Executive Summary Cloud computing allows organizations in multiple sectors to maximize their resources. Individual consumers have already shifted their email and data storage to the cloud, as with web-based email and file sharing applications like Dropbox. Enterprise-level cloud computing presents additional benefits that allow companies of all sizes to remain flexible in their use of IT services. Cloud-based computing also precludes heavy investment in initial technologies or proprietary systems, shifting to a pay-per-use model. The fears related to security of enterprise data and potential impediments to service can be mitigated by choosing the right cloud computing provider and securing all client-side devices.

Introduction: What Is Cloud Computing?

The essence of cloud computing is sharing critical resources. Convenience and cost-effectiveness are the cornerstones of cloud computing, which is why cloud computing services have become ubiquitous. Other core components of cloud computing include its on-demand nature, self-serve features, rapid and easy scaling (elasticity), optimization of resources like bandwidth, and accessibility on multiple devices and platforms (Mell and Grance). Cloud infrastructure includes both hardware (such as servers or storage) and software. Cloud computing clients pay for the services, such as through a subscription fee. Clients do not need to worry about maintaining servers or storage systems. Likewise, the cloud provider handles all maintenance, troubleshooting, and support issues.

There are three types of cloud computing models: Software as a service (SaaS), Platform as a service (PaaS), and Infrastructure as a service (IaaS). Software as a service means the client runs the proprietary software as a stand-alone application or as a software accessible on a web browser. Web-based email is probably the most common SaaS.

Platform as a service is primary useful for clients that develop their own software applications. The client benefits from reduced resources spent on maintaining the underlying platform, while still being able to develop the products and services they sell. Google’s App Engine is an example of PaaS.

Finally, IaaS is for clients who need actual...

The client benefits from IaaS by not needing to make the costly up-front investment in the actual infrastructure. Likewise, the client can also reduce or expand IaaS serves as needed to more efficiently manage variable costing. Many of the most established cloud computing companies like Sales Force, Amazon Web Services, and Microsoft Azure offer both IaaS and PaaS.
Costs and Benefits

Cloud computing presents far more benefits than costs for most companies. The primary benefits include improved cost management, as there are no up-front costs associated with investment in either hardware or software, allowing you, the client, to focus on developing your business. Also, cloud computing services are fully scalable. When any cloud-based software or hardware system is no longer needed, it can be removed from the list of services. An analogy would be cellular phone service; a customer only pays for the plan that suits their needs. With cloud computing, the client only pays for the products and services they need. This benefits companies that rapidly expand, as well as companies that plan on diversifying or changing their focus regularly. The client does not need to perform regular maintenance on software or hardware systems, or be concerned about upgrades. Most of the risks involved with hardware and software management are transferred to the cloud provider (Zhang, Cheng and Boutaba). Finally, employees enjoy cloud computing because of the flexibility it affords in accessing their work remotely and on multiple devices including their mobile phones (Franklin, Bowler, and Brown).

However, the drawbacks of cloud computing should be included in any sensible risk assessment. One risk is service reliability and availability. The client depends on the cloud provider for essential business services including email. If the provider’s own systems fail, then the client suffers. This risk can be mitigated easily by purchasing cloud based services only from reputable providers. Another risk is data lock-in, which essentially means that once you, the client, commits to working with a specific cloud provider, your data might not be easily transferable to other software systems should…