With so many sweeping changes over the horizon, the role of IS
researchers in the new environment cannot be stressed enough. If
organizations are to reap the full benefits of cloud computing, we
passionately believe that it is imperative for IS researchers, as the
experts and the thought leaders in the area, to be proactively involved
in every discussion surrounding the technology from its very outset.
As Agarwal and Lucas [1] note about the IS community, “our strength
as a scholarly community derives partly from our study of the firstorder,
second-order and third-order effects of IT that span multiple
functional areas and business processes” (p.390). With our background
in the underlying technology and the associated business
issues, IS researchers can bring forth a holistic perspective that has
often been lacking in many technology discussions. We also note that
while there is an impressive amount of literature on cloud computing
in computer science, there is still a dearth of literature in the IS area
that look at cloud computing. One of the goals of this paper is to start
that process by presenting a starting list of the various issues at the
intersection of the business and the technology involved in cloud
computing.
We pursue several objectives in the remainder of this paper. First,
from a practitioner's perspective, we strategically analyze the cloud
computing industry. Second, we identify the various stakeholders —
whether they are the providers of cloud computing or the consumers
and the regulators who have to deal with the technology. Third, and
perhaps most importantly, from an IS researcher's perspective, our
aim is to bring forth the issues that are likely to be important to these
stakeholders, and thereby suggest some of the research topics that we
should start exploring and be in a position to advise the community in
due course. In a bid to ensure that our prescription is not biased from
just one perspective, this group of authors consists of members from
the academia along with a senior executive from a software company
that is currently developing applications for some of the largest
players in the cloud computing arena. We also carried out in-depth
interviews with various industry executives, in order to get both a
cloud computing provider perspective as well as an enterprise user
perspective.6
5. Cloud computing — a SWOT analysis
5.1. Strengths
We covered much of the key benefits earlier in Section 2, and we
will therefore keep the discussion in this section restricted to ideas
that were not explored there. The ability to scale up services at a very
short notice obviates the need for underutilized servers in anticipation
of peak demand. When an organization has unanticipated usage
spikes in computing above its internally installed capacity, it has the
ability to request more computing resources on the fly. Cloud
computing offers organizations the ability to effectively use timedistributed
computing resources. One example is that of an internet
photo website Smugmug. The company has relatively stable computing
workloads throughout the year; however during the months of
December and January the required resources spike to five times the
usual workload. Cloud computing allows the company to meet the
excess requirements during the two months without incurring the
costs of hosting a traditional infrastructure for the rest of the year.
In 2000, over 45% of capital equipment budget was spent on IT,
however on average only 6% of the server capacity is utilized.
Assuming a 3-year lifespan of a server, the infrastructure and energy
costs alone exceed the purchase price of a server. Cloud computing
leads to reduced infrastructure costs and energy savings as well
reduced upgrades and maintenance costs. Economies of scale for
datacenters cost savings can lead to a 5- to 7-time reduction in the
total cost of computing [3].
One of the components of maintenance costs is the management of
technology, which is potentially made much simpler by using a cloud
computing service. Preset configuration of servers and virtual
machines can be put in place with appropriate applications, security,
and data. (With so much of personal computing moving to virtual
servers or to the cloud, it is perhaps no wonder that the market for
enterprise servers is expected to double by 2013 [8].) This allows for a
more secure environment with the company having better control of
the resources on their network. Cloud computing services allow an
organization to control when, where, and how employees have access
to the organization's computer systems, all managed over a simple
web-based interface (for example, Amazon Web Services (AWS) can
be managed easily through the AWS Management Console). Employees
like the arrangement too, since they are able to make full use of
the company's computer systems using less powerful devices such as
a smartphone or a netbook.
5.2. Weaknesses
There are many issues that need to be resolved before cloud
computing can be accepted as a viable choice in business computing.
As pointed out in the previous section, organizations will be justifiably
wary of the loss of physical control of the data that is put on the cloud.
Hitherto, providers have been unable to guarantee the location of a
company's information on specified set of servers in a specified
location. However, cloud computing service providers are rapidly
adopting measures to handle this issue. For example, Amazon Web
Services recently announced the Amazon Virtual Private Cloud that
allows a business to connect its existing infrastructure to a set of
isolated AWS compute resources via a VPN connection. To satisfy the
European Union data regulations, AWS now allows for companies to
deploy its SimpleDB structured storage physically within the EU
region. The Government Cloud product from Google that we alluded
to earlier is also a response to allay concerns from government entities
over the location of their data.
Large organizations will also be wary of entrusting mission-critical
applications to a cloud computing paradigm where providers cannot
commit to the high quality of service and availability guarantees that
are demanded in such environments. For example, Amazon Web
Services Service Level Agreement (SLA) currently commits to an
annual uptime percentage of 99.95% over the trailing 365 days, which
might be enough for most small- and medium-sized organizations,
but will be deemed insufficient for mission-critical applications for
large organizations. Even though many in-house IT services often fail
to live up to such uptime standards, such failures are not held up for
media scrutiny, unlike the much-publicized failures of prominent
cloud computing service providers.
5.3. Opportunities
One of the significant opportunities of cloud computing lies in its
potential to help developing countries reap the benefits of information
technology without the significant upfront investments that have
stymied past efforts. In fact, cloud computing might do to computing in
developing countries what mobile phones did to communications —
allow the governments and local firms to benefit from the effective use
6 On the provider side, we interviewed Ken Comee, the President and CEO of Cast
Iron Systems, a leading software provider today for SaaS application integration with
existing enterprise solutions; Bob Chung, Director of Microsoft Alliance, Full Armor, a
leading software and services company providing enterprise endpoint management
on various Windows platforms; and Krishna Kumar and Randy Guthrie, Developer
Evangelists at Microsoft Corporation. To get an enterprise-user perspective of cloud
computing, we interviewed Mike Manis, Vice President, Global Technology Shared
Services at Office Depot, one organization that has been in the vanguard of using
virtualization technologies. Our knowledge and understanding also benefited from
conversations with several other executives in the cloud computing industry who did
not want to be named for the purposes of this article. While we benefited enormously
from all these conversations, any opinion expressed in this document is entirely our
responsibility.
S. Marston et al. / Decision Support Systems 51 (2011) 176–189 181
With so many sweeping changes over the horizon, the role of IS
researchers in the new environment cannot be stressed enough. If
organizations are to reap the full benefits of cloud computing, we
passionately believe that it is imperative for IS researchers, as the
experts and the thought leaders in the area, to be proactively involved
in every discussion surrounding the technology from its very outset.
As Agarwal and Lucas [1] note about the IS community, “our strength
as a scholarly community derives partly from our study of the firstorder,
second-order and third-order effects of IT that span multiple
functional areas and business processes” (p.390). With our background
in the underlying technology and the associated business
issues, IS researchers can bring forth a holistic perspective that has
often been lacking in many technology discussions. We also note that
while there is an impressive amount of literature on cloud computing
in computer science, there is still a dearth of literature in the IS area
that look at cloud computing. One of the goals of this paper is to start
that process by presenting a starting list of the various issues at the
intersection of the business and the technology involved in cloud
computing.
We pursue several objectives in the remainder of this paper. First,
from a practitioner's perspective, we strategically analyze the cloud
computing industry. Second, we identify the various stakeholders —
whether they are the providers of cloud computing or the consumers
and the regulators who have to deal with the technology. Third, and
perhaps most importantly, from an IS researcher's perspective, our
aim is to bring forth the issues that are likely to be important to these
stakeholders, and thereby suggest some of the research topics that we
should start exploring and be in a position to advise the community in
due course. In a bid to ensure that our prescription is not biased from
just one perspective, this group of authors consists of members from
the academia along with a senior executive from a software company
that is currently developing applications for some of the largest
players in the cloud computing arena. We also carried out in-depth
interviews with various industry executives, in order to get both a
cloud computing provider perspective as well as an enterprise user
perspective.6
5. Cloud computing — a SWOT analysis
5.1. Strengths
We covered much of the key benefits earlier in Section 2, and we
will therefore keep the discussion in this section restricted to ideas
that were not explored there. The ability to scale up services at a very
short notice obviates the need for underutilized servers in anticipation
of peak demand. When an organization has unanticipated usage
spikes in computing above its internally installed capacity, it has the
ability to request more computing resources on the fly. Cloud
computing offers organizations the ability to effectively use timedistributed
computing resources. One example is that of an internet
photo website Smugmug. The company has relatively stable computing
workloads throughout the year; however during the months of
December and January the required resources spike to five times the
usual workload. Cloud computing allows the company to meet the
excess requirements during the two months without incurring the
costs of hosting a traditional infrastructure for the rest of the year.
In 2000, over 45% of capital equipment budget was spent on IT,
however on average only 6% of the server capacity is utilized.
Assuming a 3-year lifespan of a server, the infrastructure and energy
costs alone exceed the purchase price of a server. Cloud computing
leads to reduced infrastructure costs and energy savings as well
reduced upgrades and maintenance costs. Economies of scale for
datacenters cost savings can lead to a 5- to 7-time reduction in the
total cost of computing [3].
One of the components of maintenance costs is the management of
technology, which is potentially made much simpler by using a cloud
computing service. Preset configuration of servers and virtual
machines can be put in place with appropriate applications, security,
and data. (With so much of personal computing moving to virtual
servers or to the cloud, it is perhaps no wonder that the market for
enterprise servers is expected to double by 2013 [8].) This allows for a
more secure environment with the company having better control of
the resources on their network. Cloud computing services allow an
organization to control when, where, and how employees have access
to the organization's computer systems, all managed over a simple
web-based interface (for example, Amazon Web Services (AWS) can
be managed easily through the AWS Management Console). Employees
like the arrangement too, since they are able to make full use of
the company's computer systems using less powerful devices such as
a smartphone or a netbook.
5.2. Weaknesses
There are many issues that need to be resolved before cloud
computing can be accepted as a viable choice in business computing.
As pointed out in the previous section, organizations will be justifiably
wary of the loss of physical control of the data that is put on the cloud.
Hitherto, providers have been unable to guarantee the location of a
company's information on specified set of servers in a specified
location. However, cloud computing service providers are rapidly
adopting measures to handle this issue. For example, Amazon Web
Services recently announced the Amazon Virtual Private Cloud that
allows a business to connect its existing infrastructure to a set of
isolated AWS compute resources via a VPN connection. To satisfy the
European Union data regulations, AWS now allows for companies to
deploy its SimpleDB structured storage physically within the EU
region. The Government Cloud product from Google that we alluded
to earlier is also a response to allay concerns from government entities
over the location of their data.
Large organizations will also be wary of entrusting mission-critical
applications to a cloud computing paradigm where providers cannot
commit to the high quality of service and availability guarantees that
are demanded in such environments. For example, Amazon Web
Services Service Level Agreement (SLA) currently commits to an
annual uptime percentage of 99.95% over the trailing 365 days, which
might be enough for most small- and medium-sized organizations,
but will be deemed insufficient for mission-critical applications for
large organizations. Even though many in-house IT services often fail
to live up to such uptime standards, such failures are not held up for
media scrutiny, unlike the much-publicized failures of prominent
cloud computing service providers.
5.3. Opportunities
One of the significant opportunities of cloud computing lies in its
potential to help developing countries reap the benefits of information
technology without the significant upfront investments that have
stymied past efforts. In fact, cloud computing might do to computing in
developing countries what mobile phones did to communications —
allow the governments and local firms to benefit from the effective use
6 On the provider side, we interviewed Ken Comee, the President and CEO of Cast
Iron Systems, a leading software provider today for SaaS application integration with
existing enterprise solutions; Bob Chung, Director of Microsoft Alliance, Full Armor, a
leading software and services company providing enterprise endpoint management
on various Windows platforms; and Krishna Kumar and Randy Guthrie, Developer
Evangelists at Microsoft Corporation. To get an enterprise-user perspective of cloud
computing, we interviewed Mike Manis, Vice President, Global Technology Shared
Services at Office Depot, one organization that has been in the vanguard of using
virtualization technologies. Our knowledge and understanding also benefited from
conversations with several other executives in the cloud computing industry who did
not want to be named for the purposes of this article. While we benefited enormously
from all these conversations, any opinion expressed in this document is entirely our
responsibility.
S. Marston et al. / Decision Support Systems 51 (2011) 176–189 181
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