Cloud Computing & Mitigating outsourcing risk

Question 1

What is cloud computing?

Answer 1

Cloud Computing is an IT service model where computing services (both hardware and software) are delivered on-demand to customers over a network in a self-service fashion, independent of device and location.

->cloud computing is the delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet (“the cloud”)

Question 2

What are the advantages of cloud computing?

Answer 2

o lower cost of entry for small companies and third-world countries
o almost immediate access to hardware resources with no upfront capital
o can lower IT barriers to innovation
o easier for enterprises to scale their services

Question 3

What is multitenancy

Answer 3

a single instance of an application software serves multiple clients

Question 4

What is scalability

Answer 4

the capacity to be changed in size or scale

Question 5

What is software-as-a-service (SAAS)

Answer 5

This refers to a cloud computing service that delivers software applications over the internet, typically on a subscription basis.
* e.g. Google Apps, GMail

Question 6

What is infrastructure-as-a-service (IAAS)

Answer 6

This refers to a cloud computing service that provides users with access to computing infrastructure, such as virtual servers, storage, and networking, over the internet.
e.g. Dropbox

Question 7

What is platform-as-a-service (PAAS)

Answer 7

facilitates the development and deployment of applications without the cost and complexity of buying and managing the underlying hardware and software layers
* e.g. Google App Engine

Question 8

Why does cloud computing often face resistance from the internal IT department?

Answer 8

• Fear of change in corporate IT culture
• Fear of job loss/being replaced/redundant -> 2/3 of It staffing budget goes to maintenance & service
• Security concerns -> losing control over data/security measures
• Lack of visibility -> clouds can make it difficult to monitor and troubleshoot issues that arise
• Cost concerns -> hidden costs, such as data transfer fees, or difficulty in accurately forecasting expenses

Question 9

When comparing on-premise and cloud computing what are the Ownership and control arguments?

Answer 9

Ownership and control:
* Cloud computing resources are owned and controlled by a third-party provider, while on-premise resources are owned and controlled by the organization
* With cloud computing, the organization is responsible for managing and securing their data and applications, while the cloud provider manages the underlying infrastructure
* With on-premise computing, the organization is responsible for managing and securing all aspects of their computing resources

Question 10

When comparing on-premise and cloud computing what are the Ownership and control arguments?

Answer 10

Ownership and control:
* Cloud computing resources are owned and controlled by a third-party provider, while on-premise resources are owned and controlled by the organization
* With cloud computing, the organization is responsible for managing and securing their data and applications, while the cloud provider manages the underlying infrastructure
* With on-premise computing, the organization is responsible for managing and securing all aspects of their computing resources

Question 11

When comparing on-premise and cloud computing what are the Cost arguments?

Answer 11

Cost:
* Cloud computing typically has a pay-per-use model, meaning organizations only pay for the resources they use
* On-premise computing typically requires a large upfront investment in hardware and software infrastructure, with ongoing maintenance costs
* Cloud computing can be more cost-effective for organizations with fluctuating resource needs, while on-premise computing may be more cost-effective for organizations with stable resource needs

Question 12

When comparing on-premise and cloud computing what are the Scalability arguments?

Answer 12

Scalability:
* Cloud computing resources can be easily scaled up or down depending on the organization’s needs
* On-premise computing resources can be more difficult and time-consuming to scale up or down, as hardware and software upgrades may be required

Question 13

When comparing on-premise and cloud computing what are the Accessability arguments?

Answer 13

Accessibility:
* Cloud computing resources are accessible from anywhere with an internet connection
* On-premise computing resources are typically only accessible from within the organization’s network
* During downtimes the organization is dependent on the provider while during on-premise computing they have it in their own hands

Question 14

When systematically comparing on-premise and cloud computing what are the Security arguments?

Answer 14

Security:
* Cloud computing providers typically have robust security measures in place to protect their infrastructure and customer data
* On-premise computing requires the organization to implement and maintain their own security measures

Question 15

Systematically compare cloud computing and on-premise computing. Is it true that
cloud computing is inferior to on-premise computing? What are the categories to compare?

Answer 15

• Ownership and control
• Cost
• Scalability
• Accessibility
• Security

Question 16

Can cloud computing be seen as a disruptive innovation?

Answer 16

• Disruptive innovation – transforms a product which could only be used by a privileged few into an affordable and accessible technology -> democratises the technology/product
• Yes, drives down prices and makes certain technologies accessible to a new market ->SME can now implement ERP-like systems/etc.

Question 17

What are the risks associated with IT outsourcing the development of information systems?

Answer 17

o strategic risks
- shirking, poaching, opportunistic renegotiation
- operational risks
- intrinsic risks of atrophy
- intrinsic risks of location

Question 18

What are strategic risks associated with outsorcing business processes?

Answer 18

Shirking, Poaching/Misuse of information, Opportunistic renegotiation/vendor holdup
(more important details in Word Sheet!)

Question 19

Discuss the mitigation mechanisms that can be employed to control strategic risks and their effectiveness

Answer 19

o Horizontal chunkification – describes what portion or fraction of each activity will be allocated to the client and what portion will be allocated to the vendor -> maintain two or more competing vendors
o Vertical chunkification – describes which activities will be allocated to the client and which will be allocated to the vendor -> dividing a process into nonoverlapping tasks that are assigned to different vendors to limit knowledge transfer
(More details on Word Sheet)

Question 20

What are the resources required to provide the requisite quality-of service levels in cloud computing?

Answer 20

• The resources required to provide the requisite quality-of service levels are:
• Shared
• dynamically scalable
• rapidly provisioned
• virtualized and released with minimal service provider interaction
• Users pay for the service as an operating expense without incurring any significant initial capital expenditure, with the cloud services employing a metering system that divides the computing resource in appropriate blocks.”
  ->cloud computing is the delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet (“the cloud”)