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Impacts of Cloud Computing for Small and Medium Sized Enterprises

Essay by   •  March 4, 2016  •  Research Paper  •  11,499 Words (46 Pages)  •  1,079 Views

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Impacts of Cloud Computing for Small and Medium Sized Enterprises

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INTRODUCTION

Cloud computing is used to describe various ICT services that organizations can easily access over the network from a remote location on demand. Some of the services that a consumer or business may access include email, file backups or software such as accounting software through a PC or a tablet. Cloud computing is one of the emerging technologies that are shaping businesses across the globe. It is also becoming a game changer for Small-medium sized enterprises (SMEs) by providing scalable infrastructure as well as capabilities available as services to the business.

The SMEs are contributing significantly to the socio-economic development of different countries across the globe. An estimation of 85% of the employed persons in the SMEs are in the manufacturing sector, and the enterprises are contributing significantly to the Gross Domestic Products with approximately 7% of their contributions. The use of appropriate Information technologies help the SMEs to be more efficient and productive, but SMEs do not always have enough resources. Cloud computing, an alternative to deploying applications and systems on the premises assist SMEs to tackle many issues such as the high cost and risk that are involved in the Information technology projects [1].

Cloud computing has the likelihood of being one of those opportunities that SMEs seek in these difficult times and could be of immense benefit to the enterprises because of their flexibility. Cloud computing delivers computer services to the SMEs, and the computation relies on the existing technologies such as the Internet, virtualization, and the web services among others [2]. Additionally, the SMEs prefer the low-cost alternatives that can offer a competitive advantage to the enterprises.  

Cloud computing provides the advantages of economies of scale, hence decreasing the cost of electricity, bandwidth, operations as well as hardware. Moreover, cloud computing offers service on-demand same as other utility providers. Customers can only use the computing resources they need and pay the service utilized [3]. Due to such benefits, most people recommend that SMEs use cloud computing in their activities, and most SMES are embracing the small businesses. It has therefore led to a high increase of the cloud as it presents the SMEs crucial turnaround in managing and maintaining their IT services and capabilities. Cloud computing has resulted in many benefits to the organizations and the government institutions. Some of the benefits are such as lowering of the costs, the flexibility of work due to cloud computing, reliability and easy accessibility of data in using cloud computing. However, cloud computing has led to ethical and legal issues such as security of data, privacy of user’s information and. In resolving such issues, organizations and firms should put strategies such as the use cryptography, public key infrastructure, and standardization of APIs. The paper, therefore, discusses the impacts of cloud computing on the small to medium sized enterprises.

CLOUD COMPUTING

The definition of cloud computing is a distributed type of computing that provides several potential profits to various organizations by creating information technology (IT) services accessible as a commodity. Organizations that use cloud services can expand their ability to react more quickly and unfailingly to the needs of their customers [4].

Some of the cloud services are such as, applications, data storage, processing capabilities, and software, organizations. Cloud computing refers to computing services available to anyone online. Cloud computing can also mean a style of computing that provides services over the internet by dynamically accessible and computer-generated means (Williams & sear, 2008).

In the recent past, cloud computing is the types of services and applications being supplied in the internet cloud. Additionally, the devices used to access these services and applications do not require any special applications.
Another definition of Cloud computing is delivering of computing mainly as a service instead of a product. In which case, shared resources, software, and information are provided to computers and other devices. Cloud computing offers calculation, software, data access, and data storage services that do not need end-user knowledge of the physical location and configuration of the system that delivers the services [5].

CLOUD COMPUTING CHARACTERISTICS

  1. Shared Infrastructure

Virtualized software model architecture enables the sharing of physical services, storage, and networking capabilities, regardless of deployment model

b) Dynamic

It allows for the provision of services based on current demand requirements. It is done automatically using software automation, allowing the expansion and contraction of service capability, as needed.

c)  Network Access

 One needs to access the network across the internet from a broad range of devices e.g. PCs, laptops, and mobile devices.

d) Managed

Metering it uses metering for managing and optimizing the service. It provides reporting and billing information.

CURRENT STATUS OF CLOUD COMPUTING

Due to the challenging market conditions, enterprises are slowly adopting cloud computing to achieve a competitive market and advantage in Information technology. Cloud computing has become a reality for most organizations. In a recent survey that Gartner from User Survey Analysis on Infrastructure as a Service conducted in 2011, there is an increase in adoption and awareness of new cloud services. There is a cost reduction in using cloud infrastructure and services. The new services provide flexibility, reduced costs, and it helps focus on strategic alignment with business requirements. The following are the examples of the current/anticipated use of cloud computing.

  1. Cloud Software as a Service (SaaS).

The consumer or subscriber uses the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices such as laptops, PCs or smartphones through a tiny client interface, for example, a Web browser.

The consumer does not have control of the underlying cloud infrastructure, including, servers, storage, operating systems, network or individual application capabilities. To some extent, the consumer can specify application configuration settings [6].

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