Cloud Computing PDF

PRITAM DEY
CLOUD COMPUTING
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Cloud Computing
1st edition
© 2015 Pritam Dey & bookboon.com
ISBN 978-87-403-0990-4

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CLOUD COMPUTING Contents
CONTENTS
1 Introduction to Cloud Computing 6
1.1 What is Cloud Computing? 6
1.2 Cloud Computing History 9
1.3 Types of Cloud Computing 10
1.4 Benefits and Challenges 13
2 How Does Cloud Computing Work? 15
3 Cloud Computing Landscape & Value Drivers 19

3.1 Cloud Value Proposition 19
3.2 Cloud Computing Value Chain 19
3.3 Predicted Market Growth 20
3.4 Competitive Landscape 22
3.5 Cloud Computing Adoption Factors 22
4 Cloud Computing Business Case 24
5 Cloud Computing Reference Architecture 26
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CLOUD COMPUTING Contents
6 Cloud Computing Maturity Model 30
7 Cloud Computing Pricing Model 33
8 Cloud Computing Return on Investment (ROI) 37
9 Is Cloud Computing Right Fit For Your Organization? 40
10 Cloud Computing Adoption Roadmap 42
11 Public Cloud Migration Requirements 45
12 Implementation Challenges 47
13 Public Cloud Service Provider Selection Model 49
14 Cloud Readiness Assessment Questionnaire 51
15 Next Generation Cloud Computing 52
16 Top Questions to Ask Yourself Before Adopting Cloud Computing 57
17 Top Questions to Ask Your Cloud Service Provider 58
18 References 60

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CLOUD COMPUTING Introduction to Cloud Computing
1 INTRODUCTION TO
CLOUD COMPUTING
1.1 WHAT IS CLOUD COMPUTING?
Cloud computing is ubiquitous. It is the most talked about topic nowadays. Businesses
talk about adopting cloud software and solutions to reduce operational cost. We use emails
which are stored somewhere in a remote location. We upload our pictures to a website that
stores them in cloud storage (e.g. iCloud). Our files are stored in Amazon Cloud drive. Our
videos are uploaded to YouTube. In today’s world, it is tough to imagine a scenario where
cloud computing has not touched our lives. So what exactly is cloud computing?
Cloud computing is a term used to signify a way of accessing software, infrastructure,

and computing power from a location other than our own. The resources usually reside in
someone else’s computer or distant data centres. Nowadays the reach of cloud computing
is so vast that the resources are located in a different country and continent that often we
have no clue of the exact location. Think of the emails in your Gmail inbox. The emails
do not reside in our computers. Google serves these emails from the servers that reside in
any of the data centres located in Americas, Asia, or Europe.
Another simple way to explain Cloud concept is through the example of ordering food. In
the absence of a Cloud model, you would typically have a kitchen in your house where you
will prepare your food. This entails a number of financial and non-financial implications.
There are costs involved to maintain the kitchen, procure groceries to prepare the food, pay
for utility expenses, etc. The non-financial factors are the time involved to prepare the food,
cleaning the kitchen, maintaining hygienic conditions, etc. In essence, there is an overhead
involved in running your own kitchen. But what if you could just buy the food you need
without going through the hassle of cooking? You could either buy the food from the store
or order by calling the restaurant. You are least bothered about where the food is prepared
and what costs are entailed in the process. The kitchen is hosted in some location. All you
care is the delivery of quality food at right time and price. You only pay for the service
(in this case, food) you consume. The Cloud model works on the same concept. You pay
for the IT service you use; the infrastructure which provides the service is not located in
your premise. It is hosted and managed by a third party. The nitty-gritties of the host are
unknown to you. This ‘unknown’ is diagrammatically represented as a ‘cloud’.

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Where did Cloud computing get its name from? If you remember the IT network diagrams,
the internet is often represented as a cloud pictorially as shown below.
The cloud icon is like the proverbial “black box” that makes the internet work. We don’t
know that it contains but it serves our purpose. Since it is owned and managed by someone
else, why diagram it out its details? Therefore the cloud computing concept, in all likelihood,
may have been derived from this notion. A more elaborated Cloud computing structure is
shown here.
Source: Wikipedia
All the elements inside the cloud – applications, platform, and infrastructure – are oblivious
to the end users. All the users need is the access devices such as laptops, phones, tablets, etc.
and network connectivity to the cloud that is mostly provided by Cloud service providers.
Let us look at some of the popular definitions of Cloud computing.

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Cloud computing is the delivery of computing as a service rather than a product, whereby
shared resources, software, and information are provided to computers and other devices as
a utility (like the electricity grid) over a network (typically the Internet).
– Wikipedia
Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access
to a shared pool of configurable computing resources (e.g., networks, servers, storage,
applications, and services) that can be rapidly provisioned and released with minimal
management effort or service provider interaction.
– The National Institute of Standards and Technology (NIST)
“Cloud Computing”, by definition, refers to the on-demand delivery of IT resources and

applications via the Internet with pay-as-you-go pricing.
– Amazon
…the practice of using a network of remote servers hosted on the Internet to store, manage,
and process data, rather than a local server or a personal computer.
– Google
According to NIST, the cloud computing model is composed of five essential characteristics,
three service models, and four deployment models.
Characteristics Service Models Deployment Models
• On-demand self-service
• Software as a Service (SaaS) • Public Cloud
• Broad network access
• Platform as a Service (Paas) • Private Cloud
• Resource pooling
• Infrastructure as a Service • Community Cloud
• Rapid elasticity
(IaaS) • Hybrid Cloud
• Measured service

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1.2 CLOUD COMPUTING HISTORY

Cloud computing is the result of evolution of a number of key technology concepts such
as virtualization, grid computing, multi-tenancy, scalability, and the exponential increase in
computing power and storage.
Even though the origin of cloud computing is not exactly known, the analogy of cloud
computing has been existed since 1950s when mainframe computers became available to
perform high-volume computing processing. Mainframes were costly and bulky to use.
Therefore to make more efficient use of them, a practice evolved that allowed a number of
thin clients (or static computer terminals) to share the computing power of mainframes.
And this is how “resource pooling” and “time-sharing” – key terms associated with cloud
computing – came into common parlance.
The 1990s saw telecommunication service providers using virtual private network (VPN) to
manage their network bandwidth effectively. Depending on the demand load, they would
switch the traffic to the available servers. This process happened at the infrastructure and data
centre level without the users being aware of it. The telecommunication service providers
began to use the cloud symbol to demarcate the boundary between the network service
providers and the users. In other words, it is akin to saying to end users, “You do not need
to know where and how you get the network bandwidth as long as it is available to you
uninterrupted. Leave it to us.” In essence, this is where the concept of Infrastructure-as-a-
Service took roots.
The decade of 2000s saw the actual emergence and evolution of Cloud computing to its
present form. Scientists and technologists explored ways to extend Cloud computing beyond
applications and platforms. Technology companies made major breakthroughs in their Cloud
products and services. This decade saw the introduction and popularization of “pay-as-you-
go” pricing model. Gartner predicted that Cloud computing would change the relationship
between consumers and providers of IT services. It also observed that “organizations are
switching from company-owned hardware and software assets to per-use service-based models”
so that the “projected shift to computing…will result in dramatic growth in IT products
in some areas and significant reductions in other areas.”

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Major cloud technology innovations were made in this decade. In 2008, OpenNebula
came out with open-source software for deploying private and hybrid clouds. In 2008,
Rackspace – another major player in Cloud space – launched OpenStack, an open-source
cloud software. In 2011, IBM launched SmartCloud framework to support Smarter Planet.
Companies such as Microsoft, Amazon, and Oracle also came out with your own Cloud
products and services. Today most of the technology companies have some presence in the
Cloud market space.
Today Cloud computing has become so ubiquitous that people are no longer talking about the
potential or implementation-challenges of Cloud. The talk of the town is how Cloud platforms
can be used for the next generation innovations such as Big Data, Internet of Things, Mobility,
Analytics, Digitization, and Advanced Research. By removing the overhead of CAPEX, Cloud
has made possible for innovators to use ready-made technology platform to test and roll-out
their ideas quickly. In other words, it has reduced the time-to-market of ideas.
1.3 TYPES OF CLOUD COMPUTING
Cloud Service Models Examples/

Providers
Infrastructure-as- This is the most basic cloud service model Amazon web
a-Service (IaaS) where providers provide hardware capacities services, Rackspace,
by demand. Key services provided are: virtual Cloud Scaling,
machines, servers, storage, load balancers, Eucalyptus
network, firewalls, IP addresses, virtual local area Systems, HP
networks (VLANs). Users are billed according to
the amount of resource allocated and consumed.
Platform-as-a- Cloud providers provide a computing Amazon web

Service (PaaS) platform to build applications without the services, Google
need to buy hardware or software licenses. App Engine,
Typical services provided are: Operating Salesforce.com,
System, Execution runtime environment, Openstack,
database, web server, development tools. Rightscale
Software-as-a- SaaS providers provide users access to Salesforce.com,

Service (SaaS) application software and databases without Oracle On Demand,
the need to install on their devices. Cloud AppDynamics,
service providers manage the infrastructure Microsoft Office 365
and platforms that run the applications. This
is usually priced on a pay-per-use basis.

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Unified In this model, multi-platform communications over Telesphere,

Communications the network are packaged by the service provider. Verizon, AT&T,
as a Service The services could be in different devices, such Microsoft, Cisco
(UCaaS) as computers and mobile devices. Services
may include IP telephony, unified messaging,
video conferencing and mobile extension.
TelePresence as Providers provide Telepresence as a service. TeleSpace

a Service (TPaaS)
Contact Center as Providers provide Contact Centre services Cisco HCS,

a Service (CCaaS) such as interactive voice response, email, Metro CSG
web and real-time chat as a service.
Cloud Deployment Models
Private Cloud Cloud infrastructure dedicated to a single HP, Cisco Systems,

customer (or organization), managed internally or Microsoft
by a third-party, and hosted internally or externally
Public Cloud Cloud infrastructure resources shared by multiple Salesforce.com,

customers. The services are rendered over the Amazon, Microsoft,
internet, and offered on pay-per-usage model. Oracle, Google
Hybrid Cloud Hybrid cloud is a combination of private, public IBM, VMware,

and community cloud services. These services Rackspace,
could be from different service providers. HP, Expedient,
Eucalyptus
Community Cloud Cloud infrastructure dedicated Cloudian, CFN

to a group of customers. Services
Distributed Cloud Cloud computing provided by a distributed Amazon, Microsoft,

set of machines that are running at Google
different locations, while still connected
to a single network or hub service.
Intercloud Interconnected global “cloud of clouds” Cisco
Multicloud Multicloud refers to multiple cloud services that

could be running in a single heterogeneous
architecture. Multicloud is mostly used to reduce
dependence on single vendor, and spread
the risk across multiple service providers.
A figurative representation of the above table is depicted below.

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Business Integration SaaS
Software Development Platform PaaS
Computin Storage Computin

IaaS
Hardware / Operating System
Unified Communications Services UCaaS
Tele Presence Services TPaaS
Contact Center Services CSaaS

Public Hybrid Private
A clear segregation of each Cloud computing layers is shown here. At the top is the business
and application services that are provided by SaaS layer. If an organization decides to develop
the software in-house but does not have the necessary development platform, it can opt for
PaaS. PaaS provides the platform to develop application software. The application software
needs servers (for computing power), storage, and Operating System. These can be procured
through IaaS. The network and communication services are provided through models such
as UCaaS, TPaaS, and CSaaS.
The economies of scale are increasingly achieved as we move from Private to Public cloud
model as the infrastructure is shared with a large pool of consumers.

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1.4 BENEFITS AND CHALLENGES

Cloud computing offers multiple benefits. Some of the top reasons companies are adopting
cloud are:
• Cost effective: Cloud computing services help in cost savings because you pay only
for what you consume. The additional overheads of maintaining CAPEX is removed.
• Ease of implementation: Cloud services are easy to procure and implement. All
you need is a subscription to the cloud services and network connectivity to the
cloud. The cloud service provider is responsible for the installation, upkeep and
maintenance of the cloud environment.
• Secure & Reliable: Cloud services are generally considered to be secure and reliable
as long as extremely sensitive data is not hosted on cloud.
• Flexibility & Scalability: One of the biggest benefits of cloud is that it is highly
flexible and scalable. One can scale up the computing requirements based on the
business demand. And if you no longer need the service, you can scale down the
usage too.
• Interoperability: Cloud interoperability means the ability of applications to move
from one cloud environment to the next (e.g. switching between public and private
cloud), or the ability of applications running in different clouds to share information.
Nowadays customers can use the same management tools with variety of cloud
computing platforms and providers.
Cloud computing comes with its own sets of challenges and pitfalls.
• Security: One of the biggest challenges of cloud computing is its perceived security
risks. There is a general notion that anything hosted on cloud is not safe and secure;
they are vulnerable to hackings and data compromise.
• Data Governance: If the data is stored on cloud servers, the enterprise may not
be accurately aware of the physical location of the servers. Therefore it becomes
extremely challenges to provide data governance. Another point of debate is who
owns the data stored in cloud. Is it the cloud service providers or the cloud service
consumers? The cloud service providers may demand significant extra service fee
to return the date to the organizations.
• Multi-tenancy: If the same cloud environment is used as multi-tenancy (sharing of
cloud infrastructure/applications by multiple organizations), security and privacy
comes a major concern for organizations.

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• Data Privacy and Integrity: As users, we are mostly concerned with data privacy.
How do we know that our sensitive personal information is not sold by the cloud
service provider to a third-party?
• Regulatory compliance: Nowadays regulations require that sensitive corporate or user
data cannot be stored in a cloud environment hosted in a different country. There are
compliance challenges around data location or cloud security policies. Privacy laws,
Payment Card Industry (PCI) requirements, or financial reporting laws are some of
the compliance requirements that organizations need to abide by.
• Disaster Recovery: It is a concern of enterprises about the resiliency of cloud
computing as data may reside in multiple servers and geographical locations. In such
a situation, what is the disaster recovery plan if any of the servers go down? What
if we lose data at a point in time due to server failure? Organizations therefore are
extremely concerned on the disaster recovery plan.
Listed above are just few of the benefits and challenges. We will uncover more of them as
we proceed in the next chapters.
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CLOUD COMPUTING How Does Cloud Computing Work?
2 HOW DOES CLOUD

COMPUTING WORK?
The underlying tenet of Cloud Computing is that capabilities are delivered as a service.
As mentioned earlier, Cloud computing model is created so that customers pay only for
usage; not for investment in hardware, software licenses, upgrades, maintenance fees, and
man-power cost to run the service in-house. A major reason for this shift is the increasing
commoditization of IT. Internet has become cheaper and available everywhere, cost of IT
platforms have reduced substantially, hardware could be commoditized, storage has become
cheaper (for the same price, one can buy bigger storage capability – thus justifying Moore’s
Law), virtualization technologies have become common and affordable, increasing adoption
of open source software, abstraction for the users, and lastly increased standardization of
IT. Additionally there has been a constant pressure to cut IT costs (largely because in most
organizations, IT is still a cost centre rather than a profit centre).
From an architectural standpoint, Cloud computing includes dynamic delivery of capabilities

(or services) in the form of applications (Software as a Service), Platform services (Platform
as a Service), and Infrastructure services (Infrastructure as a Service).
Figure – Cloud Computing Architecture Overview

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Cloud service provides expose these services mostly through a web interface. All the consumers
need to do is have a stable internet connect, and subscribe to these services. Basically they
are leasing the services and return them when they no longer need them.
From a cloud service provider point of view, Cloud Computing provisioning is made
capable through major architectural innovations. Multi-tenant architecture helped providers
to use the same infrastructure to provide services to multiple consumers. Multi-tenancy is
fundamental to both public and private clouds; it applies to all three layers of a cloud:
Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service
(SaaS). Multi-tenancy is the fundamental technology that providers use to share IT resources
with multiple applications and tenants (businesses, organizations, etc.) This enables the
providers to spread the CAPEX across multiple consumers, thus driving down the cost of
cloud services. According to an article on Multi-tenancy in Computerworld, Salesforce.
com, for example, supports 72,500 customers who are supported by 8 to 12 multi-tenant
IaaS/PaaS instances in a 1:5000 ratio. In other words, each multi-tenant instance supports
5,000 tenants who share the same database schema.
The second architectural characteristic of cloud computing is the increasing portability

and interoperability between in-house applications and cloud solutions. “Portability and
interoperability relate to the ability to build systems from re-usable components that will
work together “out of the box”, as per The Open Group. The most common kinds of cloud
computing portability are data portability, application portability, and platform portability.
Data portability enables re-use of data components across different applications. Application
portability enables the re-use of application components across cloud PaaS services and
traditional computing platforms. Platform portability enables re-use of platform components
across cloud IaaS services and non-cloud infrastructure, and re-use of bundles containing
applications and data with their supporting platforms. Interoperability provides the ability
to have different application components deployed on one platform communicate with
similar application components deployed on different platforms. For example, an application
deployed in-house in a traditional IT setup may communicate with another component
deployed in a hybrid cloud or one deployed on private cloud. This aspect of portability and
interoperability is critical to cloud computing success.

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The third major architectural innovation in Cloud computing is virtualization. In simple

terms, virtualization is the capability that separates physical infrastructure to create multiple
dedicated resources. “Virtualization software makes it possible to run multiple operating
systems and multiple applications on the same server at the same time,” said Mike Adams,
director of product marketing at VMware, a pioneer in virtualization and cloud software and
services. “It enables businesses to reduce IT costs while increasing the efficiency, utilization
and flexibility of their existing computer hardware.” The technology behind virtualization
is known as a virtual machine monitor (VMM) or virtual manager, which separates
compute environments from the actual physical infrastructure. Virtualization separates the
physical infrastructure, and cloud computing builds on that separation. The key benefits
of virtualization are it helps to maximize infrastructure resources, provides multi-tenancy
capability, and better rationalization of IT costs. Virtualization provides the basic building
blocks to enhance agility and flexibility. So much so that businesses and organizations who
are thinking of moving to cloud are advised to fully implement and leverage the virtualization
capability in their IT environment.
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Figure – Virtualized Cloud Model

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The fourth architectural aspect of Cloud computing is load-dependent scalable architecture.

Note the unique selling proposition of Cloud is its ability to scale based on demand. By
definition, scalability is the ability of computer solution (software or hardware) to continue
to function well and efficiently irrespective of the load on its infrastructure. It should
provide the same performance and Quality of Service (QoS). This is usually made possible
by using several servers and distributing the load between them according to the demand.
This is typically done by Load Balancers that do the necessary scaling. Load Balancers
provide the aggregation of new servers to distribute the load among several servers. Similar
to server scalability, there is also network scalability. Network scalability allows bandwidth-
provisioned network pipes and other network resources to handle the sudden increase in
network bandwidth.

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CLOUD COMPUTING Cloud Computing Landscape & Value Drivers
3 CLOUD COMPUTING LANDSCAPE

& VALUE DRIVERS
3.1 CLOUD VALUE PROPOSITION
The adoption of Cloud computing has proved to be a significant value driver by addressing
key concerns of CIOs/CTOs. Cloud computing has brought in much-needed resiliency,
availability, and optimum usage of existing IT infrastructure. It is able to scale up to the
increasing demand for servers & storage space by optimally utilizing the IT infrastructure.
This is accomplished by building in much-needed redundancy in the infrastructure landscape
by quickly provisioning for additional hardware/storage requirements from Cloud service
provider. At the same time by using server consolidation and virtualization features of
existing infrastructure, Cloud computing is able to increase the ROI of the infrastructure.
This leads to reduced Total Cost of Ownership (TCO).
3.2 CLOUD COMPUTING VALUE CHAIN

An understanding of cloud computing value chain is needed to grasp the potential of the
cloud computing opportunities in markets, and in which space major cloud players play
their game. The traditional linear value chain for IT services starts from consulting, and
extends to design, implementation, and operation/maintenance of IT infrastructure and
applications. The same value chain model can be applied to cloud computing business.
At the top of the value chain, we have the cloud advisory services and System Integration.
The next layer is the service delivery, application management, service brokering, and
customer support. This is the space where SaaS providers & system integrators focus on. The
cloud applications are built on Cloud platform and Application services – the domain of
PaaS & SaaS providers. The bottom layer is occupied by Infrastructure & Hosting services.
This is where major IaaS hardware vendors such as Dell, HP, IBM, Oracle, etc. dominate
the market. The last mile – network connectivity layer – is left to Telcos, ISPs and HW
vendors to service.

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Figure: Cloud Computing Value Chain
Because of the segregation of capabilities at each step of the Cloud computing value chain,
a number of new, innovative and independent players have entered the market choosing
the segment where they are likely to achieve competitive advantage. They are able to launch
their IT service offerings on the market with minimal capital expenditure and controllable
operating costs. This resulted in a rich ecosystem of IT service providers who choose to
play at any step of the value chain according to their capabilities and long term strategies.
3.3 PREDICTED MARKET GROWTH

According to Gartner, the overall cloud computing market size is expected to touch $220
billion by 2016.
Figure: Public Cloud Services Market by Segment, 2010–2016 (Gartner)

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From Cloud services standpoint, a significant amount of growth is expected in Cloud

Infrastructure Services. Gartner’s Public Cloud Services Forecast predicts that IaaS is expected
to grow at 41.7 percent CAGR between 2011 and 2016, followed by PaaS at 26.6 percent
and SaaS at 17.4 percent.
Figure: High Growth Expected in Cloud Infrastructure Service (Gartner)
According to Research and Innovation Estimates, the Cloud computing spending is forecast
to grow at a rate of 36.6 percent during 2008–13 to $55.2 billion in 2013–14. By 2020,
the percentage of on premise spending replaced by cloud computing is likely to be 14.5
percent – up from 0.36 percent in 2008.

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3.4 COMPETITIVE LANDSCAPE

More than a technical solution, Cloud computing has brought in tremendous changes in
the way of doing business. Since cloud computing is built on a dynamic environment where
the cloud service is expected to be provided on-demand, self-provisioning, and pay-as-you-
use model, it opened up a plethora of opportunities for players in the market to offer new
ways of doing business, offering services in new ways, and making the supply chain more
integrated and cohesive.
The advent of Social, Mobility, and Analytics, combined with the power of Cloud computing,
has made the world heavily connected. This connectivity has led to emergence of new
companies that develop new applications, services, and the next generation of platforms.
Apart from the traditional Cloud Service providers, the competitive landscape is gradually
bringing into its fold new players in the markets. The competitive advantage may be shifting
from traditional players who concentrated on offering infrastructure capability to new players
who offer infrastructure, application, and data services on cloud. In coming days, we will
increasingly witness the co-existence of traditional Cloud players (such as Oracle, HP, or
Dell) with non-infrastructure players (such as Amazon and Google). We are going to see
a new and constantly-evolving battleground in Cloud computing competitive landscape.
3.5 CLOUD COMPUTING ADOPTION FACTORS

There have been host of factors that led to the increasing adoption of Cloud computing.
The primary reason for the rapid increase in Cloud adoption is the growth in demand for
virtual machines, memory, and storage. According to a study conducted by Verizon in 2013,
the use of cloud-based storage has increased by 90 percent during the time period studied
(January 2012 and June 2013), and cloud-based memory by 100 percent; this has been
driven largely by the shift of business-critical applications to the cloud.
Another key factor is the independence the firms get from investing in capital expenditure
for costly IT infrastructure. The pay-as-you-go model provides the much needed economic
flexibility to invest solely based on business demand. The overhead of procuring, implanting,
operating, maintaining, and upgrading of the infrastructure frees up the bandwidth of the
firms which can be better utilized for core business activities.

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The other factor that led to the growth in adoption of cloud computing is the declining
cost over the years. Due to the network effect (declining per unit cost with growth in the
number of consumers), the cost of Cloud technology has been significantly coming down.
Firms have the bargaining power to procure right solution and services at a price affordable
to them. They also have the upper-hand to negotiate on the right Service Level Agreements
(SLAs) advantageous to them.
Another factor is the availability of cloud skills in the market. Early adopters of Cloud faced
significant challenges in implementation and support. The lack of adequate consultants with
right skills and the limited support capability of Cloud service providers had led CIOs to
spend sleepless nights trying to figure out solutions to the technical challenges. Nowadays
there is ample availability of consultants with Cloud computing skills. There is also marked
improvements in vendor’s customer support capability.
The Cloud technology maturity has also been another growth factor in Cloud adoption.
Due to the increased reliability of cloud technology, the user confidence around Cloud
adoption is on her rise. Cloud service providers and vendors are able to tailor the product
according to consumer needs. Cloud consumers now know better how they want to use
Cloud for their business needs. According to a Verizon study, organizations have moved
beyond testing and development in the cloud and are now running external-facing and
critical business applications.
Security is still one of the major impediments to Cloud adoption. While the industry has
seen marked improvements in addressing the security risks, the larger security concerns
around data privacy still remains.
In conclusion, according to the Verizon study, “Enterprise cloud has reached a tipping point.
Organizations have seen the benefits cloud can provide – both in efficiency and cost – and
are ready to move an increasing number of mission-critical applications to cloud-based
infrastructure. However in order for this to happen, cloud service providers must deliver
to enterprise-grade availability and security.”

23
CLOUD COMPUTING Cloud Computing Business Case
4 CLOUD COMPUTING
BUSINESS CASE
Most people think that Cloud Computing is a new technology model solution created to
solve specific problems around applications and IT infrastructure. While this is true to some
extent and cannot be debated otherwise, business willing to adopt Cloud would be short-
changed if it Cloud is just considered a technology platform. Great value can be derived
from Cloud Computing if it is treated as a business model.
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24
CLOUD COMPUTING Cloud Computing Business Case
Why should Cloud Computing be treated as a business model? Precisely because of the reasons
mentioned earlier in this book. Cloud computing is a business model because it changes
the way IT is delivered and consumed. Cloud is a flexible, scalable, and pay-per-use model
that helps business address cost and scalability challenges. With its pay-as-you-use model,
Cloud helps move IT costs from CAPEX to OPEX. It is scalable because IT capability can
be ramped up or down depending on the changing business demand. For new start-ups,
Cloud facilitates them to set up their IT environments quickly without creating an overhead
of IT expenditure. Organizations are moving to SaaS-based solutions that help them to
avoid large investments in licensing enterprise software. This aspect of cloud computing
business model has come as a boon to Small & Medium Enterprises (SME) who mostly do
not have the resources and funding to invest in building expensive IT ecosystem.
Over the years, this has enabled organizations to channelize their savings from Cloud
adoption to invest in innovating its products and services. Cloud computing therefore
speeds up entry to new markets and shortens time-to-market of new products. This is the
reason Cloud computing is synonymously known for innovative IT service delivery model.
This does not mean that Cloud computing is a solution for everything or everyone. Cloud is
recommended in situations where there is likelihood of rapidly growing computing resource
demand, the need to reduce IT capex, rapid setup and deployment of IT environment, demand
on business to be agile and respond to market dynamic quickly, and leveraging the cloud
computing infrastructure to a broader set of users to reduce per-unit cost. Cloud computing
is not usually recommended when the demand for computing resource is likely to be stable
over a period of time, sensitive data is involved, heavy integration is involved between in-
house and cloud applications, the benefits of cloud computing is marginal as opposed to the
effort involved in adopting cloud, and there is not a clear business case for cloud adoption.
There is also a clear distinction between what is feasible to be hosted on private cloud vis-à-vis
public cloud. Core business applications, applications built on significant internal intellectual
property (IP), mission critical applications are better candidates for private cloud. Similarly
enterprise-wide collaboration tools used across geographical locations can be deployed on
private cloud. Data analytics platforms & storage solutions are best retained within the
boundaries of private cloud as data security is still a major concern for business. At the
other end of the spectrum, customer solutions such as Customer Relationship Management
(CRM), Enterprise Resource Planning (ERP) can be moved to public cloud as SaaS based
solutions have gained customer trust and confidence. Disaster Recovery and backup solutions
can be moved to public cloud as they can lead to big cost savings.

25
CLOUD COMPUTING Cloud Computing Reference Architecture
5 CLOUD COMPUTING
REFERENCE ARCHITECTURE
For an organization embarking on a Cloud computing journey, is there a blueprint or
template that can be reused as a reference to make sense of various elements of Cloud
computing? Fortunately the answer is yes. A Reference Framework can be used to organize
Cloud computing ideas in a practical structure.
In simple terms, a Reference Framework consists of two elements – a Ref7erence Model

and a Reference Architecture. A Reference Architecture provides the decomposition, various
views, and best practices of the subject in discussion. Basically it helps us to answer the
question, “what is the composition of the subject matter (Cloud computing in this case)?
What are the capabilities that Cloud Computing provides?” The Reference Model, on
the other hand, explains the concepts and relationships of the various components of the
Reference Architecture. Together the Reference Framework helps us to understand any
technical subject matter better.
There are various Reference Frameworks available for Cloud Computing. This is because each
Reference Framework is built based on the viewpoint of a specific organization or person.
A Cloud service provider would define a Reference Framework that may differ significantly
from the one defined by a Cloud hardware vendor. There is no strictly mandated standard
for defining the Reference Framework. It is left to the judgement of the designing authority
to define the framework that best addresses its perspective and needs. However the thumb
rule is any Reference Framework designed must be at a high-level and understandable.

26
There are a number of Cloud Computing Reference Architecture, Models and Frameworks.
Everware-CBDI – an innovator in architectures and practices for Cloud, Service and
Component based concepts, technologies and techniques – classifies Cloud reference models
as one of two styles:
1. Role-Based: Where activities or capabilities are mapped to roles such as cloud

provider or consumer.
a) DMTF Cloud Service Reference Architecture
b) IBM Cloud Computing Reference Architecture
c) NIST Cloud Computing Reference Architecture
2. Layer-Based: Where activities or capabilities are mapped to layers in architecture

such as application or resource layers or to the service management architecture or
security architecture.
a) Cloud Security Alliance Reference Model is one of many layered models
showing the cloud ‘stack’
b) CISCO Cloud Reference Architecture Framework is an architecture of
architecture, placing Cloud on top of layers of Service, Security and Technology
architectures
c) IEFT Cloud Reference Framework goes into more depth, showing the
capabilities for each layer.
Everware-CBDI has taken the various elements from these different architectures, models
and framework and places them into a generic RF. It consolidated the elements contained
across the different reference architectures, models and frameworks for Cloud Computing
into a unified framework.

27
ůŽƵĚŽŵƉƵƚŝŶŐZĞĨĞƌĞŶĐĞ&ƌĂŵĞǁŽƌŬ
WƌŽĐĞƐƐ
ůŽƵĚŽŵƉƵƚŝŶŐZĞĨĞƌĞŶĐĞDŽĚĞů
^ƚƌĞĂŵƐ
WƌŝŶĐŝƉůĞƐ DĂƚƵƌŝƚǇ>ĞǀĞů DĞƚĂDŽĚĞů >ŝĨĞǇĐůĞ ĂƉĂďŝůŝƚǇDŽĚĞů
ŽŶƐƵŵĞ
ůĂƐƚŝĐ ϭ
>ĞǀĞůϭ
>ĞǀĞů ŽŶĐĞƉƚƐ WůĂŶŶĞĚ ƌĐŚŝƚĞĐƚƵƌĞ
WƌŽǀŝĚĞ
^ĞůĨͲ^ĞƌǀŝĐĞ >ĞǀĞůϮ WĂĐŬĂŐĞƐ ^ƉĞĐŝĨŝĞĚ &ƌĂŵĞǁŽƌŬ
ΘWƌŽĐĞƐƐ DĂŶĂŐĞ
DĞĂƐƵƌĞĚ >ĞǀĞůϯ ƵƐŝŶĞƐƐ WƌŽǀŝƐŝŽŶĞĚ
ŶĂďůĞ
ZĞƐŽƵƌĐĞWŽŽůŝŶŐ >ĞǀĞůϰ ^ƉĞĐŝĨŝĐĂƚŝŽŶ ĞƌƚŝĨŝĞĚ >ŝĨĞĐǇĐůĞ
/ŶĨƌĂƐƚƌƵĐƚƵƌĞ
͙ /ŵƉůĞŵĞŶƚĂƚŝŽŶ ĞƉůŽǇĞĚ
KƉĞƌĂƚŝŽŶĂů
ĞƉůŽǇŵĞŶƚ KƉĞƌĂƚŝŽŶĂů /ŶĨƌĂƐƚƌƵĐƚƵƌĞ KƌŐĂŶŝǌĂƚŝŽŶ
ĞƉůŽǇŵĞŶƚDŽĚĞů ^ĞƌǀŝĐĞ ZĞƚŝƌĞĚ WƌŽũĞĐƚƐΘWƌŽŐƌĂŵƐ

ZŽůĞƐ;KƌŐĂŶŝǌĂƚŝŽŶͿ
WƵďůŝĐ ͙ DĂŶĂŐĞŵĞŶƚ
ŽŶƐƵŵĞƌ
ůŽƵĚŽŶƐƵŵĞƌ
ůŽƵĚ
WƌŝǀĂƚĞ
ůŽƵĚWƌŽǀŝĚĞƌ
ŽŵŵƵŶŝƚǇ
ůŽƵĚƌŽŬĞƌ
,ǇďƌŝĚ
ůŽƵĚƵĚŝƚŽƌ
ůŽƵĚĂƌƌŝĞƌ
ůŽƵĚŽŵƉƵƚŝŶŐZĞĨĞƌĞŶĐĞƌĐŚŝƚĞĐƚƵƌĞ
sŝĞǁƐ ĞƐƚWƌĂĐƚŝĐĞ ƌĐŚŝƚĞĐƚƵƌĞ ^ĞƌǀŝĐĞ>ĂǇĞƌƐ ŽŵƉƵƚŝŶŐ>ĂǇĞƌƐ ZŽůĞƐ;/ŶĚŝǀŝĚƵĂůͿ

ƵƐŝŶĞƐƐ ^ƚĂŶĚĂƌĚƐ ^ĞƌǀŝĐĞ ĂĂ^
͘͘ĂĂ^ ůŝĞŶƚ WƌŽǀŝƐŝŽŶĞƌ
ůŽƵĚWƌŽǀŝƐŝŽŶĞƌ
ůŽƵĚ
^ƉĞĐŝĨŝĐĂƚŝŽŶ WĂƚƚĞƌŶƐ ^ŽĨƚǁĂƌĞ ^ĂĂ^ ^ĞƌǀŝĐĞ ůŽƵĚDĂŶĂŐĞƌ
/ŵƉůĞŵĞŶƚĂƚŝŽŶ dĞĐŚŶŝƋƵĞƐ dĞĐŚŶŽůŽŐǇ WĂĂ^ ƉƉůŝĐĂƚŝŽŶ ůŽƵĚƌĐŚŝƚĞĐƚ
ĞƉůŽǇŵĞŶƚ ĞůŝǀĞƌĂďůĞƐ /ĂĂ^ WůĂƚĨŽƌŵ ůŽƵĚ͙
dĞĐŚŶŽůŽŐǇ WŽůŝĐǇ ^ƚŽƌĂŐĞ
/ŶĨƌĂƐƚƌƵĐƚƵƌĞ
^ŽƵƌĐĞ͗ǀĞƌǁĂƌĞͲ/
Figure – Cloud Computing Reference Framework
The above Reference Framework can then be mapped to the requirements of the different
scenarios. The mapping can be done against either roles or capability streams as shown in
the two tables below:
RAEW1 Consumer Provider Broker Auditor Carrier
Consume
Provide
Manage
Enable
Table – Mapping Process Activities to Roles

28
1
RAEW: Responsibility, Authority, Expertise, Work
Capability
Consumer Provider Broker Auditor Carrier
Streams
Architecture
Framework
and Process
Lifecycle
Infrastructure
Operational
Infrastructure
Organization
Projects and
Programs
Management
Table – Mapping Capabilities to Roles
It is up to the organization adopting the Reference Framework to manage its reuse effectively
minimizing the reinvention of the wheel.

29
CLOUD COMPUTING Cloud Computing Maturity Model
6 CLOUD COMPUTING
MATURITY MODEL
Maturity models are used to benchmark our organization against others in the industry.
Mostly based on the Capability Maturity Model Integration (CMMI), the Cloud Maturity
Model measures Cloud capability against six defined maturity levels.
Since Cloud adoption is a long-term process, a true awareness and understanding of an

organization’s current capability in Cloud computing helps in crafting a sustainable strategy
and architecture to harness the full benefits of Cloud and reduce the risks associated with
Cloud adoption and transformation.
There are various Cloud Computing Maturity Models available in the market. While a
detailed study of these various models are outside the purview of this paper, it is worthwhile
to, at least, discuss one model so that the readers have a general idea of Cloud Maturity
Model and how it could be useful in defining a Cloud strategy.
The Open Data Center Alliance (ODCASM) Cloud Maturity Model supports multiple
perspectives in order to accommodate the variety of cloud adoption patterns that different
organizations will encounter. They explore an organization’s maturity across each of the
individual cloud service models: SaaS, PaaS, IaaS, and Info-aaS. The CMM plots the
progression of structured cloud service integration from a baseline of no cloud use through
five progressive levels of maturity, as shown in Figure below.
The figure below gives a summary description of each maturity model.
DDϬ DDϭ DDϮ DDϯ DDϰ DDϱ

EŽŶĞ͕Eͬ /ŶŝƚŝĂů͕Ě,ŽĐ ZĞƉĞĂƚĂďůĞ͕KƉƉŽƌƚƵŶŝƐƚŝĐ ĞĨŝŶĞĚ͕^ǇƐƚĞŵĂƚŝĐ DĞĂƐƵƌĞĚ͕DĞĂƐƵƌĂďůĞ KƉƚŝŵŝǌĞĚ
>ĞŐĂĐǇƉƉůŝĐĂƚŝŽŶƐŽŶ ŶĂůǇƐŝƐŽĨƵƌƌĞŶƚ WƌŽĐĞƐƐĞƐĨŽƌůŽƵĚĚŽƉƚŝŽŶ dŽŽůŝŶŐĂŶĚ/ŶƚĞŐƌĂƚŝŽŶĨŽƌ DĂŶƵĂů&ĞĚĞƌĂƚŝŽŶ &ĞĚĞƌĂƚĞĚ͕/ŶƚĞƌŽƉĞƌĂďůĞ͕ĂŶĚ

ĞĚŝĐĂƚĞĚ/ŶĨƌĂƐƚƌƵĐƚƵƌĞ ŶǀŝƌŽŶŵĞŶƚƐ͛ůŽƵĚ ĞĨŝŶĞĚ ƵƚŽŵĂƚĞĚůŽƵĚhƐĂŐĞ ůŽƵĚͲĂǁĂƌĞĂƉƉůŝĐĂƚŝŽŶƐĂƌĞ KƉĞŶůŽƵĚ
dŚĞƌĞŝƐŶŽĐůŽƵĚĂƉƉƌŽĂĐŚ ZĞĂĚŝŶĞƐƐ ŶĂƉƉƌŽĂĐŚŚĂƐďĞĞŶĚĞĐŝĚĞĚ dŚĞĂƉƉƌŽĂĐŚŚĂƐďĞĞŶƌĞǀŝĞǁĞĚ ĚĞƉůŽǇĞĚĂĐĐŽƌĚŝŶŐƚŽďƵƐŝŶĞƐƐ DĞƚƌŝĐƐĂƌĞĐŽŶƐŝƐƚĞŶƚůǇŐĂƚŚĞƌĞĚ
ďĞŝŶŐƚĂŬĞŶ͘EŽĞůĞŵĞŶƚƐŽĨ DĂƉƉŝŶŐĂŶĚĂŶĂůǇƐŝƐŽĨ ƵƉŽŶĂŶĚŝƐŽƉƉŽƌƚƵŶŝƐƚŝĐĂůůǇ ĂŶĚĂĐĐĞƉƚĞĚďǇĂĨĨĞĐƚĞĚƉĂƌƚŝĞƐ͘ ƌĞƋƵŝƌĞŵĞŶƚƐŽŶƉƵďůŝĐ͕ƉƌŝǀĂƚĞ͕ ĂŶĚƵƐĞĚƚŽŝŶĐƌĞŵĞŶƚĂůůǇ
ĐůŽƵĚĂƌĞďĞŝŶŐ ĐůŽƵĚƉŽƚĞŶƚŝĂůĨŽƌĞǆŝƐƚŝŶŐ ĂƉƉůŝĞĚ͘ dŚĞƌĞŚĂƐďĞĞŶďƵǇͲŝŶƚŽƚŚĞ ĂŶĚŚǇďƌŝĚƉůĂƚĨŽƌŵƐ͘ ŝŵƉƌŽǀĞƚŚĞĐĂƉĂďŝůŝƚǇ͘
ŝŵƉůĞŵĞŶƚĞĚ͘ ƐǇƐƚĞŵƐĂŶĚƐĞƌǀŝĐĞƐ͘ dŚĞĂƉƉƌŽĂĐŚŝƐŶŽƚǁŝĚĞůǇ ĚŽĐƵŵĞŶƚĞĚĂƉƉƌŽĂĐŚĂŶĚƚŚĞ dŚĞĐĂƉĂďŝůŝƚǇŝƐďĞŝŶŐŵĞĂƐƵƌĞĚ ƐƐĞƚƐĂƌĞƉƌŽĂĐƚŝǀĞůǇŵĂŝŶƚĂŝŶĞĚ
ǁĂƌĞŶĞƐƐŽĨĐůŽƵĚ ĂĐĐĞƉƚĞĚĂŶĚƌĞĚƵŶĚĂŶƚŽƌ ĂƉƉƌŽĂĐŚŝƐĂůǁĂǇƐ;ŽƌŶĞĂƌůǇ ĂŶĚƋƵĂŶƚŝƚĂƚŝǀĞůǇŵĂŶĂŐĞĚǀŝĂ ƚŽĞŶƐƵƌĞƌĞůĞǀĂŶĐĞĂŶĚ
ĐŽŵƉƵƚŝŶŐŝƐĞƐƚĂďůŝƐŚĞĚĂŶĚ ŽǀĞƌůĂƉƉŝŶŐĂƉƉƌŽĂĐŚĞƐĞǆŝƐƚ͘ ĂůǁĂǇƐͿĨŽůůŽǁĞĚ͘ ƐŽŵĞƚǇƉĞŽĨŐŽǀĞƌŶĂŶĐĞ ĐŽƌƌĞĐƚŶĞƐƐ͘
ƐŽŵĞŐƌŽƵƉƐĂƌĞďĞŐŝŶŶŝŶŐƚŽ DĂǇďĞŝŶĨŽƌŵĂůůǇĚĞĨŝŶĞĚŽƌŝĨ ƐƚƌƵĐƚƵƌĞ͘ dŚĞƉŽƚĞŶƚŝĂůĨŽƌŵĂƌŬĞƚ
ŝŵƉůĞŵĞŶƚĐůŽƵĚĐŽŵƉƵƚŝŶŐ ĚŽĐƵŵĞŶƚĞĚ͕ŵĂǇĞǆŝƐƚƉƌŝŵĂƌŝůǇ ƉƉƌŽƉƌŝĂƚĞŵĞƚƌŝĐƐĂƌĞďĞŝŶŐ ŵĞĐŚĂŶŝƐŵƐƚŽďĞƵƐĞĚƚŽ
ĞůĞŵĞŶƚƐ͘ ĂƐ͞ƐŚĞůĨǁĂƌĞ͘͟ ŐĂƚŚĞƌĞĚĂŶĚƌĞƉŽƌƚĞĚ͘ ůĞǀĞƌĂŐĞŝŶƚĞƌͲĐůŽƵĚŽƉĞƌĂƚŝŽŶƐ
dŚĞƌĞŝƐŶŽĐŽŚĞƐŝǀĞĐůŽƵĚ /ŶŝƚŝĂůďĞŶĞĨŝƚƐŽĨůĞǀĞƌĂŐĞĚ ŚĂƐďĞĞŶĞƐƚĂďůŝƐŚĞĚ͘
ĐŽŵƉƵƚŝŶŐƉůĂŶďĞŝŶŐ ŝŶĨƌĂƐƚƌƵĐƚƵƌĞ͘
ĨŽůůŽǁĞĚ͘
W/>/dz'/E^ &&//Ez'/E^ s>K/dzE h^/E^^^dZd'z
ĂƉĂďŝůŝƚǇ͕ĨĨŝĐŝĞŶĐǇ͕sĞůŽĐŝƚǇ͕ĂŶĚYƵĂůŝƚǇĐŽŶƚŝŶƵĂůůǇŝŶĐƌĞĂƐĞĂƐŚŝŐŚĞƌůĞǀĞůƐŽĨŝŵƉůĞŵĞŶƚĂƚŝŽŶĂƌĞĂĐŚŝĞǀĞĚ
^ŽƵƌĐĞ͗KƉĞŶĂƚĂĞŶƚĞƌůůŝĂŶĐĞ
Figure – Open Data Center Alliance Cloud Maturity Model

30
According to ODCA, these CMM levels enable the realization of a number of cloud
characteristics which in turn translate into the enablement of business functionality and
value. These business outcomes are the recommended results of positioning capabilities
within the various CMM levels: capability gains, efficiency gains, quality gains, and velocity
gains, which ultimately result in powerful business strategy enablement.
• Federated. Federation refers to the ability of identity and access management

software to be able to securely share user identities and profiles. This ability allows
users within a specific organization to utilize resources located in multiple clouds
without having to generate separate credentials in each cloud individually. IT is
able to manage one set of identities, authorizations, and set of security review
processes. From the user perspective, this enables seamless integration with systems
and applications.
• Interoperable. There are two key concepts of interoperability: (1) The ability to
connect two systems that are concurrently running in cloud environments, and
(2) the ability to easily port a system from one cloud to another. Both involve the
use of standard mechanisms for service orchestration and management, enabling
elastic operation and flexibility for dynamic business models, while minimizing
vendor lock-in.
• Open Standards. The term “open” refers to both software and standards. Open
source software operates at a fast rate of change supported by diverse, vibrant
community updates. These frequent update cycles provide access to the latest
features and capabilities, including performance and efficiency improvements. The
use of common APIs or abstraction layers makes it easier for end users to rapidly
consume cloud services from different providers to meet business requirements. Even
if the software is not open source, it should adhere to open standards, in order to
maximize the benefits of cloud deployment.
ODCA has defined Cloud Maturity Model for each of the below perspectives:
• Business perspective
• Technology perspective
• Infrastructure-as-a-Service Maturity
• Platform-as-a-Service Maturity
• Software-as-a-Service Maturity
• Information-as-a-Service Maturity

31
It is not necessary for an organization to aspire to CMM Level 5 in all cases – different levels
in the different capability areas may be quite acceptable and may meet that organization’s
requirements adequately. It is up to each organization to determine for itself where it wants
to be, and what actions and enablers will take it there, per capability.
The key takeaway from the various perspectives of ODCA Cloud Maturity Model is that
it helps an organization to define a well-thought out Cloud adoption roadmap. The cloud
adoption roadmap provides an end-to-end visualization for how the technical use of cloud
technologies in the enterprise develops over time. A typical technical adoption roadmap is
represented in Figure below.
^dZd ^d'ϭ ^d'Ϯ ^d'ϯ ^d'ϰ ^d'ϱ
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^ŝŵƉůĞ^ĂĂ^ ^ŝŵƉůĞ^ĂĂ^
^ŝŵƉůĞ^ĂĂ^ ŽŵƉůĞǆ^ĂĂ^
ŽŵƉůĞǆ^ĂĂ^ ,ǇďƌŝĚ^ĂĂ^
,ǇďƌŝĚ^ĂĂ^
>ĞŐĂĐǇƉƉƐŽŶĞĚŝĐĂƚĞĚ/ŶĨƌĂƐƚƌƵĐƚƵƌĞ
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ůŽƵĚͲǁĂƌĞƉƉƐ
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s>KWZ &ĞĚĞƌĂƚĞĚ͕
/ŶƚĞƌŽƉĞƌĂďůĞ͕ĂŶĚKƉĞŶ
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^ŝŵƉůĞŽŵƉƵƚĞ/ĂĂ^
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EĞƚǁŽƌŬ EĞƚǁŽƌŬ &ƵůůWƌŝǀĂƚĞ/ĂĂ^ ,ǇďƌŝĚ/ĂĂ^
^ŽƵƌĐĞ͗KƉĞŶĂƚĂĞŶƚĞƌůůŝĂŶĐĞ
Figure – Technical Cloud Computing Adoption Roadmap
This adoption roadmap gives context to technical planning and assists organizations in
quantifying existing deployments and the steps that following from that point.

32
CLOUD COMPUTING Cloud Computing Pricing Model
7 CLOUD COMPUTING
PRICING MODEL
A significant amount of innovation has gone into pricing Cloud Computing services correctly.
Unlike fixed-price models of IT resources with definite demand projections, the pricing of
Cloud Computing is based on amount of resources allocated. This makes Cloud pricing
constitute a significant portion of variable pricing. Think of Cloud pricing model similar
to the utility services you consume. You pay electricity bill for the number of units you
consumed, or the amount of your water consumption bill is proportionate to the amount
of consumption. The bill varies as per your consumption. While the pricing of Cloud
computing is similar in concept, there is a slight variance as compared to the utility service
pricing. The shift from fixed-price model to variable-price model mainly happened due to
the fact that not all users have the same need; hence charging them for units they don’t
consume is not considered fair. Cloud Computing pricing varies according to its various
models. A SaaS model will be priced differently than an IaaS model. The table below shows
the key components of Cloud pricing based on the Cloud service model.
No. of physical or virtual machines, IP addresses,

IaaS Amount of resource allocated firewalls, load balancers, virtual machine
images, virtual local area networks (VLANs)
Operating systems, hardware, programming language

PaaS Usage of Computing platform
execution environments, servers, and databases.
SaaS Usage of software applications No. of software licenses
Cloud computing pricing consists of two main approached – fixed and dynamic. In fixed
pricing, the customer the same amount at all times. This includes the pay-per-use model, in
which the customers pay for the amount they consume of a product or the amount of time
they use a certain service. In dynamic pricing, the pricing varies according to the level of
consumption, service features, Quality of Services (QoS), etc. A new pricing model that is being
increasingly adopted is the market-dependent pricing; this pricing depends on the real-time
market conditions such as bargaining, auctioning, demand behaviour, and yield management.

33
Note the key drivers of Cloud Computing pricing are on-demand self-service, range of
network access, speed of elasticity, resource pooling, and quality of service. The most
important factors that influence pricing in cloud computing are:
• Initial Costs: This is the initial setup costs the service provider spends to buy resources.
• Contract Period: This is the period the customer will lease resources from the service
provider. Longer the contract period, lower is the subscription price.
• Quality of Service: This is the quality of service the service provider guarantees
to meet. This is the mostly debated component of Cloud pricing. Better the QoS
guaranteed, higher is the pricing.
• Age of resources: This is the age of the resources employed by the service provider.
The older the resources are, the lower the price charged will be.
• Cost of maintenance: This is the amount the service provider spends to maintain
the cloud service.
In general terms, the cloud pricing model consists of three main components: actual cloud
pricing approach, Quality of Service (QoS), and Utilization/Contract Period.
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34
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WĂǇƉĞƌhƐĞ ^ƵďƐĐƌŝƉƚŝŽŶ WĞƌƉĞƚƵĂů
Figure – Key Components of Cloud Computing
As mentioned earlier, Cloud computing pricing models have undergone tremendous innovation
and changes in recent years. Partly due to the fact that a Cloud service provider’s incoming
cash flow may decrease because of consumers’ preference for pay-per-use mechanism, industry
has come up with various Cloud pricing model. The table below provides a quick summary
of these models.

35
Pricing Model Approach
Price is set by service provider

Pay-as-you-go model
and remains constant
Subscription Price is based on the period of subscription
A novel-financial economic model Usage-based
Pay-for-resources model Cost-based
Pricing algorithm for cloud computing Real-time pricing
Dynamic resource pricing

Auction-based pricing
on federated clouds
Genetic model for pricing in

Real-time pricing
cloud computing markets
Datacenter net profit optimization

Based on job scheduling
with individual job deadlines
Price set according to the value

Value-based pricing
perceived by the customer
Cost-based pricing Price set by adding a profit element on top of cost
Competition-based pricing Price set according to competitors’ prices
Price set according to what the

Customer-based pricing
customer is prepared to pay
Price changed according to the

Hybrid pricing
job queue wait times
In short, the underlying theme of Cloud computing pricing is “pay-as-you-go” model. It is

advised to prospective consumers of Cloud Computing services that they should negotiate
adding Quality of Service (QoS) attributes to the pricing set by Cloud service providers.
This will ensure that the pricing is not biased towards the service provider; and they have
a pressure to deliver on consistent performance and Quality of Service.

36
CLOUD COMPUTING Cloud Computing Return on Investment (ROI)
8 CLOUD COMPUTING RETURN ON

INVESTMENT (ROI)
Until recently business viewed Cloud Computing ROI through capacity-utilization lens
primarily because it wanted to avoid the cost impact of over-provisioning and under-
provisioning. The on-demand service model and ability to pay-as-you-go enables business
to provision for the service just when they required it (without worrying about the fixed
cost and up-front investment cost). To a large extent, the Capacity vs. Utilization model
sufficed for a practical ROI model as it focused on operational efficiency.
As the industry matured, business realized that there could be other drivers to measure the
ROI. In addition to operational efficiency, performance efficiency is another critical aspect
they cannot overlook. Not all cloud computing service providers provide the same level
of Quality of Service (QoS). Hence business has starting pushing service providers to add
stringent Service Level Agreements (SLA) to the service agreements/contracts. A common
QoS Key Performance Indicator (KPI) used is Availability and Recovery SLA – an indicator
of availability performance compared to current service levels.
The next driver of ROI is the security assurance. For business involved in sensitive data
management (e.g. financial services, healthcare industry), data security and risk management
is critical component of their business. They are willing to pay more for a service if they
are assured that their data would be protected and not compromised with.
Depending on the nature of the business and its requirements/expectations from cloud
service providers, organizations use a plethora of combinations of KPIs and ROI models
to measure the cloud ROI. The key ROI drivers are still a continuation of traditional IT
drivers – time, cost, quality, and profitability. Based on the specific need of the business,
parameters such as compliance, risk management, sustainability, etc. are added.
The Open Group Cloud Computing Work Group introduced a key approach to measure
Cloud computing ROI by giving an overview of Cloud KPIs and metrics. Figure and table
below show an overview of its Cloud Computing ROI models and KPIs.

37
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d/D WƌĞĚŝĐƚĂďůĞ sĂƌŝĂďůĞ
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DĂƌŐŝŶ ĨĨŝĐŝĞŶĐŝĞƐ ŝƐƌƵƉƚŝŽŶZĂƚĞ
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Figure – Cloud Computing ROI Models and KPIs
Table below describes each of these indicators:
Availability versus Indicator of availability performance

recovery SLA compared to current service levels
Workload – predictable costs Indicator of CAPEX cost on-premise ownership versus Cloud
Indicator of OPEX cost for on-premise

Workload – variable costs
ownership versus Cloud; indicator of burst cost
CAPEX versus OPEX costs Indicator of on-premise physical asset TCO versus Cloud TCO
Workload versus utilization % Indicator of cost-effective Cloud workload utilization
Workload size versus memory/processor distribution;

Workload type allocations
indicator of % IT asset workloads using Cloud
Indicator of % and cost of rationalization/consolidation

Instance to asset ratio
of IT assets; degree of complexity reduction
Indicator of number of commodity assets,

Ecosystem – optionality
APIs, catalog items, self service
The degree of service responsiveness; An indicator

Timeliness
of the type of service choice determination

38
The latency of transactions; The volume per unit of time

Throughput
throughput; An indicator of the workload efficiency
The frequency of demand and supply activity; The

Periodicity
amplitude of the demand and supply activity
Temporal The event frequency to real-time action and outcome result
The quality of perceived user experience; The quality of

Experiential
User Interface (UI) design and interaction – ease-of-use
SLA response error rate Frequency of defective responses
Intelligent automation The level of automation response (agent)
Ability to generate margin increase/budget

Revenue efficiencies
efficiency per margin; Rate of annuity revenue
Market disruption rate Rate of revenue growth; Rate of new market acquisition
Compression of time reduction by Cloud adoption; Rate

Speed of time reduction
of change of TCO reduction by Cloud adoption
Optimizing time to
Increase in provisioning speed; Speed of multi-sourcing
deliver/execution
Compression of cost reduction by Cloud adoption; Rate

Speed of cost reduction
of change of TCO reduction by Cloud adoption
Aligning cost with usage, CAPEX to OPEX

Optimizing cost of capacity utilization pay-as-you-go savings from Cloud
adoption; Elastic scaling cost improvements
Portfolio TCO, license cost reduction from Cloud adoption;

Optimizing ownership use
Open Source adoption; SOA re-use adoption
Green costs of Cloud Green sustainability
Optimizing time to Increase in provisioning speed; Reduced supply chain

deliver/execution costs; Speed of multi-sourcing; flexibility/choice
Optimizing margin Increase in revenue/profit margin from Cloud adoption

39
CLOUD COMPUTING Is Cloud Computing Right Fit For Your Organization?
9 IS CLOUD COMPUTING RIGHT FIT

FOR YOUR ORGANIZATION?
There is no straight forward answer to this question. Whether cloud computing is right
solution for you depends on various factors:
• Total Cost of Ownership (TCO): Since cost savings is one of the most important
decision factors for opting for Cloud solution, it needs to be assessed what impact it
would have on the TCO. A thorough TCO analysis needs to be done. It has been
observed that the actual value (value realized after adopting Cloud) vs. Perceived value
(expected value perceived before adopting Cloud) is quite marginal for some organizations
if other non-tangible factors are considered (e.g. data security, implementation ease,
support availability, Quality of Service, etc.).
• Data Security: Data security is still one of the top fear factors for enterprises.
There have been ample evidences of breach of data security in recent years. The
high profile Sony hack is now famous in the industry. In 2014, JP Morgan Chase
saw 80 million records breached for use of identity theft. In the same year, Apple
iCloud was a victim of hacking of major celebrity accounts, leading to the release
of private photos and videos to public domain. If your business involves dealing
with mission critical accounts and sensitive confidential customer information,
conduct proper risk assessment and evaluation of cloud service provider. Perform
proper and regular risk assessments to identify where the cloud service provider
stores and transmits valuable data. In such cases, opting for private cloud could be
a better option than public cloud.

40
CLOUD COMPUTING Is Cloud Computing Right Fit For Your Organization?
• Compliance and Governance: Cloud computing gets increasingly complex (for

both Cloud service providers and consumers) when it comes to legal, regulatory
and compliance issues. There are a host of regulations to deal with. There are
government regulations such as Sarbanes-Oxley and European Union Data Protection
Act, and industry regulations such as PCI DSS for payment cards, and HIPAA
for healthcare. Additionally there are geo-specific regulations such as country and
state laws to deal with. Therefore before embarking on a Cloud solution (for
service consumers), evaluate how creating and implementing measures to comply
with the regulations is going to add to the existing workload. Check with your
service providers where Cloud data centres are located; and ascertain whether the
regulations permit storing data outside the country. For example, the EU Data
Protection Act mandates keeping personal information within the European Union.
If an organization is storing health-related information regardless of which industry
it belongs to, then it is subjected to HIPAA. Hence work closely with your cloud
service provider to identify all legal and regulatory requirements, and the steps to
meet these regulations. Even if you are dealing with a third-party provider, subject
them to the same contractual clauses as you would do for your primary supplier.
After all, non-compliance could be costly. The Payment Card Industry (PCI) can
impose fines of up to $100,000 per month for violations to its compliance.
• Ease of Integration: Determine how easy it is to integrate the cloud solution to your
existing IT landscape. Check for interoperability with your corporate applications,
custom applications, in-house developed solutions, and non-standard interfaces.
• Service Level Agreements (SLA): A carefully-crafted SLA is paramount to receiving
the right Quality of Service (QoS). Not that by adopting cloud services, you are
giving up control of your ability to manage availability, performance, maintainability,
and timely support as you would have with your in-house infrastructure. Therefore
negotiate the process, control mechanisms, and SLAs tightly with your service
provider to guarantee consistent QoS.

41
CLOUD COMPUTING Cloud Computing Adoption Roadmap
10 CLOUD COMPUTING
ADOPTION ROADMAP
The Cloud Computing adoption plan depends on the cloud model one opts for. If the
requirement is simply for SaaS or PaaS solutions, the adoption plan is straightforward. One
has to assess the business application functionality that one wants to outsourced, determine
the right cloud solution and vendor, and procure the cloud services.
For IaaS adoption, especially for organizations that have a significant investment in
infrastructure CAPEX, the migration to Cloud depends on a number of factors. The basic
requirement is to leverage the existing infrastructure fully through virtualization, and other
related concepts.
In general, the Cloud Computing adoption roadmap includes the following approach:
CLOUD
Manage Change & Cloud Landscape
Adopt Cloud (Private, Public, Hybrid)
Select best-fit Cloud Partner
Define Cloud Architecture
Virtualize & Standardize
Conduct Proof of Concept
Establish Business Case
Assess Cloud Suitability
Figure – Cloud Computing Adoption Model

42
1. Determine what to move to Cloud – Assess the business needs and what you will
migrate to cloud. Prepare an inventory of workloads that you want to procure
from Cloud. Some of the common workloads that are readily available from Cloud
are in the areas of analytics, infrastructure such as storage, backup, applications,
collaboration tools, infrastructure compute, disaster recovery, business processes,
and so on. Once you decide the service you will procure from Cloud, define the
parameters such as service availability requirements, no. of users (for SaaS solutions),
subscription model, support model and such things. This step is mainly to come
up with a clear requirements and roadmap.
2. Assess Cloud Suitability: The first step is to assess the need to move to Cloud or
procure Cloud services. One needs to assess whether the business functionality is
core to business, whether a Cloud-based solution is worth the risks associated with
it (i.e. data theft, service downtime, etc.).
3. Establish Business Case: Establish clear business case for cloud adoption. Determine
the financial and non-financial benefits to be realized over medium to long term
(3+ years).
4. Conduct Proof of Concept (PoC): The safest option is to conduct a small PoC to
validate whether the Cloud model really works for you. Lots of cloud service providers
provide trial period to try out their Cloud solutions. During the PoC stage, assess the
technical feasibility of integrating in-house solutions with Cloud solutions.
5. Virtualize and Standardize: As mentioned earlier in the document, fully leverage
the capability of virtualization before moving to Cloud. Virtualization provides the
same benefits as those provided by Cloud services. There could be lots of unutilized
capacity in your infrastructure; virtualization enables you to optimize them fully.
Also standardize your process and technology (software, hardware, tools, etc.) so
that you can avail standardized cloud services.
6. Lay Cloud Foundation: Lay a clear Cloud computing foundation if you have a
long-term roadmap for moving to Cloud. Define reference architecture and scalable
application architecture including an integration roadmap. A well-defined architecture
will help in managing the change and impact of cloud adoption.

43
7. Select Cloud Partner: Carefully evaluate the Cloud service partner. Assess their
capability, strengths/weaknesses, and their ability to meet your support and service
requirements. Determine how safe is your data in their Cloud environment and
what preventive mechanisms they have in place for any eventualities. Ask for relevant
case studies and do reference checks if needed. The key is to determine the level
of trust you can place on your cloud partner.
8. Manage Cloud Infrastructure: This is post-cloud migration activity. This should
include managing your cloud infrastructure by enabling self-service features such as
ramping up/down your demand (e.g. storage needs), change subscription models,
support services, etc. The idea is to retain some control to yourself, rather than
depending completely on the service provider.

44
CLOUD COMPUTING Public Cloud Migration Requirements
11 PUBLIC CLOUD MIGRATION

REQUIREMENTS
Successful cloud migration requires an overhaul of organization structure, processes and
technology, and a clear understanding of business impact and risks.
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Figure – Public Cloud Migration Requirements
One of the key pre-requisites for moving to Cloud is to fully leverage the capability and
benefits of virtualization. In most cases, virtualization provides the same benefits as those
provided by Cloud computing. The key benefits of virtualization are:
a) Provisioning of available capacity can be procured quickly to meet business demands.

b) Significant infrastructure management efforts are minimized by adoption of
virtualization tools.
c) It eases in managing the elasticity and scalability of demand as ramping up or down
the required infrastructure capacity is easy.
d) Reduced OPEX due to optimization of available infrastructure.
e) Reduced CAPEX due to sharing of assets
f ) Increased utilization and availability of infrastructure.
g) Reduced Total Cost of Ownership (TCO) as depicted in the figure below.

45
CLOUD COMPUTING Public Cloud Migration Requirements
Figure – Virtualization and Cloud Computing TCO Source: CISCO
If virtualization is as good as Cloud computing and both are complimentary to each other,
how does organizations decide which option to opt for? The simple answer is, it depends. It
depends on the type of organization, and the CAPEX/OPEX spent, scalability requirements,
security needs, etc. One should also note the key difference between virtualization and Cloud.
While Cloud mostly includes the virtualization capability, additionally Cloud provides
benefits such as self-service, elasticity, automated management, scalability and pay-as you
go service that is not inherent in virtualization. Smaller organizations that have fewer IT
staff, less prone to security risks, and are more OPEX oriented are likely candidates for
adopting cloud computing. Cloud is suitable for such organizations who want to hit the
ground running, keep IT costs under control by only paying for usage they consume. On
the other hand, large organizations that have invested heavily in CAPEX, have unique
business applications that may pose challenge integrating with Cloud environment, and
have better need for security controls may want to continue with virtualization of current
infrastructure. Such large organizations usually maximize the power of virtualization before
going for low-hanging Cloud services such as backup, storage scalability, SaaS-based solutions
for non-core business functionalities, etc.
The key point to note is: Virtualization is fundamental technology on which cloud computing
is built; it makes Cloud computing work. Hence both are not interchangeable. Virtualization
is employed locally, while cloud computing is accessed as a service.

46
CLOUD COMPUTING Implementation Challenges
12 IMPLEMENTATION CHALLENGES
Cloud Computing has its own pitfalls when it comes to implementation. Implementation
challenges exist deployment happens outside the boundaries of an organization – in a realm not
in organization’s total control. There are challenges around security, risks, regulations, etc. It is
worthwhile to highlight the most common challenges surround Cloud computing deployments.
• Regulatory challenges: All cloud service providers may not be familiar with all the
security requirements that are unique to each country. There are host of regulations
around data centre locations, general security risks, data loss and privacy risks,
violation of intellectual property rights etc.
• High deployment costs: Most often that not, organizations realize that the one-
time cost for Cloud deployment, integration and transition may be higher than
expected. In the long run, does the benefits from Cloud computing offset this cost?
This is something that every cloud provider must figure out.
• Data portability and interoperability: There is a lack of standards on data portability
and interoperability between cloud service providers. Hence there is an inherent
risks that cloud service consumer may get locked into a particular Cloud product/
vendor. Hence is it best advised to avoid cloud solutions that lack inter-operability.
• Integration challenges: Integration with existing architecture is a big challenge when
it comes to Cloud deployment. A particular make of servers in an organization’s
data centre may not be compatible with the infrastructure provided by the Cloud
providers. This mostly happens if the organization persists with legacy infrastructure
that has not been upgraded to recent versions. Cloud providers mostly adopt the
latest technologies to be able to leverage virtualization as well as establish a common
infrastructure platform that is likely to cater to diverse consumers’ environment.
• Managing change: Adopting cloud services results in significant disruption to business.
Organizations have still not geared up to operating in an environment where cloud
computing is the norm. Who do business users reach out to when they need urgent
changes in the applications or the core business application is down? How does in-
house IT department manage the crisis when the management of application resides
with the cloud service provider? Will not able to address business challenges lead
to erosion of trust between IT and business? Hence a change management process
related to cloud computing must be clearly defined.

47
CLOUD COMPUTING Implementation Challenges
• Operating the Cloud: Organizations are yet to put in place management capabilities
and processes of operating with cloud services. Processes need to be defined on
supervising and managing cloud usage, performance, scalability, SLAs, and any
unplanned downtime.
• Commoditization vs. Customization: The last major challenge is how to balance
between commoditization and customization. Cloud service providers are looking to
commoditize their services, cloud consumers may need to go for specific customized
services to achieve business differentiation? How can one reconcile the two?
• Managing the vendors: Most cloud computing contracts come with a mixed bag
of outsourcing, leasing, and software contracts. There could be multiple contracts
related to the software, platform, and hardware services. Secondly a single cloud
provider may not suffice all the needs of the businesses. They may have to procure
services from multiple cloud providers. If it comes to his stage, managing the
multiple cloud vendors and contracts could be an organizational nightmare.

48
CLOUD COMPUTING Public Cloud Service Provider Selection Model
13 PUBLIC CLOUD SERVICE

PROVIDER SELECTION MODEL
Once you have decided to opt for a Cloud solution, the next challenge is selecting the right
cloud service provider. An analytical approach and well-defined evaluation criteria would be
helpful in such scenarios. A snapshot of the criteria is provided in the table below:
• Physical security of the location/data centre where cloud service

is hosted
• Application & data security
Security
• Security related to multi-tenancy
• Data encryption management
• User access management
• Performance guarantees (through SLAs)

• Availability of service
• Service reliability
• Network performance and latency
Quality of Service
• Underlying hardware performance
• Scalability of performance
• Incident response time
• Planned maintenance and upgrade downtime
• Are the SLAs SMART?

ο S – Specific
Service Level ο M – Measurable
Agreement (SLAs) ο A – Achievable
ο R – Realistic
ο T – Timely
• Price – relative to in-house solution, other public cloud service

offerings and providers
• Price-to-performance ratios
Total Cost of • Cost for upgrade
Ownership (TCO) • Support costs
• Overhead costs
• Hidden costs
• Total cost

49
CLOUD COMPUTING Public Cloud Service Provider Selection Model
• Easy of deployment
• Deployment/implementation lead time and support
• Ease of technical integration and interoperability with in-house
Technical Ease solutions
• Compatibility with legacy systems
• Ease of connectivity with cloud solution
• Analytics and reporting access
• Location of data centres (in-country or outside the country)

Location and
• Local and international regulations
Regulations
• Geographic redundancy
• Data centre architecture redundancy

• Backup and failover services and options
Disaster Planning • Time to recover down services (including track record!)
• Cloud architecture (disaster avoidance / preventive perspective)
• Location of alternate data centres with duplicate services
• Support services
• Managed services
Service • Professional services
• Recovery services
• Service monitoring
• Sustainability (green data centres and environment efficiency)

Others
• Level of carbon footprint

50
CLOUD COMPUTING Cloud Readiness Assessment Questionnaire
14 CLOUD READINESS ASSESSMENT

QUESTIONNAIRE
Following table highlights the top questions that business and organizations must ask
themselves before embarking on a Cloud journey (especially Public Cloud).
Dimension Description
• Have you developed business justification for implementing

cloud project?
• Have you identified success factors for implementing cloud
Business Case
project?
• Have you identified the availability and business continuity
requirements for your next cloud project?
Have you leveraged virtualization fully? Data center

Data Center
virtualization creates economies by putting in-house
Virtualization
resources (infrastructure and people) to best use?
To be cloud-compatible, applications must share a common

method of programmatic interaction to underlying cloud
Interoperability
resources and services. Have you assessed the interoperability
of your business applications with the applications on Cloud?
How would in-house applications integrate

Integration
with applications on the cloud?
Computing How much do your demands for computing

resource usage resources change over the course of a year?
• Do you have a data security plan to determine the minimum

level of data security that you would accept from a cloud
Data security service provider?
• Where is your core business data located – in-house or at
Cloud location?
Application Migration
Have you developed a plan for migrating applications to a cloud?
Strategy
Performance What performance requirements have been

Requirements identified for your cloud project?
Have you assessed the risks and implications if the Cloud

Risk Management
service goes down or your data on Cloud is compromised?

51
CLOUD COMPUTING Next Generation Cloud Computing
15 NEXT GENERATION
CLOUD COMPUTING
The next generation of cloud computing will be the confluence of three key cloud
capabilities – (a) ability to build and deploy quickly in Cloud environment (Platform as a
Service), (b) ability to work from anywhere and anytime using cloud solutions (Software
as a Service), and (c) availability of host of next generation Cloud services (e.g. Data as
a Service).
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Figure: Next Generation Cloud Computing Aspects

52
Major innovation will take place in the area of Cloud platform services. The next generation
cloud platform will be highly intelligent, support multiple configurations, inter-operable
across various infrastructures, provides high degree of service flexibility to consumers, and
easily integrate with enterprise environment and processes. It will provide a common platform
for building SMAC capability in an organization – Social Media, Mobility, Analytics, and
Cloud-driven services. The merger of Cloud and Internet of Things (IoT) will create next
generation of intelligent, software-driven machines that can be operated remotely with
minimum supervision and control. The software-driven concept will also extend to hardware
such as servers, storage, networking equipment. The entire infrastructure can be virtualized
and centrally controllable, or software-defined.
Organization (cloud service consumers) will be at an enormous advantage as it is highly likely

that any new technology or business service could be available as Cloud service. Already
concepts such as Big Data, Analytics are already available on Cloud. In August 2014, IBM
launched Watson Discovery Service to enable researchers accelerate the pace of scientific
breakthroughs by discovering previously unknown connections in Big Data. According to
IBM, “Available now as a cloud service, IBM’s Watson Discovery Advisor is designed to scale
and accelerate discoveries by research teams. It reduces the time needed to test hypotheses
and formulate conclusions that can advance their work – from months to days and days
to just hours – bringing new levels of speed and precision to research and development.”
Cloud computing is also embracing open source in a big way. OpenStack is one such
example. It is an open source Infrastructure as a Service. “OpenStack is a cloud operating
system that controls large pools of compute, storage, and networking resources throughout
a datacenter, all managed through a dashboard that gives administrators control while
empowering their users to provision resources through a web interface.” – OpenStack.
OpenStack also provides various shared services such as Identity Service, Image Service,
Telemetry Service, Orchestration Service, and Database Service.

53
Figure: OpenStack Cloud Operating System

Source: OpenStack
AXA Global
Graduate Program
Find out more and apply

54
Extending this same open source adoption further, Intel laid out a vision for open cloud
computing. Called Intel’s Open Cloud Vision, its three key themes are federation, automation,
and client-awareness. Federation will allow “communication, data and services move easily
within and across cloud computing infrastructure.” Automation will allow cloud services to be
“specified, located, and securely provisioned will minimum human interaction.” Client-aware
means that “cloud-based applications are able to recognize individual client device capabilities
to adapt and optimize application delivery securely, while enhancing the user’s experience.”
Figure: Intel Cloud 2015 Vision

Source: Intel
InterCloud – a concept briefly introduced in the first chapter – will become increasingly
popular. We will see bundling of different cloud services provided by different cloud provides
into one to manage cloud resource better.

55
Finally next generation cloud computing will bring in enormous amount of benefits to
end users. End users will increasingly use more personal cloud services such as putting
personal data in the cloud. Organizations will realize that employees no longer maintain
personal folders in their office workstations; employees just put everything in cloud (e.g.
Google drive, Apple iCloud) by leveraging BYOD (Bring Your Own Device) policies that
corporates extend. Therefore employers will be compelled to explore ways to incorporate
personal cloud services in the enterprise environment.
According to Herb Van Hook, Deputy Chief Technology Officer (CTO) for BMC
Software, the next generation cloud computing “…will deliver value to the business faster
by automating everything from request to deployment and configuration – and do so up
and down the stack and across the entire infrastructure.” The key drivers of next generation
cloud computing will be Business Value, Efficiency, Scalability, Security, and Self-Service.

56
CLOUD COMPUTING Top Questions to Ask Yourself Before Adopting Cloud Computing
16 TOP QUESTIONS TO ASK

YOURSELF BEFORE ADOPTING
CLOUD COMPUTING
1. What are the business goals we are trying to achieve through Cloud computing?
2. Do we have a clearly defined and approved business case for cloud computing?
3. Which cloud model (Private, Public, and Hybrid) is fit for our environment?
4. Which cloud solution (SaaS, PaaS, and IaaS) will address our business needs?
5. Have we clearly assessed the financial and non-financial cost of the cloud solution?
6. Do we have a clear cloud strategy and roadmap?
7. What are the business problems we seek to address through the cloud solution?
8. Which business process/functionality do we plan to roll out to cloud?
9. Have we clearly articulated the economic benefits we are going to achieve through
the cloud solution?
10. Have we assessed the various risks (security, technical, regulatory, etc.) that the
cloud solution may impart?
11. Have we done proper due-diligence to validate that the cloud solution will pose
no integration and deployment challenges?
12. Has the cloud vendor addressed our information security risks?
13. Have we assessed the impact of any impacted risks? E.g. impact of data loss?
14. Are we convinced that our data is safe in the vendor’s cloud environment?
15. Have the cloud vendor ably demonstrated the disaster recovery and backup plan?
16. Has the cloud vendor demonstrated enough credibility and trust in its capabilities?
Are we comfortable doing business with them?
17. What are our SLA requirements?
18. What are our Quality of Service (QoS) requirements?
19. What business impact would it have if the cloud solution does not meet the Ser
vice Level Agreements (SLA)?
20. What are the tangible and intangible business impacts of the solution not achieving
the minimum SLA?
21. Do we understand the contractual terms and obligations?
22. Have we understood the pricing plan, and terms & conditions? What immediate
set-up/implementation cost do we incur?
23. What is the Return on Investment (ROI) over a 3–5 year term?
24. How will the cloud solution impact our Total Cost of Ownership (TCO)?
25. Have we check cloud vendor’s references and similar deployments?
26. What level of support will the cloud vendor provide?

57
CLOUD COMPUTING Top Questions to Ask Your Cloud Service Provider
17 TOP QUESTIONS TO ASK YOUR

CLOUD SERVICE PROVIDER
1. Have you understood our Cloud strategy and the business goals we seek to achieve
through Cloud?
2. How will your solution/service address our business problem?
3. How will your Cloud solution/service meet our needs – both functionally and
financially?
4. How does your solution/service differentiate from your competitors?
5. Why should we adopt your solution/service?
6. Can you demonstrate successfully implementation at organizations/situation similar
to ours?
7. Do you have a trial period where we validate your solution can integrate with our
environment?
8. What contractual flexibility do you provide?
9. Are the service level agreements (SLA) amendable to changing business needs? If
so, how frequently?
10. What price protection do you provide?
11. What Quality of Performance (QoS) parameters does your solution/service
consistently meet?
12. How transparent are you in sharing SLA performance feedback on a regular basis?
13. Can we tie the pricing to the SLA performance objectives?
14. What efficiency and pricing gains can we achieve through your multi-tenancy model?
15. Where are your data centres located? In which data centre will our solution and
data reside?
16. Do you have a Disaster Recovery Plan? What are your Recovery Point Objective
(RPO) and Recovery Time Objective (RTO)?
17. How frequently do you test your DR plan?
18. How will your cloud solution/service meet the operational, security, and compliance
risks?
19. How do you plan to meet the stringent general and industry-specific security and
compliance standards security requirements?
20. Are you aware of the different regulatory requirements that we both need to comply
with? How do you plan to comply with them?

58
CLOUD COMPUTING Top Questions to Ask Your Cloud Service Provider
21. What are your policies to safeguard and protect our data?
22. What flexibility does your solution provide to configure to our needs?
23. Does your solution provide the integration capabilities that our business needs?
24. What is the division of responsibilities between you and our organization once the
solution/service is successfully deployed?
25. What level of Cloud management control do your provide to your consumers? Can we
have a self-service tool/mechanism to manage the elasticity of our demands?
26. What level of support do you provide? What is the escalation matrix?

59
CLOUD COMPUTING References
18 REFERENCES
1. Velte, Antony T., Velte, Toby J., Elsenpeter, R. (2010). Cloud Computing – A
Practical Approach. McGraw Hill, pp 3–4.
2. Mell, Peter, Grance, Timothy (2011). The NIST Definition of Cloud Computing.
National Institute of Standards and Technology.
3. May Al-Roomi, Shaikha Al-Ebrahim, Sabika Buqrais and Imtiaz Ahmad (2013).
Cloud Computing Pricing Models – A Survey.
4. The Open Group Cloud – Computing Work Group: Building Return on Investment
from Cloud Computing.
5. Open Data Center AllianceSM Usage Model: Cloud Maturity Model Rev. 2.0.
6. Verizon. 2013 State of the Enterprise Cloud Report.
7. Wilkes, Lawrence. Everware-CBDI. Commentary on Service Oriented Architecture,
Enterprise Architecture, Application Modernization, Cloud Computing and Enterprise
Mobility.
8. Szymanski, Aleks. (2015). Cloudtech – Frequency vs. size of cloud data breaches:
Which is worse?
9. Buchanan, Jim. (2011). CIO.com – Cloud Computing: 4 Tips for Regulatory
Compliance.
10. Winkler, Vic (J.R.). (2012). TechNet Magazine – Cloud Computing: Legal and
Regulatory Issues.
11. Burns, Paul. (2014). Neovise – Public Cloud Selection Criteria: Getting Beyond the Basics.
12. Huang, Ryan. (2014). ZDNet – Key questions when selecting a cloud-based provider.
13. Kajeepeta, Sreedhar. (2010). Computerworld – Multi-tenancy in the cloud:
Why it matters.
14. Bobrowski, Steve. Salesforce Developers – The Force.com Multitenant Architecture.
15. The Open Group. (2013). Cloud Computing Portability and Interoperability.
16. Angeles, Sara. (2014). Business News Daily – Virtualization vs. Cloud Computing:
What’s the Difference?
17. Skamser, Charles. (2010). eDiscovery Times – Building ROI for an eDiscovery
Cloud Computing Model.
18. Van Hook, Herb. (2014). Bmc.com – Get ready for your next-generation cloud:
lessons learned from first-generation private clouds

60
CLOUD COMPUTING References
19. Banafa, Ahmed. (2014). Thoughts On Cloud – The next generation of

cloud computing.
20. Press Release, IBM (2014). IBM Watson Ushers in a New Era of Data-Driven
Discoveries.
21. Oracle White Paper 2012 – Ten Questions to Ask Your Cloud Vendor Before
Entering the Cloud
22. OpenStack.
23. Everware-CBDI.
24. Wikipedia.

61

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2 How Does Cloud Computing Work? 15

3 Cloud Computing Landscape & Value Drivers 19

4 Cloud Computing Business Case 24

5 Cloud Computing Reference Architecture 26

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6 Cloud Computing Maturity Model 30

7 Cloud Computing Pricing Model 33

8 Cloud Computing Return on Investment (ROI) 37

9 Is Cloud Computing Right Fit For Your Organization? 40

10 Cloud Computing Adoption Roadmap 42

11 Public Cloud Migration Requirements 45

13 Public Cloud Service Provider Selection Model 49

14 Cloud Readiness Assessment Questionnaire 51

15 Next Generation Cloud Computing 52

16 Top Questions to Ask Yourself Before Adopting Cloud Computing 57

17 Top Questions to Ask Your Cloud Service Provider 58

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Cloud computing is a term used to signify a way of accessing software, infrastructure,

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Let us look at some of the popular definitions of Cloud computing.

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– The National Institute of Standards and Technology (NIST)

“Cloud Computing”, by definition, refers to the on-demand delivery of IT resources and

Characteristics Service Models Deployment Models

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1.2 CLOUD COMPUTING HISTORY

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1.3 TYPES OF CLOUD COMPUTING

Cloud Service Models Examples/

Platform-as-a- Cloud providers provide a computing Amazon web

Software-as-a- SaaS providers provide users access to Salesforce.com,

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Unified In this model, multi-platform communications over Telesphere,

TelePresence as Providers provide Telepresence as a service. TeleSpace

Contact Center as Providers provide Contact Centre services Cisco HCS,

Cloud Deployment Models

Private Cloud Cloud infrastructure dedicated to a single HP, Cisco Systems,

Public Cloud Cloud infrastructure resources shared by multiple Salesforce.com,

Hybrid Cloud Hybrid cloud is a combination of private, public IBM, VMware,

Community Cloud Cloud infrastructure dedicated Cloudian, CFN

Distributed Cloud Cloud computing provided by a distributed Amazon, Microsoft,

Intercloud Interconnected global “cloud of clouds” Cisco

Multicloud Multicloud refers to multiple cloud services that

A figurative representation of the above table is depicted below.

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Business Integration SaaS

Software Development Platform PaaS

Computin Storage Computin

Unified Communications Services UCaaS

Tele Presence Services TPaaS

Contact Center Services CSaaS

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1.4 BENEFITS AND CHALLENGES

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2 HOW DOES CLOUD

From an architectural standpoint, Cloud computing includes dynamic delivery of capabilities

Figure – Cloud Computing Architecture Overview

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The second architectural characteristic of cloud computing is the increasing portability

2 How Does Cloud Computing Work? 15

3 Cloud Computing Landscape & Value Drivers 19

4 Cloud Computing Business Case 24

5 Cloud Computing Reference Architecture 26

6 Cloud Computing Maturity Model 30

7 Cloud Computing Pricing Model 33

8 Cloud Computing Return on Investment (ROI) 37

9 Is Cloud Computing Right Fit For Your Organization? 40

10 Cloud Computing Adoption Roadmap 42

11 Public Cloud Migration Requirements 45

13 Public Cloud Service Provider Selection Model 49

14 Cloud Readiness Assessment Questionnaire 51

15 Next Generation Cloud Computing 52

16 Top Questions to Ask Yourself Before Adopting Cloud Computing 57

17 Top Questions to Ask Your Cloud Service Provider 58

2 HOW DOES CLOUD

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