What is it about the cloud that is

attractive to so many companies?

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.

This cloud model promotes availability and is composed of

five essential characteristics, three service models, and four
deployment models
 Cloud Computing
Let’s assume that you have a requirement to operate 100 servers over the
course of three years.

Option I: Lease
Rate :$0.40 per instance-hour,
Total Cost=100 servers * $0.40 instance-hour * 3 years * 8,760 hours/year
= $1,051,200.

Option II: Buy

Price:$1,500 per server ,IT Staff members hired: 2 at $100,000 per year
Total cost approximately=100 servers * $1,500 + 3 years * $13,140 electricity/
year + 3 years * 2 staff * $100,000 salary/year
= $789,420.
Cloud Computing : Is it Cheaper ?

For High Server Utilization Rate (100-75 )%

buying the servers is less expensive.

Real world estimates of average server utilization

in data centers range from 5% to 20%.
Cloud Computing converts capital expenses
to operating expenses (CapEx to OpEx).

Usage based pricing i.e. “pay as you go”

captures the economic benefit to the buyer
Key Characteristics
•On-demand self-service

•Broad network access

•Resource pooling

•Rapid elasticity

•Measured Service
On-demand self-service.
Customers can provision computing capabilities (e.g., storage,
memory, network bandwidth, user accounts) on-demand basis.
Capabilities can be provided independently and automatically
without human interaction with services providers.

Broad network access

Capabilities are available over the network. They can be
accessed through standard mechanisms with different client
platforms such as personal computers and mobile phones.
Resource pooling
Services provider pools capabilities to serve multiple
consumers using multi-tenant model. Different customers
(tenants) share the same underlying resources.

Virtualization enabled the abstraction of computing resources such that a

single physical machine is able to function as a set of multiple logical Virtual
Machine ( VMs). A key benefit of VMs is the ability to host multiple operating
system environments which are completely isolated from one another on the
same physical machine. Another benefit is the capability to configure VMs to
utilize different partitions of resources on the same physical machine.
Rapid elasticity
Capabilities can be rapidly scaled in and out (i.e., provisioned and
released) at any given time. The supply of capabilities from customer
perspective appears to be infinite.

Measured service
Appropriate metering system is employed and customer’s usage of
capabilities can be transparently monitored, controlled, and reported
Service models

•Cloud Software as a Service (SaaS)

•Cloud Platform as a Service (PaaS)

•Cloud Infrastructure as a Service (IaaS)

Cloud Infrastructure as a Service (IaaS)

Provides raw compute, memory, storage, and network

transfer capabilities for custom solutions. The customer
does not control the actual underlying hardware
infrastructure but has possibly limited control over selected
components. Capabilities are delivered as a single server or
as part of a collection of servers integrated into a virtual
private data center

Example: Amazon Elastic Compute Cloud

Cloud Platform as a Service (PaaS)

Provides development environment for deploying new

applications onto the cloud (i.e., top of bare-bones
infrastructure). Platforms are offered as application/solution
stacks with programming languages and tools supported by
the provider. The customer does not control the underlying
infrastructure but has possibly limited control over deployed
applications.

Example: google apps engine

Cloud Software as a Service (SaaS).
Provides use of the working applications running on the
provider’s cloud infrastructure. Applications are accessed
through a thin client interface such as web browser. The
customer does not manage or control the underlying
cloud infrastructure.

Example : Google Docs office suite (docs.google.com)

and Salesforce.com customer relationship management
(CRM) software (salesforce.com).
Deployment Model

•Private cloud

•Community cloud

•Public cloud

•Hybrid cloud
The CIO has earlier rejected proposals
to migrate to cloud , did he do the
right thing by delaying the migration ?
Which Cloud provider should Joe
Kwo choose ?
What according to you is one
key strength and one key
weakness of Fintech cloud
provider selection process ?
Consider Technical, Operational, and Economic factors in IT
sourcing decisions
Key stakeholders like customers and partners should be involved.

You may need to rely on current, credible information from IT

research organizations.

Pilot Testing is important.

While choosing an IT provider, there is rarely one right answer.