University Report: KIT714 - Impact of Cloud Computing on Businesses

This report delves into the impact of cloud computing on businesses, examining its advantages, limitations, and overall effect on business operations. The report begins with an introduction that outlines the research topic, search strategy, and major themes. It then discusses the increasing implementation of cloud computing to enhance business operations, emphasizing its role in executing applications on a shared, multi-tenant platform. The report explores the advantages of cloud computing, such as cost reduction, convenience, ease of use, increased reliability, and improved security. It also addresses the limitations, including potential communication failures, data security risks, and legal complexities. The report concludes by summarizing the positive impact of cloud technology on businesses while acknowledging the need for careful consideration of its limitations. The report provides a comprehensive overview of cloud computing's role in modern business environments.

Running head: IMPACT OF CLOUD COMPUTING ON BUSINESS
IMPACT OF CLOUD COMPUTING ON BUSINESS
Name of student
Name of university
Author’s note:

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IMPACT OF CLOUD COMPUTING ON BUSINESS
Table of Contents
Introduction....................................................................................................................2
Discussion......................................................................................................................2
Impact of the adoption of cloud technology in the businesses...................................3
Advantages of adopting cloud technology for the businesses...................................5
Limitations of the cloud technology for the businesses.............................................6
Research question.......................................................................................................7
Conclusion......................................................................................................................7
References......................................................................................................................9

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Introduction
This report aims to discuss the aspects of the impact of cloud computing on business.
The research topic selected for the literature review is the impact of cloud computing on
business organisations. The search strategy that is used for the searching process is the search
engines such as Google and Yahoo. The discussion of the narrowing down of the searches
that include the exclusion and the inclusion of the criteria that is used is briefly stated in this
report. The major themes in the articles are briefly identified and discussed in this report.
Lastly, this report concludes with an appropriate conclusion for the report.
Discussion
The articles that were discovered on the google and the yahoo search engines
provided the strong evidence regarding the impact of the cloud computing on the businesses,
and it resulted that there are the businesses are increasing to implement the functions of the
cloud computing for enhancing the business operations (Oliveira, Thomas and Espadanal
2014). The cloud computing is the enhanced technology for running the businesses. Rather
than running all the applications of the business on the LAN or any PC, these functions are
executed on the shared multi-tenant. It is oriented on the self-service for using any of the
application that executes in the cloud, log in, and it customises according to the requirement
of the customers and starts utilising it (Gangwar, Date and Ramaswamy 2015). The
applications of cloud cost significantly less as the customer does not require to pay for any of
the hardware and the software that is being used by them like the accounting, CRM, HR and
the custom-built applications or the extensive maintenance and the configuration of the
complete stack of the technology for running them. The cloud provides the enhanced
scalability, increased reliability and increased security in the devices. Along with this, the
completion of the upgrades is done periodically by the cloud providers for facilitating the

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recently developed security mechanisms, features, performance improvements automatically
(Ahmed and Hossain 2014). The technology of cloud follows the model of pay-as-you-go.
Lastly, the cloud applications and the adaptation of the cloud technology do not consume the
valuable IT resources of a company (Nowicka 2014). And the adoption of the cloud permits
all the customers to emphasise on the deployment of several more applications, any new
projects and the innovation.
Impact of the adoption of cloud technology in the businesses
There are several consequences of adopting cloud technology in businesses. Some of
the consequences of adopting the cloud technology are the reduction of cost, privacy and
security, reliability and the collaboration facilitated by sharing.
Convenience and ease of use: The employees of the small businesses frequently work
outside actual office location and therefore has access to the data is a great advantage for the
businesses. This requirement for the employees of having access from the remote locations
and the increase in the number of the online transaction requires the solution of cloud
computing (Avram 2014). The work of finance and accounting are commonly outsourced to
the cloud, and this provides the businesses with the abundant time for the squandering for the
executives of the small businesses on the strategic initiative and the work. The accountants in
the present business environment are adopting the technology of cloud for the SMEs clients
for the convenient and nominal monthly fee. The approach of the cloud assists in the
elimination of the administrative overhead, and it allows the access from any of the
geographical location or any device or from many organisations (Almorsy, Grundy and
Müller 2016). The devices that might be less powerful are now able to create the majority of
the sections from the IT systems on the backend of the companies through the simple
interfaces that are based on the web like the management console of AWS.

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Reduction of the cost: Because of the model of subscription, there could be significant
savings in the cost for the small firms. The cost of access for the small firms that are utilising
the intelligence and the analytics of the business that requires a huge amount of computing
power and it consumes a significant amount of power might be lowered using the technology
of cloud. It has been observed that the adoption of the cloud technology by the businesses
might help in lowering the cost reduction of almost 70% since the companies adopt the
technology of the AWS as their vendor of cloud (Etro 2015). The adoption of the AWS might
help in the reduction of the prices several times despite the absence of the competitive forces.
The European SMEs that are more averse to the risks as compared to the SMEs in the USA
appreciates the reduction of the costs of the fixed assets of IT and the reduction of the
maintenance costs of the IT assets and it results to the lowering of the entry barrier. As per
the revenue model per user, the small businesses might be able to afford the applications of
the enterprise like the CRM, which is also known as the Customer Relationship Management
and the SCM, which means Supply Chain Management (Wang et al. 2016). The power of
computing is in recent days are considered as the article of trading because of the entry of the
various players, and it offers the inexpensive cost. The small businesses, as well as the
startups, could now afford the applications like the ERP, CRM, SCM and the SFA.
Reliability: As the services of the cloud are available to the authorised users round the
clock, it increases the reliability of the cloud technology. The employees could make a call to
the cloud centre rather than depending on the staff that are available in the house (Opara-
Martins, Sahandi and Tian 2014). The features of the redundancy of data that is available to
the providers of the cloud users provide the extra benefit of obtaining the required data
whenever it is required by the employees. In recent times, there was a situation in the Netflix
where the data redundancy helped the company to stay buoyant on the online platform even
though there was a failure of the AWS. For the SMEs, the reliability of the cloud services is

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immensely important, but it is not so crucial as it is for large companies. The portability of
the data of the end-user to any other cloud provider in the situation of the failure of the
primary provider. The lack of interoperability is the major issue that is still existing across the
landscape of cloud computing (Carcary, Doherty and Conway 2014). Along with this, the
reliability could get impacted due to the downtime of the various solutions of the commercial
cloud. The required level of reliability needs to be maintained despite the lower prices of the
cloud services like the Amazon, google docs and the Gmail that results in the setting up of the
backup cloud systems.
Privacy and security: The organisations who are discussing the adoption of cloud
technology are increasingly concerned about having their personal control. The security on
the cloud is significantly good as the risks gets minimised because of the encryption and
authentication (Lian, Yen and Wang 2014). The security is extensively heightened by the
activities of monitoring, the tracking of the transactions and it offers the option of selective
access to the users and then using the strong password. There might be a situation that the
physical storage might be lost in the organisation and it would mean a significant loss of data.
The installation of the security patches could be avoided in the manner that could help in
saving significant time (Garrison, Wakefield and Kim 2015).
Advantages of adopting cloud technology for the businesses
Cloud computing could provide several benefits for organisations. Some of the
advantages are:
Flexibility: The cloud based services could help in rapidly meeting the demands of the
business of the organisations with offering the various costs
Lack of no-upfront cost: The services of cloud computing are commonly paying as
per the use, and it eliminates the issue of the paying initially (Alkhater, Wills and Walters

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2014). As cloud computing is easier to deploy, the businesses comprise of the marginal
startup costs of the projects and then expectable prevailing expenses of operation.
Enhancement of collaboration: The use of the cloud computing increases the
collaboration by permitting the synchronisation among the employees, and it allows the
working on the documents and the shared applications concurrently as per their requirement
(Al Mourad and Hussain 2014). This permits the following colleagues and the records for
receiving the critical updates instantaneously.
Automatic updates of the software: The providers of the cloud service execute the
task of maintaining the servers that include the upgrades of the software, the updates of the
security, releasing the time and the resources of the customers for performing various other
works (Fitó and Guitart 2014).
Security: The businesses who are storing their sensitive data in the cloud gain the
ability to access the data from anywhere anytime if they possess the proper authorisation.
Limitations of the cloud technology for the businesses
Even though cloud technology provide several benefits for the businesses, it might
comprise of significant disadvantages. Some of the disadvantages of adopting cloud
technology are:
The failure in communicating with the cloud service provider might lead to the
shutdown of the service of the cloud (Hanelt et al. 2015).
The transmitting of the data on the system that is publicly accessible communication
might have the serious danger of eavesdroppers accessing the data and there might cause the
theft of sensitive data and this task is executed by the tapping of the line of communication

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and then stealing the data from the communication line or corrupting the data that is present
in the disk storage (El-Gazzar 2014).
Deterioration of quality of the service of any provider of cloud or any provider who is
ceasing their operations due to the bankruptcy (Dimitriu and Matei 2014).
The complex problems on the legal grounds might arise if any of the servers of the
providers are in the foreign country and the data or the program of the organisation are stolen
or corrupted. The organisation should ensure that the laws are applicable while the signing of
the SLA with the service providers of the cloud (Khanagha, Volberda and Oshri 2014).
It is presently recommended to the organisation not to place their sensitive or the
confidential data on the cloud as there is a significant rise of the people and the organisations
who use the cloud services.
Research question
Even though cloud technology provides several benefits to the organisations, is the
adoption of cloud technology a suitable option for the businesses?
Conclusion
Therefore, it can be concluded that cloud technology might impact positively on the
businesses, but there are several limitations of the cloud technology that needs be monitored.
The cloud computing is the enhanced technology for running the businesses. Rather than
running all the applications of the business on the LAN or any PC, these functions are
executed on the shared multi-tenant. It is oriented on the self-service for using any of the
application that executes in the cloud, log in, and it customises according to the requirement
of the customers and starts utilising it. The convenience and ease of use provide the
employees of the small businesses frequently work outside actual office location and

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therefore has access to the data is a great advantage for the businesses. The reduction of the
cost offers several benefits because of the model of subscription. There could be significant
savings in the cost for the small firms. The aspect of the reliability is offered as the services
of the cloud are available to the authorised users round the clock; it increases the reliability of
the cloud technology. The privacy and security are provided to the organisations who are
discussing the adoption of cloud technology are increasingly concerned about having their
personal control.

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References
Ahmed, M. and Hossain, M.A., 2014. Cloud computing and security issues in the
cloud. International Journal of Network Security & Its Applications, 6(1), p.25.
Al Mourad, M.B. and Hussain, M., 2014. The impact of cloud computing on ITIL service
strategy processes. International Journal of Computer and Communication
Engineering, 3(5), p.367.
Alkhater, N., Wills, G. and Walters, R., 2014, December. Factors influencing an
organisation's intention to adopt cloud computing in Saudi Arabia. In 2014 IEEE 6th
international conference on cloud computing technology and science (pp. 1040-1044). IEEE.
Almorsy, M., Grundy, J. and Müller, I., 2016. An analysis of the cloud computing security
problem. arXiv preprint arXiv:1609.01107.
Avram, M.G., 2014. Advantages and challenges of adopting cloud computing from an
enterprise perspective. Procedia Technology, 12, pp.529-534.
Carcary, M., Doherty, E. and Conway, G., 2014. The adoption of cloud computing by Irish
SMEs-an exploratory study. Electronic Journal of Information Systems Evaluation, 17(1),
p.3.
Dimitriu, O. and Matei, M., 2014. A new paradigm for accounting through cloud
computing. Procedia economics and finance, 15, pp.840-846.
El-Gazzar, R.F., 2014, June. A literature review on cloud computing adoption issues in
enterprises. In the International Working Conference on Transfer and Diffusion of IT (pp.
214-242). Springer, Berlin, Heidelberg.

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IMPACT OF CLOUD COMPUTING ON BUSINESS
Etro, F., 2015. The economics of cloud computing. In Cloud Technology: Concepts,
Methodologies, Tools, and Applications (pp. 2135-2148). IGI Global.
Fitó, J.O. and Guitar, J., 2014. Business-driven management of infrastructure-level risks in
Cloud providers. Future Generation computer systems, 32, pp.41-53.
Gangwar, H., Date, H. and Ramaswamy, R., 2015. Understanding determinants of cloud
computing adoption using an integrated TAM-TOE model. Journal of Enterprise
Information Management, 28(1), pp.107-130.
Garrison, G., Wakefield, R.L. and Kim, S., 2015. The effects of IT capabilities and delivery
model on cloud computing success and firm performance for cloud supported processes and
operations. International Journal of Information Management, 35(4), pp.377-393.
Hanelt, A., Piccinini, E., Gregory, R.W., Hildebrandt, B. and Kolbe, L.M., 2015, March.
Digital Transformation of Primarily Physical Industries-Exploring the Impact of Digital
Trends on Business Models of Automobile Manufacturers. In Wirtschaftsinformatik (pp.
1313-1327).
Khanagha, S., Volberda, H. and Oshri, I., 2014. Business model renewal and ambidexterity:
structural alteration and strategy formation process during transition to a Cloud business
model. R&D Management, 44(3), pp.322-340.
Lian, J.W., Yen, D.C. and Wang, Y.T., 2014. An exploratory study to understand the critical
factors affecting the decision to adopt cloud computing in Taiwan hospital. International
Journal of Information Management, 34(1), pp.28-36.
Nowicka, K., 2014. Smart city logistics on cloud computing model. Procedia-Social and
Behavioral Sciences, 151, pp.266-281.

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Oliveira, T., Thomas, M. and Espadanal, M., 2014. Assessing the determinants of cloud
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Opara-Martins, J., Sahandi, R. and Tian, F., 2014, November. Critical review of vendor lock-
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Information Society (i-Society 2014) (pp. 92-97). IEEE.
Wang, N., Liang, H., Jia, Y., Ge, S., Xue, Y. and Wang, Z., 2016. Cloud computing research
in the IS discipline: A citation/co-citation analysis. Decision Support Systems, 86, pp.35-47.