Enterprise cloud computing platforms are being designed to provide a scalable, secure system of record that can support both previous and current generation enterprise applications. Through the use of APIs, cloud-based resource allocation and optimization, and the development of virtualization technologies, enterprise cloud platforms are capable of surpassing legacy IT systems from an application performance and scalability standpoint (Wood, Ramakrishnan, Shenoy, Van, 2012)
Cloud Computing INFORMATION SECURITY in CLOUD COMPUTING PLATFORMS Cloud computing manipulates and alters our way of understanding of how current computing systems are aligned. The economics of cloud computing are re-ordering the enterprise software industry globally, bringing greater value at a lower price to companies needing to stay in step with customers (Ambust, et al
Specifically, this problem requires an identification process that potential customers should propose to cloud computing service providers before agreeing to their specific terms of contracts. This area specifically is focused on the area of Service Level Agreements (SLA) and their relative value for enterprise customers including their potential to re-order the economics of enterprise cloud computing in the enterprise (Balachandra, et al
As a result there is a wealth of both empirical and theoretical knowledge with regard to cloud computing as a technology platform alone. The myriad of those developments form the foundation of a disruptive shift in the economics of enterprise software, including a complete redefinition of how Total Cost of Ownership (TCO) is used today for evaluating and choosing SaaS-based applications over traditional, and more expensive on-premise applications (Bhutta, Huq, 2002)
While the TCO advantages of cloud-based applications and platforms are very compelling, there is a lingering doubt in the minds of many Chief Information Officers (CIOs) with regard to their long-term viability and value. CIOs are given the responsibility of stabilizing the enterprise it infrastructure for the companies they work for; their ideal situation is having no risk and no strategic challenges to deal with during their tenure (Carr, 2011)
Figure 2, How SaaS Is Deployed by Application, 2012, illustrates why CRM is chosen as a specific strategic and process area for this study. Figure 2: How SaaS Is Deployed by Application, 2012 Source: (Columbus, 2012) The problem of ascertaining just how accurate TCO is as a metric of cloud application performance is exacerbated by the following critical capabilities that enterprises rely on when planning and implementing their CRM strategies (AMR Research, 2003)
This 10X multiple for services, the majority of the time driven by BPM and BPR-based work, is often managed b y the CIO and their staff. In contrast, BPM and BPR-based work on cloud computing application are typically at a much lower multiple, nearly 5X at most, given the highly iterative nature of cloud-based applications and the ease of modifying them in real-time (Denne, 2007)
Information and data are banished to a hypothetical land of bits and bytes that really exist nowhere but the cloud. All digital information in cloud computing relinquishes its presence on specific sets of computer, hard drives, and other storage components (Durkee, 2010)
Durkee, 2010).(Wetterman, 2008) The three most critical factors of any TCO calculation are the costs to operate, costs to support and maintain, and cost to enhance and extend the software application (Ellram, 1993)
Durkee, 2010).(Wetterman, 2008) The three most critical factors of any TCO calculation are the costs to operate, costs to support and maintain, and cost to enhance and extend the software application (Ellram, 1993)
on-premise applications takes each of these three components to a line-item level that CEOs, CIOs, line-of-business leaders and often board members need to have visibility of in order to make effective decisions (Ellram, Siferd, 1998). Costs to operate in TCO calculations of enterprise applications often include infrastructure and operations one-time and recurring costs, in addition to investments aimed at increasing performance of specific applications including availability and fine-tuning usability to drive up user adoption (Faletra, 1997)
These are the costs associated with off-the-shelf software applications prior to their customization to specific business processes that enterprises need to align them with to get the most value from then. Costs to support and maintain are also inclusive of the first, second and third levels of maintenance and support (Ferrin, Plank, 2002)
The second set of costs includes alternative consumption-based pricing options. This is the most critical area of the TCO Index created as it includes subscription-based, per user per month and transaction-based pricing (Garfamy, 2006)
The costs to enhance and extend an application can often become 2X to 3X the cost of the software itself, depending on the complexity and extent of integration (Hurkens, Wynstra, 2006). When a company is paying for an on-premise application using CAPEX-based budgeting techniques this will also show as a line item in that budget as well (Geiger, 2006)
This is the area mentioned earlier in this analysis that can often reach ten times the costs of enterprise software, as the level of integration required can be extensive. The fifth categories of costs included in the TCO Index are those costs designed to normalize Costs (Heilala, Montonen, Helin, 2007)
CIOs are increasingly demanding this be done to ensure that their entire enterprise is represented in the new could-based systems. The costs to enhance and extend an application can often become 2X to 3X the cost of the software itself, depending on the complexity and extent of integration (Hurkens, Wynstra, 2006)
These are the costs for adding new capacities and features to a given application. These also include minor and major updates, in addition to the costs of integration on-premise or cloud applications to legacy systems (Julie, Schuff, Robert, 2002)
For on-premise applications with heavy requirements for BPM and BPR custom programming professional services, funding is treated as a capital expense (CAPEX). CAPEX-based spending on a project requires approval not just of the CEO but of the board of directors of a corporation as well (Katzan, 2010)
As a result, the command and control of this data is significantly diffused. This technological diffusement gives rise to new problems as well, including the need for managing security more effectively than has been the case in the past with enterprise applications (Kaufman, 2009)
In addition to the lack of enforceability of SLAs often cloud computing and SaaS-based enterprise software companies rely extensively on maintenance fees and annual maintenance contracts to generate the case they need to operate on a daily basis. The reliance on maintenance fees within enterprise software is commonplace and often doesn't lead to greater innovation in new product development, instead making the enterprise software companies even more complacent over time due to the lack of urgency of generating revenue (Leavitt, 2009)