study found that cloud computing adoption could contribute greatly to GDP growth and hence positively influence real economic indicators such as employment levels (Etro, 2009). Further, out of the reduction in fixed costs such as hardware costs needed for entry into a given market, the paper finds that cloud computing could offer incentives for entry into the industry thus increasing competitiveness in the market (Etro, 2009). Such competitiveness would ensure provision of quality services that in turn helps in generating a higher customer satisfaction and loyalty. These two examples present a case for adoption of cloud computing to better both firm-leve and economic-level outcomes. Go to part 5 here.

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