Executive Summary
I
preferred to create a BLOG on Cloud Computing as my case analysis on industry
innovation research BLOG/Report and its business position for my management
information system (MIS) class.
The
following is a complete blog/report of Cloud Computing business position in the
retail industry, how the businesses emerge in the industry innovation and its
market. Cloud computing technology is
not new, it’s been around, guaranteed and proven major business success for the
past years and will continue to evolve and improve on the industry and its
market segments.
The
3 models of cloud computing service on offer: Infrastructure as a Service (IaaS), Platform as a service (PaaS), Software
as a Service (SaaS), are the basic elements of cloud computing. The
Cloud Computing Architecture (1) The infrastructure layer: Also known as the
virtualization layer, (2) The platform layer: consists of operating systems and
application frameworks, (3) The application layer: the actual cloud applications and portals.
Cloud Computing, is the trend for new
generations product and service technology. The power of internet, virtualization
and open source application for business and mobile applications are extensively
utilize for personal, business and government use. Few possibilities are covered
on how cloud computing will create tremendous changes and impact on the
transformation of the world industries and personal life.
I think Porter’s
Five Forces is a great tool and framework to analyze the operational level of
effectiveness and competitive advantage in the cloud computing market. Cloud
computing projected market growth and indicate a wide adoption on continuing development
and innovation align with the expanding consumer’s market range.
What is Cloud Computing
Cloud Computing is great storage
solution, enabling demand access to a shared pool of (physical/virtual) computing
resources.[1] It is really confusing and requires an in-depth understanding on how cloud computing works. My understanding on cloud computing, is that it is a bundle of
evolution and adoption of technology (Web Application, Clustering, Terminal
Servers, Application Servers and Virtualization) shared pool as one computing resources enable
for users.
National
Institute of Standards and Technology (NIST) definition of cloud computing Cloud computing is a model for enabling
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.[2]
There are 3 models of
cloud computing service on offer:[3]
Infrastructure as a Service (IaaS) – Cloud
computing infrastructure that provides access to computing resources in
virtualized environment, includes such offerings as virtual server space,
network connections, bandwidth, IP addresses and load balancers. Physically,
the pool of hardware resource is pulled from a multitude of servers and
networks usually distributed across numerous data centers, all of which the
cloud provider is responsible for maintaining. The client, on the other hand,
is given access to the virtualized components in order to build their own IT
platforms. Some examples of IaaS vendors
include Amazon, Rackspace, CloudFoundry.[3]
Platform as a service (PaaS) - is a
category of cloud computing
services that provides a platform allowing customers to manage Web applications
development
environment and middleware capabilities for specific languages like java,
python, .net etc. and doesn’t control infrastructure, servers, OS, or storage
but has control over the apps. Some examples of PaaS vendors include Microsoft
Azure, Amazon, Force.com. This simplifies building and maintaining the infrastructure associated
with launching of application. [3]
Software as a Service (SaaS) - is a software subscription in which applications
are hosted by a vendor or service provider and made available to customers over
a network, typically the Internet. examples of SaaS vendors – Salesforce.com,
Google Apps, Ning, Cenzic, etc.[3]
In general, cloud computing can be
thought of as any instance, where you're using a computer, that resides outside
of your physical location. Most users encounter cloud computing in the form of
software as a service.
In the software as a service, users
have gain access to application software and databases. Cloud providers manage
the infrastructure and platforms that run the applications.
The Cloud Computing Architecture [4]
The infrastructure layer: Also known as the virtualization layer, the
infrastructure layer creates a pool of storage and computing resources by
partitioning the physical resources using virtualization technologies[5][2]
The platform layer: Built on top of the infrastructure layer,
the platform layer consists of operating systems and application frameworks.
[5][3]
The application layer: At the highest level of the hierarchy, the
application layer consists of the actual cloud applications and portals.
The
Cloud computing market is still young, According
to National Institute of Standards and Technology (NIST)
essential characteristics can be elaborated as follows:[2][6]
• Broad
network access: Cloud computing resources are accessible over the network,
client platforms such as mobile devices and workstations.
• Resource
pooling: Service multiple customers from the same physical resources, by
securely separating the resources on logical level.
• Rapid
elasticity: Resources are provisioned and released on-demand and/or automated
based on triggers or parameters. This will make sure your application will have
exactly the capacity it needs at any point of time.
• Measured
service: Resource usage are monitored, measured, and reported (billed)
transparently based on utilization. In short, pay for use.
Cloud
computing is much more than just virtualization. It’s really about utilizing
technology “as a service”. Users do not really need knowledge on the details of
how a particular service is implemented
Cloud
computing is now the fastest growing segment of IT industry. A Company can gain a fast access to cloud
business application. The cost on
maintaining their infrastructure and resources are low. More companies are
placed in the cloud and keep growing in numbers, concerns on data security and
safe environment is now becoming an issue. In my perspective from customers’
point of view “Unauthorized Access” is always a Security issue in the
technology.
The
capability of acquiring and releasing resources on-demand is one of the key
features of cloud computing. The goal in this case is to allocate and de-allocate
resources from the cloud to satisfy its service level objectives. Automated
resources provisioning to handle the number of applications instance required
to handle the each demand level.
Other key factors that have
enabled cloud computing to evolve include the fully developed virtualization
technology. Virtualization has a
strong capability that can provide significant benefits in cloud computing by
enabling virtual machine migration to balance load across the data center.
Physical Servers are managed efficiently to migrate from one server to another.
Insights and analysis
on how Cloud computing emerging technologies make a difference
Cloud computing has the possibility
to create tremendous changes impacting transformation of the world industries
and personal life could be change .
Everyone will become a gamer.
Gaming
is called the “killer app” of cloud computing, and gamers have emerged over
demos with complex 3-D graphics delivered to mobile devices through the cloud. [22] Cloud Gaming [9] could be the new generation of
disease. The Y Generation are known as Millennial
and Net Generation (born since 1980) and they are the techno-savvy and they are
the majority percentage market users and even the baby boomers the parents of Y
generations wants to experience and curious on the game technology.
Language Barrier will fade [12]
“Today, cloud computing gives
mobile-device users a level of speech recognition accuracy that is virtually on
par with call center-based transcription services,” says Marcello Typrin, vice
president of product development for Yap, a company that makes a free iPhone
application that converts voicemail messages into text. [11]. Another thing is
the technology language translator. The technology through provider or
developer own server (e.g. Lexifone) that run sophisticated speech recognition
on different languages, dialect or speech impediment.[13] The language
translator software understand and speak variety of languages using a
collection of “voice dictionaries”.
“People
will be able to get by without speaking a different language because the devices
they carry will enable communication between different languages."[12]
Developing countries will become new markets and new competitors.[11]
Bell notes
that China and other emerging countries have not developed robust IT
infrastructures, which means they can embrace the cloud quicker — and exploit
new opportunities faster—since they won’t be as delayed by tasks like
integrating legacy technology.[11] Cloud computing will also be a turning point
that will provide new opportunities on promising countries.
Business Analysis
In my opinion, Cloud computing can be
consider as disruptive technology. The technology progress and expanding as the
market rising.
Barriers to Entry & The
Threat of New Entrants
There will be large numbers of new
companies entering the cloud computing. [14] The industry covers different
market of application, and services (IaaS, PaaS, SaaS). To switch in this
technology does not entail high cost to start with. The legal barriers seem
lack of restriction. The threats definitely different depending on the type of
business within the cloud computing.
Supplier Power
There
is a limited of numbers needed for suppliers.
Infrastructure providers, platform-as-a-service (IaaS and PaaS) are company’s’
so called leader of the industry. [15] The only real supplier
that Cloud companies need across all segments is electricity and the massive
data centers that power services from Google, Facebook, IBM and other tech
giants are big-time energy hogs. [16]
Buyer Power
I think the
buyers power in SaaS market is high
because it is cost saving. Thus
in PaaS market, bargaining power of buyers tend to stay low because of high
switching cost. IaaS is considered to be
a commodity. Thus creating brand loyalty is only way to stay competitive in
this market. [17]
Threat of Substitutes
There are low threats of substitute
and a high potential of significant increase in market, because of the consumer
switching cost will be high. [18] Maintaining your own Servers, Data Center,
and Infrastructure are costly.
Degree of Rivalry
A larger number of
firms increase rivalry because more firms must compete for the same customers and resources. Low switching costs
increases rivalry. Strategic stakes are high for cloud computing because of the
potential for great gains and this intensifies rivalry.[14]
Conclusion
The idea of an "intergalactic computer network" was introduced in the sixties.
Since the sixties, cloud computing has developed along a number of
lines, with Web 2.0 being the most recent evolution. [20] It was a gradual advancement started in the
50’s mainframe computing. Companies could not afford to buy mainframes per user
because it is expensive to maintain the mainframes. The solutions was “Time
Sharing” in which multiple users shared access to data and CPU time.[19] “Time Sharing” is cloud computing. The VM
operating system took the 1950s’ shared access mainframe to the next level,
permitting multiple distinct computing environments to reside on one physical
environment. Virtualization came to drive the technology.[21]
The power of internet Cloud computing
is the trend for new generations product and service technology. Cloud
computing will be widely use for personal, business and government. Despite of
significant benefits offered by cloud computing the current technology are not
in its full potential. Business market should be aware of the vulnerability,
confidentiality, security of their data information stored in the cloud. My
advised is to have a concrete plan on the disaster recovery based on what cloud
computing offer.
In any business, whether it is a
disruptive technology or not, markets are challenging and there are many risks
to consider. Porter’s Five Forces provides a framework to explain the competitive
factors that are influencing the business in the cloud computing market:
Barriers to Entry & The
Threat of New Entrants – Low Threats of new entrants because of LOW, Profitability requires economies of scale[16]
Supplier Power – Low on infrastructure provider and high on
hardware and servers providers
Threat of Substitutes - low threats of substitute and a high potential for market increase, because of the consumer switching cost will be high
Degree of Rivalry – High
degree of rivalry for Software as a Service(SaaS). There would be high numbers
of competitors for the same consumers and resources.
Overall Porter’s 5 Forces Model is an
effective tool to measure the operational effectiveness and market competitive
advantage to cloud computing industry. I am recommending cloud computing to use
as an infrastructure, platform and application for business use. Whether we are
small or mid-size business it is cost effective.
References;
5. (Hamilton J (2009) Cooperative expendable
micro-slice servers (CEMS): low cost, low power servers for Internet-scale
services In: Proc of CIDR)
6. http://www.thoughtsoncloud.com/2014/01/cloud-computing-defined-characteristics-service-levels/
7. https://en.wikipedia.org/wiki/Video_game-related_health_problems
10.
Garry Dessler, Nita Chhinzer Ninna D. Cole,
Human Resources Management in Canada 12th Edition, Library and
archives Canada Catalouging Publication copyright 2014
15.
http://www.computerdealernews.com/news/top-10-canadian-cloud-providers-revealed-idc-canada/39892
17.
http://cloudcomputingbenefitsforbusinesses.blogspot.ca/2012/04/industry-analysis-and-current.html
22.
http://online.wsj.com/ad/article/cloudcomputing-changelives
http://supportcomputingliz.blogspot.ca/p/blog-page.html
