Cloud Computing & Virtualization

Introduction to Cloud Computing & Virtualization


For SMBs (Small and Medium Businesses), Cloud Computing moves technology resources that historically have been on-site (within a building network) to an off-site, internet-connected location.  What remains on-site, at a minimum, is a network of devices with internet browsing capability – such as a computer, smart phone, etc.  Everything else (applications, servers, storage, backup, recovery…) can potentially be moved off-site to a service provider.

Determining the combination of local and remote resources for Cloud Computing that best fits your business is complex and has critical short-term effects and long-term consequences for your business viability.

The ability to implement portions of Cloud Computing technology has been around for many years, and many enterprises have utilized some portion of its features.  These technologies are referred to by such names as Software as a Service (SaaS), Hardware as a Service (HaaS), and others.  Only recently has Cloud Computing been widely used to describe the superset of these technologies.  Consequently, one does not know what is specifically meant by Cloud Computing without determining what is best to meet your specific business needs.


Only in the past few years has the technology developed to the point where it is often compelling to SMBs.  The catchy name “Cloud Computing” coincided with its technical and economic ripeness for wide-spread implementation; the appealing name probably contributes to its increasing acceptance in the marketplace.

One of the key factors to effectively utilize Cloud Computing technology is Virtualization, which separates the dependence of software, e.g. the operating system (Windows or Linux) and/or the business applications from the physical hardware that it runs on.  This is typically accomplished by inserting another level of hardware and/or software between the physical computer and the operating system.  Years ago, this virtualization layer degraded  performance significantly, but recent hardware improvements have minimized the loss, making Virtualization much more efficient.

The big advantage to virtualizing Cloud services is the ability to run multiple small virtual servers on any compatible larger physical server.  This provides significant economies of scale, flexibility to move virtual servers to other physical servers, and the capability to quickly adjust to increased or decreased resource demands.

There are several driving forces rapidly propelling the computer industry in the direction of Cloud Computing.  These forces are so compelling that this trend may well become another significant business-changing technology milestone:

  • Economics
Usually significantly lower costs, reduced capital expenditures, and more flexible/quicker implementation and scalability.  These factors limit many SMBs from effectively utilizing technology today.
  • Risks
Some risks are reduced by effective implementation; others are increased, but can be minimized by proper implementation.  The potential for failure is huge, but the tools to address the problems are plentiful.


Special attention must be given to contracts:

  1. Data protection – accidental destruction & who owns/controls the data
  2. Termination (reasons and notice)Cloud-Computing-Illustration
  3. Amendment terms
  4. Laws of another jurisdiction
  5. Liability for loss

Real life examples:

  • Amazon Web Services (AWS) can change its terms or terminate accounts without notice.
  • April 2011 AWS outage in its Elastic Block Store (EBS) service critically impacted business systems for thousands of users. But that contingency wasn’t even mentioned in Amazon’s terms of service, which guarantees an SLA of 99.95% uptime for its Elastic Compute Cloud (EC2) only. AWS gave back credit for affected users, but it wasn’t obligated to do so.
  • A June, 2011 survey showed 200 US companies (500+ employees) using Cloud providers had a 39% security lapse or issue within the last 12 months (Trend Micro) (Survey).
Cloud Computing: Potential Risk Reduction Potential Risk Increase
1. Less reliance on local technical expertise. 1. More reliance on service providers’ competence and effectiveness.
2. 2. Additional planning and investigation of application and data ownership/recovery in the event you change cloud providers or the current provider fails.
3. Probably more efficient use of resources by the service provider. 3. Less local control over resources.
4. Internet redundancy more than compensates for more potential points of failure. 4. The business may need two or more different internet access providers to reduce the exposure to outages.
5. 5. More exposure to internet infrastructure failure due to regional, national, or international outages or disasters.  A terrorist attack on the internet may more significantly impact business continuity than the traditional client-server business technology model.
6. Proper implementation may reduce overall security exposure when compared to local security practices. 6. Potentially more security exposures.  The buyer must verify the provider makes the data and connection as secure as possible.
7. Probably better backup/recovery from the cloud service provider than the current local backup/recovery. 7.

This information scratches the surface of Cloud Computing and Virtualization.  Hopefully it helps you understand how this fundamental technology change can benefit your business and how the complexity can significantly impact the success of using Cloud Computing & Virtualization in your business.

PSSI would be pleased to assist you in making the best choices for your business needs, cost-effective implementation of your plans, and/or on-going proactive management of your on-site technology to provide the lowest cost and most reliable solution possible.  Let’s discuss your needs for
  • Public, Private, or Hybrid Clouds.
  • Determining who provides various hardware and software services:
    • Software as a Service (SaaS) – everyone uses the same multi-tenant application.  A service provider hosts line-of-business applications and your business pays a subscription fee based on usage.  Examples are Office 365 and Google Apps.
    • Platform as a Service (PaaS) – individual applications are deployed to a virtualized server.  A service provider provides shared resources such as storage, networking and virtualized hosts. You pay a subscription fee based on usage for their cloud virtual servers. You are responsible to configure and manage the virtual servers.  Examples are Windows Azure, Amazon EC2, and Rackspace Cloud Servers.
    • Infrastructure as a Service (IaaS) – virtualized hardware is used to quickly deploy operating systems and applications.  A service provider provides cloud application execution services and you run your line-of-business apps in the cloud vs. on-site.  Examples are Windows Azure (supports a wide range of application development platforms), Amazon AWS Elastic Beanstalk (in beta), and Google App Engine.
    • What Cloud providers best meet your needs for contractual terms, security, reliability, and failure-protection at a competitive price.
    • What are the best options for your on-site network of computers to access the Cloud provider.

For more technical information:   Cloud Computing Overview