Cloud Computing Introduction

Cloud Computing
Text Book:
Rajkumar Buyya, James Broberg, Andrzej M. Goscinski, Cloud Computing:
Principles and Paradigms, Wiley, 2011.
Prof. Vivek R. Shelke
Govt. College of Engg. Yavatmal

Definition of Cloud Computing
What is Cloud Computing
The term cloud refers to a network or
the internet.
It is a technology that uses remote
servers on the internet to store,
manage, and access data online rather
than local drives.
The data can be anything such as files,
images, documents, audio, video, and
more.
There are the following operations that we can do using cloud computing:
• Developing new applications and services
• Storage, back up, and recovery of data
• Hosting blogs and websites
• Delivery of software on demand
• Analysis of data
• Streaming videos and audios

Evolution of Cloud Computing
Distributed Systems:
It is a composition of multiple
independent systems but all of them are
depicted as a single entity to the users.
The purpose of distributed systems is to
share resources and also use them
effectively and efficiently.
Distributed systems possess
characteristics such as scalability,
concurrency, continuous availability,
heterogeneity, and independence in
failures.
But the main problem with this system was that all the systems were
required to be present at the same geographical location.
Thus to solve this problem, distributed computing led to three more types of
computing and they were-Mainframe computing, cluster computing, and
grid computing.

Mainframe computing:
Mainframes which first came into
existence in 1951 are highly powerful
and reliable computing machines.
These are responsible for handling
large data such as massive input-
output operations.
Even today these are used for bulk
processing tasks such as online
transactions etc.
These systems have almost no downtime with high fault tolerance. After
distributed computing, these increased the processing capabilities of the
system.
But these were very expensive. To reduce this cost, cluster computing came
as an alternative to mainframe technology.

Cluster computing
In 1980s, cluster computing came as
an alternative to mainframe
computing.
Each machine in the cluster was
connected to each other by a network
with high bandwidth.
These were way cheaper than those
mainframe systems. These were
equally capable of high computations.
Also, new nodes could easily be added to the cluster if it was required.
Thus, the problem of the cost was solved to some extent but the problem
related to geographical restrictions still pertained.
To solve this, the concept of grid computing was introduced.

Grid computing:
In 1990s, the concept of grid
computing was introduced.
It means that different systems were
placed at entirely different
geographical locations and these all
were connected via the internet.
These systems belonged to different
organizations and thus the grid
consisted of heterogeneous nodes.
Although it solved some problems but new problems emerged as the
distance between the nodes increased.
The main problem which was encountered was the low availability of high
bandwidth connectivity and with it other network associated issues.
Thus. cloud computing is often referred to as “Successor of grid
computing”.

Vitualization:
It was introduced nearly 40 years back. It refers
to the process of creating a virtual layer over
the hardware which allows the user to run
multiple instances simultaneously on the
hardware.
It is a key technology used in cloud computing.
It is the base on which major cloud computing
services such as Amazon EC2, VMware vCloud,
etc work on.
Hardware virtualization is still one of the most
common types of virtualization.
Web 2.0:
It is the interface through which the cloud computing services
interact with the clients. It is because of Web 2.0 that we
have interactive and dynamic web pages. It also increases
flexibility among web pages. Popular examples of web 2.0
include Google Maps, Facebook, Twitter, etc. Needless to say,
social media is possible because of this technology only. It
gained major popularity in 2004.

Service orientation:
It acts as a reference model for cloud
computing. It supports low-cost, flexible,
and evolvable applications. Two important
concepts were introduced in this computing
model. These were Quality of Service (QoS)
which also includes the SLA (Service Level
Agreement) and Software as a Service
(SaaS).
Utility computing:
It is a computing model that defines
service provisioning techniques for
services such as compute services along
with other major services such as storage,
infrastructure, etc which are provisioned
on a pay-per-use basis.

Service and Deployment Models of Cloud Computing
Platform As A Service
 Cloud Computing Service Models
Infrastructure As A
Service
Software As A Service

Software as a Service (SaaS)
• Software as a Service (SaaS) is a web-based deployment model
that makes the software accessible through a web browser.
• SaaS software users don’t need to care where the software is
hosted, which operating system it uses, or even which
programming language it is written in.
• The SaaS software is accessible from any device with an internet
connection.
• This cloud service model ensures that consumers always use the
most current version of the software.
• The SaaS provider handles maintenance and support.
• In the SaaS model, users don’t control the infrastructure, such as
storage, processing power, etc.

Examples: Google Workspace, Microsoft 365

 Characteristics of SaaS
• There are the following characteristics of SaaS:
• It is managed from a central location.
• Hosted directly on a remote server.
• It is accessible over the Internet.
• SaaS users are not responsible for hardware and software updates.
• The services are purchased on a pay-as-per-use basis.

 Advantages SaaS
• The biggest benefit of using SaaS is that it is easy to set up, so you
can start using it instantly.
• Compared with on-premises software, it is more cost-effective.
• You don’t need to manage or upgrade the software, as it is
typically included in a SaaS subscription or purchase.
• It won’t use your local resources, such as the hard disk typically
required to install desktop software.
• It is a cloud computing service category that provides a wide range
of hosted capabilities and services.
• Developers can easily build and deploy web-based software
applications.
• You can easily access it through a browser.

 Disadvantages SaaS
• Integrations are up to the provider, so it’s impossible to “patch” an
integration on your end.
• SaaS tools may become incompatible with other tools and hardware
already used in your business.
• You depend on the SaaS company’s security measures, so your data may
be compromised if any leaks occur.
 Things to Consider Before SaaS Implementation
• Here are essential things you need to consider before SaaS
implementation:
• It would help if you opted for configuration over customization within a
SaaS-based delivery model.
• You must carefully understand the usage rates and set clear objectives to
achieve the SaaS adoption.
• You can complement your SaaS solution with integrations and security
options to make it more user-oriented.

Platform as a Service (PaaS)
• Platform-as-a-Service (PaaS) provides a cloud computing
framework for software application creation and deployment.
• It is a platform for the deployment and management of software
apps. This flexible cloud computing model scales up automatically
on demand.
• It also manages the servers, storage, and networking, while the
developers manage only the application part. It offers a runtime
environment for application development and deployment tools.
• This Model provides all the facilities required to support the
complex life cycle of building and delivering web applications and
services entirely for the Internet.
• This cloud computing model enables developers to rapidly develop,
run, and manage their apps without building and maintaining the
infrastructure or platform.

Examples: Heroku, Microsoft Azure App Service

 Characteristics of PaaS
• Builds on virtualization technology, so computing resources can
easily be scaled up (Auto-scale) or down according to the
organization’s needs.
• Support multiple programming languages and frameworks.
• Integrates with web services and databases.
 Advantages PaaS
• Simple, cost-effective development and deployment of apps
• Developers can customize SaaS apps without the headache of
maintaining the software
• Provide automation of Business Policy
• Easy migration to the Hybrid Model

• It allows developers to build applications without the overhead of
the underlying operating system or cloud infrastructure
• Offers freedom to developers to focus on the application’s design
while the platform takes care of the language and the database
• It helps developers to collaborate with other developers on a single
app
 Disadvantages of SaaS
• You have control over the app’s code and not its infrastructure.
• The PaaS organization stores your data, so it sometimes poses a
security risk to your app’s users.
• Vendors provide varying service levels, so selecting the right
services is essential.
• The risk of lock-in with a vendor may affect the ecosystem you need
for your development environment.

 Things to Consider Before PaaS Implementation
• Here are essential things you need to consider before PaaS
implementation:
• Analyze your business needs, decide the automation levels, and also
decides whether you want a self-service or fully automated PaaS
model.
• You need to determine whether to deploy on a private or public
cloud.
• Plan through the customization and efficiency levels.

Infrastructure as a Service (IaaS)
• Infrastructure-as-a-Service (IaaS) is a cloud computing service
offering on-demand computing, storage, and networking resources.
It usually works on a pay-as-you-go basis.
• Organizations can purchase resources on-demand and as needed
instead of buying the hardware outright.
• The IaaS cloud vendor hosts the infrastructure components,
including the on-premises data center, servers, storage, networking
hardware, and the hypervisor (virtualization layer).
• This Model contains the basic building blocks for your web
application. It provides complete control over the hardware that runs
your application (storage, servers, VMs, networks & operating
systems).
• IaaS model gives you the best flexibility and management control
over your IT resources.

 Characteristics of IaaS
• Resources are available as a service
• Services are highly scalable
• Dynamic and flexible Cloud Service Model
• GUI and API-based access
• Automate the administrative tasks
Examples: Amazon
Web Services (AWS),
Microsoft Azure

 Advantages of IaaS
• Easy to automate the deployment of storage, networking, and
servers.
• Hardware purchases can be based on consumption.
• Clients keep complete control of their underlying infrastructure.
• The provider can deploy the resources to a customer’s environment
anytime.
• It can be scaled up or downsized according to your needs.
 Disadvantages of IaaS
• You should ensure that your apps and operating systems are working
correctly and providing the utmost security.
• You’re in charge of the data, so if any of it is lost, it’s up to you to
recover it.
• IaaS firms only provide the servers and API, so you must configure
everything else.

 Things to Consider Before IaaS Implementation
• Here are some specific considerations you should remember before
IaaS Implementation:
• You should clearly define your access needs and your network’s
bandwidth to facilitate smooth implementation and functioning.
• Plan out detailed data storage and security strategy to streamline the
business process.
• Ensure that your organization has a proper disaster recovery plan to
keep your data safe and accessible.

 Other important As a Services
• MaaS–MaaS stands for monitoring as a service. It allows the
consumer to monitor the status of their critical applications
regardless of location.
• CaaS – Communication as a service use Enterprise level VPNs,
VoIP, PBX, and Unified Communications between the costly
investment of hosting, purchasing, and managing the IT
infrastructure. It also enables you to reduce CAPEX and OPEX.
• DaaS – Desktop as a service ensures a reliable, consistent
experience for the remote use of programs, applications, and files
anywhere, anytime.
• DRaaS – Disaster Recovery as a service is a cloud computing
model that provides safeguards from natural (or artificial)
catastrophes.

Difference Between IaaS, PaaS, and SaaS

Deployment Models of Cloud Computing
 Cloud Deployment Model
• The cloud deployment model identifies the specific type of cloud
environment based on ownership, scale, access, and the cloud’s nature
and purpose.
• There are various deployment models are based on the location and
who manages the infrastructure.
• In order to make the most optimal use of a particular cloud
deployment type, you must understand what each deployment model
can do, its characteristics, and its advantages and disadvantages.

Types of Cloud Deployment Model
Private Cloud: Resource managed
and used by the organization.
Public Cloud: Resource available
for the general public under the
Pay as you go model.
Community Cloud: Resource
shared by several organizations,
usually in the same industry.
Hybrid Cloud: This cloud
deployment model is partly
managed by the service provided
and partly by the organization.

Public Cloud Model
• As its names suggest, the public cloud is available to the general
public, and resources are shared between all users.
• They are available to anyone, from anywhere, using the Internet.
• The public cloud deployment model is one of the most popular types
of cloud.
• This computing model is hosted at the vendor’s data center.
•The public cloud model makes the resources, such as storage and
applications, available to the public over the WWW.
•It serves all the requests; therefore, resources are almost infinite.

Public Cloud Model
Examples: AWS, Azure, Google Cloud Prof. Vivek R. Shelke

Public Cloud Model
 Characteristics of Public Cloud
• Uniformly designed Infrastructure
• Works on the Pay-as-you-go basis
• Economies of scale
• SLA guarantees that all users have a fair share with no priority
• It is a multitenancy architecture, so data is highly likely to be leaked
 Advantages of Public Cloud Deployments
• Highly available anytime and anywhere, with robust permission and
authentication mechanism.
• There is no need to maintain the cloud.
• Does not have any limit on the number of users. Prof. Vivek R. Shelke

Public Cloud Model
• The cloud service providers fully subsidize the entire Infrastructure.
Therefore, you don’t need to set up any hardware.
• Does not cost you any maintenance charges as the service provider
does it.
• It works on the Pay as You Go model, so you don’t have to pay for
items you don’t use.
• There is no significant upfront fee, making it excellent for enterprises
that require immediate access to resources.
Disadvantages of Public Cloud Deployments
• It has lots of issues related to security.
• Privacy and organizational autonomy are not possible.
• You don’t control the systems hosting your business applications.

Private Cloud Model
• The private cloud deployment model is a dedicated environment for
one user or customer.
• You don’t share the hardware with any other users, as all the hardware
is yours.
• It is a one-to-one environment for single use, so there is no need to
share your hardware with anyone else.
• The main difference between private and public cloud deployment
models is how you handle the hardware.
• It is also referred to as “internal cloud,” which refers to the ability to
access systems and services within an organization or border.

Private Cloud Model
Examples: On-premises private cloud, VMware Cloud Prof. Vivek R. Shelke

Private Cloud Model
 Characteristics of Private Cloud
• It has a non-uniformly designed infrastructure.
• Very low risk of data leaks.
• Provides End-to-End Control.
• Weak SLA, but you can apply custom policies.
• Internal Infrastructure to manage resources easily.
Advantages of Private Cloud Deployments
• You have complete command over service integration, IT operations,
policies, and user behavior.
• Companies can customize their solution according to market demands.
• It offers exceptional reliability in performance.
• A private cloud enables the company to tailor its solution to meet
specific needs.
• It provides higher control over system configuration according to the
company’s requirements. Prof. Vivek R. Shelke

Private Cloud Model
•Private cloud works with legacy systems that cannot access the public
cloud.
• This Cloud Computing Model is small, and therefore it is easy to
manage.
• It is suitable for storing corporate information that only permitted staff
can access.
• You can incorporate as many security services as possible to secure
your cloud.
 Disadvantages of Private Cloud Deployments
• It is a fully on-premises-hosted cloud that requires significant capital
to purchase and maintain the necessary hardware.
• Companies that want extra computing power must take extra time and
money to scale up their Infrastructure.
• Scalability depends on the choice of hardware.

Hybrid Cloud Model
• A hybrid cloud deployment model combines public and private clouds.
• Creating a hybrid cloud computing model means that a company uses
the public cloud but owns on-premises systems and provides a
connection between the two.
• They work as one system, which is a beneficial model for a smooth t
transition into the public cloud over an extended period.
• Some companies cannot operate solely in the public cloud because of
security concerns or data protection requirements.
• So, they may select the hybrid cloud to combine the requirements with
the benefits of a public cloud.
• It enables on-premises applications with sensitive data to run
alongside public cloud applications.

Hybrid Cloud Model

Hybrid Cloud Model
 Characteristics of Private Cloud
• Here are the Characteristics of the Private Cloud:
• Provides betters security and privacy
• Offers improved scalability
• Cost-effective Cloud Deployment Model
• Simplifies data and application portability
 Advantages of Hybrid Cloud Deployments
• It gives the power of both public and private clouds.
• It offers better security than the Public Cloud.
• Public clouds provide scalability. Therefore, you can only pay for the
extra capacity if required.
• It enables businesses to be more flexible and to design personalized
solutions that meet their particular needs.
• Data is separated correctly, so the chances of data theft by attackers are
considerably reduced.
•It provides robust setup flexibility so that customers can customize their
solutions to fit their requirements. Prof. Vivek R. Shelke

Hybrid Cloud Model
 Disadvantages of Hybrid Cloud Deployments
• Here are the cons/drawbacks of the Hybrid Cloud Deployment Model:
• It is applicable only when a company has varied use or demand for
managing the workloads.
• Managing a hybrid cloud is complex, so if you use a hybrid cloud, you
may spend too much.
• Its security features are not good as the Private Cloud.

Community Cloud Model
• Community clouds are cloud-based infrastructure models that
enable multiple organizations to share resources and services
based on standard regulatory requirements.
• It provides a shared platform and resources for organizations to
work on their business requirements.
• This Cloud Computing model is operated and managed by
community members, third-party vendors, or both.
• The organizations that share standard business requirements make
up the members of the community cloud.

 Advantages of Community Cloud Deployments
• You can establish a low-cost private cloud.
• It helps you to do collaborative work on the cloud.
• It is cost-effective, as multiple organizations or communities share the
cloud.
• You can share resources, Infrastructure, etc., with multiple
organizations.
• It is a suitable model for both collaboration and data sharing.
• Gives better security than the public cloud.
• It offers a collaborative space that allows clients to enhance their
efficiency.
Disadvantages of Community Cloud Deployments
• Because of its restricted bandwidth and storage capacity, community
resources often pose challenges.
• It is not a very popular and widely adopted cloud computing model.
• Security and segmentation are challenging to maintain. Prof. Vivek R. Shelke

Multi-cloud

Multi-cloud
• Multi-cloud computing refers to using public cloud services from
many cloud service providers.
• A company must run workloads on IaaS or PaaS in a multi-cloud
configuration from multiple vendors, such as Azure, AWS, or Google
Cloud Platform.
• There are many reasons an organization selects a multi-cloud
strategy.
• Some use it to avoid vendor lock-in problems, while others combat
shadow IT through multi-cloud deployments.
• So, employees can still benefit from a specific public cloud service if
it does not meet strict IT policies. Prof. Vivek R. Shelke

Multi-cloud
 Benefits of Multi-Cloud Deployment Model
• Here are the pros/benefits of the Multi-Cloud Deployment Model:
• A multi-cloud deployment model helps organizations choose the
specific services that work best for them.
• It provides a reliable architecture.
• With multi-cloud models, companies can choose the best Cloud
service provider based on contract options, flexibility with payments,
and customizability of capacity.
• It allows you to select cloud regions and zones close to your clients.
 Disadvantages of Multi-Cloud Deployments
• Here are the cons/drawbacks of the Multi-Cloud Deployment Model:
• Multi-cloud adoption increases the complexity of your business.
• Finding developers, engineers, and cloud security experts who know
multiple clouds is difficult.

Comparison of Top Cloud Deployment Models
Parameters Public Private Community Hybrid
Setup and use Easy Need help from
a professional
IT team.
Require a
professional IT
team.
Require a
professional IT
team.
Scalability
and Elasticity
Very High Low Moderate High
Data Control Little to none Very High Relatively
High
High
Security and
privacy
Very low Very high High Very high
Reliability Low High Higher High
Demand for
in-house
software
No Very high in-
house software
requirement
No In-house
software is not
a must.

How to select the suitable Cloud Deployment Models
Companies are extensively using these cloud computing models all around
the world. Each of them solves a specific set of problems.
So, finding the right Cloud Deployment Model for you or your company is
important.
Here are points you should remember for selecting the right Cloud
Deployment Model:
Scalability: You need to check if your user activity is growing quickly or
unpredictably with spikes in demand.
Privacy and security: Select a service provider that protects your privacy
and the security of your sensitive data.
Cost: You must decide how many resources you need for your cloud solution.
Then calculate the approximate monthly cost for those resources with
different cloud providers.
Ease of use: You must select a model with no steep learning curve.
Legal Compliance: You need to check whether any relevant low stop you
from selecting any specific cloud deployment model.

Cloud Computing Stack

Benefits of cloud computing
Major cost savings: The potential for major cost savings is arguably
one of the top benefits of cloud computing. With the cloud, the vendor
will handle all the costs associated with setting up your system. You
don’t need to make any hardware or software investments. Nor will
you need to assign the task of maintaining the system to someone in
your team or hire staff if you don’t have the resources in-house.
Always be on the latest software versions: As well as setting up your
system, your cloud vendor can often handle all the costs and effort
associated with maintenance too. That includes functional and
technical updates - these can be automated by the vendor. They will
monitor your system, keep track of updates and automatically release
patches when necessary. That means your business will always be on
the latest system version, giving you a competitive edge.

Potentially faster service deployment: Whether your business is
deploying a new cloud system or you already have one in place and
are looking to scale up or down, it’s easy to do all that in the cloud.
Let’s say you’re deploying a new cloud system. In theory, the system
can be fully functional in minutes (though it can depend on the type of
technology/systems you already have deployed within your business
and the level of modifications).
The same concept goes for scaling up and down. Whether you need to
increase your storage space or reduce the number of users, you only
need to upgrade or downgrade your account with the vendor and/or
add more modular features where required. And within minutes, the
changes will be live.

Easy to access data even when on-the-go: As your data is stored in the
cloud, you can access it wherever you are. All you need is an internet
connection. This is obviously a huge benefit when your office needs to
close temporarily and your staff have to work from home.
The less you can rely on on-premise systems, the easier it can be to
maintain business continuity.
Data is backed up into a secure system: Once your data is stored in the
cloud, it can be automatically backed up. This makes data recovery in
the event of data loss a less time-consuming task (as opposed to data
recovery for an on-premise system). That means you can minimise
downtime.
Fosters cross-team collaboration regardless of location:
Not only can you access your data while on-the-go, the cloud also
makes cross-team collaboration possible. Location/geography doesn’t
have to hold you back anymore.

Risks of cloud computing
1. Loss of Privacy And Security.
Migrating to the cloud means moving all our data to the cloud
database, which not only gives us more flexibility but also gives our
business information to the cloud providers which is nothing but the
loss of privacy of the company's information. Before migration, we
will take care of our data but we don't know much about the
implementation and methodologies which the cloud service providers
are using to protect our data from external data losses and stealing of
information.
2. Cost Management: One of the major reasons for moving to the cloud
is to reduce expenses, but if there is no proper cloud management you
might get bills much higher than your on-premise data centre. There
are many reasons for this one of them is not proper monitoring of the
resources used in the cloud.

Risks of cloud computing
3. Downtime and Geographical Dependencies: Not only does on-premise
have downtime, but cloud platforms also have downtime. Latency and
coverage are also a challenge in migration. When the users of the application
are from different geographical locations There might be latency and
performance issues. One major issue of having different geographical users
are when we deploy our application in different regions some services might
not be available in other regions, so we need to take care of this also.
4. Data Loss, Corruption, and Compromising of Confidential
Data: When we are migrating to the cloud there are large amounts of data
that need to be transferred to the cloud's database which is a hell of a tedious
task and the major reason why many fear doing so. Companies and
organizations have tremendous amounts of data in terabytes etc. Transferring
this data may take weeks and in some cases, months and the work doesn't
end here, After the transfer, it might take weeks to crosscheck whether all the
data is correct or not. We also need to maintain backups of the data, There
can be chances of data loss and corruption of data.

Top Challenges of Cloud Computing
1. Data Security and Privacy: The biggest concern with cloud computing is
data security and privacy. As organizations adopt the cloud on a global scale,
the risks have become more grave than ever, with lots of consumer and
business data available for hackers to breach.
The problem with cloud computing is that the user cannot view where their
data is being processed or stored. And if it is not handled correctly during
cloud management or implementation, risks can happen such as data theft,
leaks, breaches, compromised credentials, hacked APIs, authentication
breaches, account hijacking, etc.
2. Compliance Risks: Compliance rules are getting more stringent due to
the increased cyberattacks and data privacy issues. Regulatory bodies like
HIPAA, GDPR, etc., ensure organizations comply with applicable state or
federal rules and regulations to maintain data security and privacy for their
business and customers. However, compliance is another big challenge for
organizations adopting the cloud.

3. Reduced Visibility and Control: Cloud computing offers the benefit of
not having to manage the infrastructure and resources like servers to keep the
systems working. Although it saves time, expenses, and effort, the users end
up having reduced control and visibility into their software, systems,
applications, and computing assets.
4. Cloud Migration: Cloud migration means moving your data, services,
applications, systems, and other information or assets from on-premises
(servers or desktops) to the cloud. This process enables computing
capabilities to take place on the cloud infrastructure instead of on-premise
devices.
5. Incompatibility:While moving your workload to the cloud from on-
premises, incompatibility issues may arise between the cloud services and
on-premises infrastructure.
This is a big challenge that may require the organizations to invest in making
it compatible by any means or by creating a new service altogether. Either
way, it invites troubles and expenditures for organizations.

6. Improper Access Controls and Management: mproper or inadequate
cloud access controls and management can lead to various risks for an
organization. Cybercriminals leverage web apps, steal credentials, perform
data breaches, and whatnot. They may face access management issues if
they have a large or distributed workforce.
7. Lack of Expertise
Cloud technologies are rapidly advancing, and more and more services and
applications are being released to cater to different needs. However, it’s also
becoming difficult for organizations to find skilled professionals to maintain
the cloud systems. It’s also costly for small and medium-sized businesses to
hire expert cloud professionals.
8. Downtime
Another irritating thing about the cloud for many organizations can be
downtime due to poor internet connection.
If you have a consistent and high-speed internet connection, you can make
the most of their cloud services. But if you don’t, you may face repeated
downtimes, lags, and errors. It not only frustrates the users but also reduces
their productivity. Prof. Vivek R. Shelke

Economic Models of Cloud Computing
Economics of Cloud Computing is based on the PAY AS YOU GO
method. Users/Customers must have to pay only for their way of the
usage of the cloud services.
It is definitely beneficial for the users. So the Cloud is economically
very convenient for all.
Another side is to eliminate some indirect costs which is generated
by assets such as license of the software and their support.
In the cloud, users can use software applications on a subscription
basis without any cost because the property of the software providing
service remains to the cloud provider.
Economical background of the cloud is more useful for developers
in the following ways:
• Pay as you go model offered by cloud providers.
• Scalable and Simple.

Cloud Computing Allows:
• Reduces the capital costs of infrastructure.
• Removes the maintenance cost.
• Removes the administrative cost.
What is Capital Cost?
It is cost occurred in the purchasing infrastructure or the assets that is
important in the production of goods. It takes a long time to generate
profit.
In the case of start-ups, there is no extra budget for the infrastructure
and its maintenance. So cloud can minimizes expenses of any small
organization in terms of economy. It leads to the developers can only
focus on the development logic and not on the maintenance of the
infrastructure.

There are three different Pricing Strategies that are introduced by
Cloud Computing: Tiered Pricing, Per-unit Pricing, and Subscription-
based Pricing. These are explained as following below.
• Tiered Pricing: Cloud Services are offered in the various tiers.
Each tier offers to fix service agreements at a specific cost. Amazon
EC2 uses this kind of pricing.
• Per-unit Pricing: The model is based upon the unit-specific service
concept. Data transfer and memory allocation include in this model
for specific units. GoGrid uses this kind of pricing in terms of
RAM/hour.
• Subscription-based Pricing: In this model, users are paying
periodic subscription fees for the usage of the software.

Service Level Agreement (SLA)
A Service Level Agreement (SLA) is the bond for performance
negotiated between the cloud services provider and the client.
Earlier, in cloud computing all Service Level Agreements were
negotiated between a client and the service consumer.
Nowadays, with the initiation of large utility-like cloud computing
providers, most Service Level Agreements are standardized until a
client becomes a large consumer of cloud services.
Service level agreements are also defined at different levels which
are mentioned below:
• Customer-based SLA
• Service-based SLA
• Multilevel SLA

Service Level Agreements usually specify some parameters which
are mentioned below:
1. Availability of the Service (uptime)
2. Latency or the response time
3. Service components reliability
4. Each party accountability
5. Warranties

SLA Lifecycle

Steps in SLA Lifecycle
Discover service provider: This step involves identifying a service
provider that can meet the needs of the organization and has the
capability to provide the required service. This can be done through
research, requesting proposals, or reaching out to vendors.
Define SLA: In this step, the service level requirements are defined
and agreed upon between the service provider and the organization.
This includes defining the service level objectives, metrics, and
targets that will be used to measure the performance of the service
provider.
Establish Agreement: After the service level requirements have been
defined, an agreement is established between the organization and the
service provider outlining the terms and conditions of the service.
This agreement should include the SLA, any penalties for non-
compliance, and the process for monitoring and reporting on the
service level objectives.

Monitor SLA violation: This step involves regularly monitoring the
service level objectives to ensure that the service provider is meeting
their commitments. If any violations are identified, they should be
reported and addressed in a timely manner.
Terminate SLA: If the service provider is unable to meet the service
level objectives, or if the organization is not satisfied with the service
provided, the SLA can be terminated. This can be done through
mutual agreement or through the enforcement of penalties for non-
compliance.
Enforce penalties for SLA Violation: If the service provider is found
to be in violation of the SLA, penalties can be imposed as outlined in
the agreement. These penalties can include financial penalties,
reduced service level objectives, or termination of the agreement.

Advantages of SLA
Improved communication: A better framework for communication between
the service provider and the client is established through SLAs, which explicitly
outline the degree of service that a customer may anticipate. This can make
sure that everyone is talking about the same things when it comes to service
expectations.
Increased accountability: SLAs give customers a way to hold service providers
accountable if their services fall short of the agreed-upon standard. They also
hold service providers responsible for delivering a specific level of service.
Better alignment with business goals: SLAs make sure that the service being
given is in line with the goals of the client by laying down the performance
goals and service level requirements that the service provider must satisfy.
Reduced downtime: SLAs can help to limit the effects of service disruptions by
creating explicit protocols for issue management and resolution.
Better cost management: By specifying the level of service that the customer
can anticipate and providing a way to track and evaluate performance, SLAs
can help to limit costs. Making sure the consumer is getting the best value for
their money can be made easier by doing this.

Disadvantages of SLA
Complexity: SLAs can be complex to create and maintain, and may
require significant resources to implement and enforce.
Rigidity: SLAs can be rigid and may not be flexible enough to
accommodate changing business needs or service requirements.
Limited service options: SLAs can limit the service options
available to the customer, as the service provider may only be able to
offer the specific services outlined in the agreement.
Misaligned incentives: SLAs may misalign incentives between the
service provider and the customer, as the provider may focus on
meeting the agreed-upon service levels rather than on providing the
best service possible.
Limited liability: SLAs are not legal binding contracts and often
limited the liability of the service provider in case of service failure.

END OF UNIT 1
Thank You!

Cloud Computing Introduction

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