Week 5 Flashcards
Cloud Computing
Cloud Computing - refers to placing computing resources either an organizations or individuals hardware or software - with computing resources over the internet
History of cloud computing
1960;s - McCarthy wrote that computation may someday by organized as a public utility
1990 - grind computing which is a way for making computing power as easy to access as an electric power grid
1997 - ‘cloud computing’ was defined by information systems professor Ramnath Chellappa organizations started switching
1999 - salesforce introduced business model via website
2009 - revenue for cloud services over $58.6B
2 categories of cloud computing
2 categories of cloud computing
1) software as a service (SaaS)
2) utility computing
Category of cloud computing: Software as a Service (SaaS)
Category of cloud computing: Software as a Service (SaaS) - an organization or individual subscribes to a 3rd party software replacing service that is delivered online
Category of Cloud Computing - Utility Computing & Platform as a Service, Infrastructure as a Service
Utility Computing - an organization develops its own software and then runs it over the Internet on a service providers computers
Platform as a Service (PaaS) - delivers tools so the organization can develop, test, and deploy software in a cloud
Infrastructure as a Service (IaaS) - offers a more bare-bones set of services that are an alternative to the organization buying its own physical nature
SaaS vs PaaS vs IaaS
SaaS - providers allow the customer to access the providers applications running on a cloud infrastructure
- USER: the user consumes these cloud services through the user’s browsers
PaaS - providers take care of the underlying infrastructure and provide the tools required to build applications
- USER: depending on the PaaS provider, users have the ability to deliver applications only to employees within the enterprise
IaaS - providers manage the clients processing, storage, networks, and other fundamental computing resources
- USER: clients can select their own operating systems, development environments, underlying applications like databases or other software packages
what big 3 cloud computing companies dominate
big 3 cloud computing companies that dominate:
- Amazon Web Services (AWS)
- Microsoft Azure
- Google Cloud
Function of Cloud Computing
Function of cloud computing - some organizations and developing their own private clouds - pools of computing reosurces that reside inside the organization and that can be served up for specific tasks as need arrives
The evolution of cloud computing has huge implication across the industry
The evolution of cloud computing has huge implication across the industry:
- Financial future of hardware and software finds
- Cost structure and innovativeness of adopting organizations
- Skills set likely to be most valued by employees
How SaaS providers price services to customers
Think: Information & Product
Most SaaS provides their service via a usage-based pricing model similar to a monthly subscription
Other SaaS firms:
- offer free services that are supported by advertising
- promote the sale of upgraded premium versions for additional fees
Financial benefits of SaaS to Corporate customers
Financial benefits of SaaS to Corporate customers
- corporate customers do not incur the large upfront costs of buying and implementing software backing
- SaaS reduces the costs incurred by the corporate customer for IT-staff needed to run on premises systems
- SaaS costs vary on a per user basis, which provides flexibility to scale up/down as staffing levels change
- Small firms like startups gain access to sophisticated systems that they otherwise wont be able to afford
Customer benefit from highly scalable SaaS offerings
Customer benefit from highly scalable SaaS offerings:
- without SaaS, customers have to buy enough computing capacity to handle the heaviest anticipated workload
- workloads are difficult to predict and if the difference between high workloads and average use its great, a lot of expensive computer hardware will spend most of its time doing nothing
- with SaaS, the service provider is responsible to ensure that systems meet fluctuation in customer demand
What are some other benefits for SaaS corporate customers
Other benefits for SaaS corporate customers:
- Faster deployment times than implementing on premises software’s
- Potentially gain access to higher quality and service levels since the SaaS provider has expertise
- Remote access and availability to users with an internet connection, providing truly global opportunities
What are some risks of SaaS
Some risks of SaaS are:
- dependence on a single vendor
- concern about long-term viability of partner firms
- users may be forced to mitigate to new versions (ex. training cost)
- reliance on network connection which may be slower and less secure
- data assets stored off-site with potential for security and legal concerns
- limited configuration, customization, and system integration options compared to package software or alternatives developed in house
- user interface of web-based software is less sophisticated and lacks the richness of most desktop alternatives
- ease of adoption may lead to pockets of unauthorized IT being used throughout an organization
How do SaaS companies develop value prop
To develop a value proposition, SaaS providers:
- develop, test, deploy, and support one version of the software executing on its own servers
- often have data centers that are designed to pool and efficiently manage computing resources, often located in warehouse-style building designed for computers
- regularly handle backups deploy upgrades and buy fixes and deal with the continual burden of security maintenance
- provide access to the software through direct sales and distribution channels using the internet and end-user devices
How do SaaS providers capture value
SaaS providers capture value by:
REVENUE STREAM:
- steady stream through a usage-based revenue model similar to a monthly subscription
- since its almost impossible to copy the service, SaaS providers do not experience lost revenue to software piracy
COST STRUCTURE:
- development is limited to a single platform, so SaaS providers benefit from economies of scale that lowers software and hardware costs
- SaaS providers use direct channels and the internet, meaning lower sales and distribution costs than traditional software firms
Platform as a Service (PaaS)
Platform as a Service (PaaS) - cloud providers offer services for customers to build their own applications on the providers infrastructure
ex. services include: hardware, operating system, tools, and hosting
Infrastructure as a Service (IaaS)
Infrastructure as a Service (IaaS) - cloud providers offer services that include running the remote hardware, storage, and networking
- client organizations can choose the software used which makes it a good alternative for firms that want more control
Motivation for PaaS and IaaS services
Motivation for PaaS and IaaS services
Sometimes for an organization develops its down software but want to pay someone else to run it for them - its what motivates users of the PaaS or IaaS cloud offerings
- hardware and software exists in the cloud
- organization only pays for the amount of processing, storage, and telecommunications that it uses
- cloud vendors host the organizations softwares on their systems
- customers only pay for what they use
what are some customer challenges with PaaS and IaaS
Customer challenges
-hard challenge
- need to do much financial analysis (ex. costs can add up)
- cloud vendor fails = organization fials
how does the cloud computing change the tech industry
cloud computing changes the tech industry
- alters the margin structure
- accelerate innovation
- changes desired sales mix and job outlook
- enables organizations to spend less on hardware infrastructure
- huge investments required: server farm
Server Farm
Server Farm - massive network of computer servers running software to coordinate their collective
what does it take to run a server farm
what it takes to run a server farm:
Accommodate instillations needed for cloud computing
- cheap load
- low-cost power
- ultrafast fiber-optic connections
- mild climates
Corporate Cloud
Companies that provide cloud services enable users to store files and applications on remote servers and then access all the data via the Internet. This means the user is not required to be in a specific place to gain access to it, allowing the user to work remotely.
