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Benefits and Risks of Cloud Computing Solutions.

Hardware and Software upgrades, System management, Fees, SLA, Enhancement, integration, Data Security, Ownership and more.

Cloud Computing is where businesses buy internet based access to hosted software, infrastructure and platform services on an on-demand, pay as you use basis.

The best known of Cloud computing services is Software as a Service (SaaS) that provides software services on the cloud and the hosting company provides higher quality functionality, flexibility, cost control and management than can be done by the individual client on their own.

There are several Advantages of cloud computing although there are some disadvantages too. So a business client needs to know what options they have and decide if the advantages outweigh the disadvantages before deciding to switch from Traditional inhouse hosting to Cloud computing where services are hosted in a remote location and accessed via the internet or private WAN.

State of the art hardware

An Advantage of cloud computing is that the hosting company runs the applications on State of the Art Hardware and this provides the user with quality service without needing to invest in all that hardware.

System Management

The host company also provide System Management like frequent software upgrades, backups and administration freeing the users from all these potentially costly tasks.

Fee Structure.

The client pays an initial fee to the Software vendor and retains User License to the software or Outright ownership depending on the Vendors conditions of sale.

The services are then available to the user for a specified length of time that they paid for. The user may be locked in a contract for the specified time although they may not use the services all the time. This is a potential disadvantage because the user pays for a specific time even if they don't use the software for all that time.

Some providers give an option where you just pay for the time you use the software and this flexibility is an advantage.

Service Level Agreement(SLA)

The user should negotiate for Service Level Agreement (SLA) . This comprises the number of hours or Up-time they can expect, for example, they can get a guarantee that the service will be available 99% of the time.

The other component of SLA is the Maximum Data Throughput. This is the upload and download speeds that the customer should expect from their service.

If the vendor fails to provide their promised SLA, then they will refund you.

System Enhancement and Swapping

The life of most software is about three years. So if someone is purchasing Software as a Service, the software is bound to be upgraded after a few years. The advantage of cloud computing is that the hosting company makes these upgrades transparent of the user. The user is saved the costs and technical expertise needed to make these upgrades.

For Infrastructure as a Service vendors, they may also need to upgrade their infrastructure. So they can give the option for customers to Swap to new upgraded hardware and infrastructure when the older one becomes outdated.

Integration of Tools

If your company outsources several services to other companies, it will be beneficial if you use Cloud services that the companies you outsource to use. Therefore if you are all using the same service, it will be easier to integrate your operations with other companies using the same type of cloud service.

Standardization and no Customization.

If you are using cloud services, you will have limited to no ability to customize your applications because the host company cannot run multiple customized solutions. They have to run standardized solution they can sell to multiple customers.

So if you want a highly customized solution, then cloud computing may not offer lots of benefits for you.

Integrating legacy applications.

If you are running software inhouse, it is much easier to integrate with legacy systems. However it may be more difficult to integrate legacy software in a cloud based application.

Many cloud services vendors however provide many integration tools and this may not be a disadvantage any more.

Data Security

Cloud based services are more vulnerable to data breaches and hacking. This is because their services are done online and rely on some authentication mechanism which can be compromised leading to loss of millions of data for customers.

Data ownership and access.

It is good to have a backup of your data, probably through another cloud provider so that if your primary cloud provider goes offline, you will still have access to the backed up data.

It is also good to be sure you own all your data stored in the provider so you can access it in case the company goes out of business or is acquired by another company.


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