Networked it Evaluating the Advantages and Disadvantages

Networked IT

Evaluating the Advantages and Disadvantages

of Using Cloud-Based Systems for IT Storage and Applications

The emergence of cloud computing as a disruptive innovation is redefining the economics of information technologies, application delivery and the pace of new feature development and introduction. Companies who are standardizing on cloud computing for critical tasks including Customer Relationship Management (CRM) do so after evaluating several factors, including the opportunity to expense the costs vs. pay for them via capital expense, the customization of the applications, and the ability to selectively update them over time (Lashar, 2009). Cloud-based applications delivered over Software-as-a-Service (SaaS) platforms are paid for as an operating expense, which is often referred to as OPEX. Traditional enterprise software is paid for through CAPEX, or capital expense investment. This is a critical point in the economics of this market and a primary criterion that TUI University needs to consider was it evaluates using a cloud-based solution for storage of data and hosting applications. The intent of this analysis is to evaluate the advantages and disadvantages of using cloud-based storage and applications at the university, assessing benefits and risks in the process.

Assessing the Benefits and Risks of Cloud Computing for TUI University

Cloud computing offers many potential benefits that are well defined through the marketing efforts of enterprise software companies including Salesforce.com, who has been one of the leading evangelists for this technology platform (Lashar, 2009). The benefits of lower operating expense due to paying for only the storage, computing cycles and transfer rates through operating expense (OPEX) could save the university a significant amount of budget every year. The educational value of a more agile, responsive computing platform that could provide the IT department with much greater flexibility in meeting the staff, administrators, professors and student's needs is also a potential benefit of moving storage and applications to a cloud platform. There is also the potential for the cloud-computing platform to create much greater levels of collaboration and communication campus- and school-wide due to the continual availability of information and knowledge (Hodge, Collins, 2010). Cloud computing would also enable more effective teaching methods as the applications are designed to be more customizable to unique needs. The teaching technique called scaffolding, where individual lesson plans are devised for each student, would be possible to quickly create using cloud-based application, as case studies indicate this is a successful online teaching strategy and support platform (Katzan, 2010). The 24/7 nature of cloud computing applications would also provide students with the opportunity to check their grades, get updates from professors, and also download homework, print it, and complete it in the evenings. The accountability of academic performance university-wide could be enhanced with a cloud computing platform approach to delivering e-learning applications as well (Doelitzscher, Sulistio, Reich, Kuijs, Wolf, 2011). Despite the perception of cloud computing being only public, which is what many of those writing about cloud computing and Web Services tend to discuss the majority of the time, private cloud computing is more attuned to the needs of students and faculty. This is especially the case when privacy and security of opinions and information presented in class needs to be protected to ensure confidentiality (Ryan, 2011). Cloud computing-based access to applications and data storage would also make updates to specific features and functions more efficient and save the IT department hours of having to load up a specific licensed application for a specific need or teaching strategy by a professor. The reliance on the continual update capability of cloud-based applications would also provide for n enriched learning experience for students using online applications to enhance their marketability later on. An example of this is the use of CRM systems within business classes to be more efficient at managing customer relationships once a business student graduates and begins working full time. Cloud-based CRM systems are the fastest growing area of customer management applications today (Lashar, 2009). A student who graduated with a strong understanding of CRM would be more marketable than one who had only theoretical or secondary knowledge of how these applications worked. This is one of the biggest payoffs for cloud computing from a student standpoint; it has the potential to provide marketable skills, which will help students, land jobs once they graduate.

The drawbacks of having data storage and applications on cloud computing platforms include the lack of fault-tolerance platform support by many providers, the need for ensuring multi-tenancy of all applications for more security and scalability, and the high costs of data integration across the many legacy systems the university requires to operate on a daily basis. The most challenging of these are the security concerns, which would need to be continually monitored with periodic audits being completed over time to ensure they are as secure as possible (Owens, 2010). Security audits are a fact of life when data and applications of any business is in the cloud. Vendors selling cloud computing services or applications, hosting platforms and application development, often never mention this yet it is a critical success factor for ensuring data stays secure over time. A second critical success factor is the need for data redundancy of systems and power sources, replication-based backup across multiple data centers in the event of a catastrophic loss. The recent events in Japan have made many companies re-evaluate their hosting and colocation agreements with cloud computing service providers, as today many companies run their entire selling and marketing strategies online (Lashar, 2009).

The drawback of data redundancy is also critically important and is defined within the Service Level Agreements (SLAs) that cloud computing and SaaS companies provide their client when they initially sign up for the service (Pamies-Juarez, Garcia-Lopez, Sanchez-Artigas, Herrera, 2011). Also defined in SLAs are the minimum levels of security which are provided with each account, whether it will be single- or multi-tenant, and whether or not the hosting company will provide for colocation of applications or blade servers in their rack mounted cabinets within the data centers (Hertzberg, 2010). While the university would not have to manage as many enterprise accounts, they would need to really pay attention to their SLAs with the cloud service providers and vendors to ensure they were getting the reliability, security, and performance they had paid for. SLAs are also at best an imperfect science right now, with the fallback remedies very expensive to pursue in contract arbitration (Hertzberg, 2010). Because of these apparent shortcomings and vague areas of SLAs many business are only putting those databases and applications that are the most easily automated online. These are the applications including corporate e-mail, Accounts Payable (AP), Accounts Receivable (AR), and CRM including sales force automation and contact management. In these lower end applications the university could save more on costs yet risk having a security breach that would open up all student grades, professor salaries, tenure track plans and many other highly confidential items of information.