A Key Benefit of Cloud Services

When adopting cloud computing, previously sacrosanct end-user requirements are no longer central to the acquisition process. CSPs are generally not open to varying the technical specifications, pricing, service metrics, or operational service levels. Short-term (monthly) periodic billing is based on specified service consumption metrics and the service level agreement (SLA) covering those specific cloud services. The organization’s internal processes, like acquisition and purchasing, need to also align with key cloud computing economic characteristics if efficient cloud adoption is the goal.

There are five “essential characteristics of cloud computing” coined by The United States National Institute of Standards and Technology (NIST) these characteristics succinctly describe the technical, operational, and economic aspects of this revolutionary approach to information technology:

• On-demand self-service; 
• Broad network access;
• Resource pooling; 
• Rapid elasticity; and
• Measured service. 

On-demand self-service enables the provisioning of cloud resources whenever and wherever they are required. Financial office approval is not normally required for a services provisioned using personal credit card, which often violates organizational policies. These and other cloud-based services can be ordered and provided easily, quickly, and cheaply.

Broad network access delivers continuous access convenience and access to any desired services, when needed, from anywhere. The rapid and broad adoption of mobile and smart devices by businesses has raised the importance of this characteristic. It has also challenged organizational policies typically designed to maintain tight control on any device that processes organizational data. This will drive a need for corporate policy changes, mobile device management, and digital rights management (DRM) across most companies. 

Cloud service providers use resource pooling to assure high-resource utilization levels. Traditional data centers see resource utilization rates of between 10 and 20 percent. This is caused by a design philosophy that assures resource availability during peak-usage time periods. Cloud service providers dynamically reassign resources to multiple tenants from large resource pools, which is referred to as multitenancy. Based on their workload or resource requirements, resources in this environment can automatically scale and adjust to the user's or client’s needs. The cloud computing economic model enables the lower computing costs executives tout as the main reason for cloud adoption.

The pay-per-use concept is also a common economic feature of a multitenant environment. Consuming entities only pay for what is consumed. The service provider uses extensive automation and rapid elasticity to seamlessly add resources. This is normally transparent to the user. This capability represents an advantage when compared with enterprises that use traditional information technology (IT) deployments. Previously, enterprises would need to commit heavy capital investment in advance of the demand in order to support such resource variability. With cloud,  an event-type business can now rely on cloud service to create an operational environment that is accessible, configurable, and used by many unrelated customer entities. 

A key benefit exploited by many organizations is the ability to charge departments or business units for their use of services. This allows IT and finance to quantify exact usage and costs per department or by business function, which is very difficult to achieve in traditional IT environments. It can prevent expenditures on bespoke or unique it services and empowers it management by providing data that informs the executive decision process. The customer pays for his use and has the capability to get an itemized bill or breakdown of usage.

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Article generated by AI in cooperation with Leaders Press based on Kevin Jackson’s Click to Transform.