Information Technology Reference
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volume of $11.5 billion (Mertz et al. 2007). Analyst firm IDC estimates the growth
rate of SaaS revenue to be 31% in 2009, which is more than four times of the total
software market's growth rate (IDC 2008c). In October 2008, Gartner updated the
estimates stating world wide SaaS revenue for enterprise application software is
expected to more than double by 2012, reaching $14.5 billion (Gartner 2008c).
4.4 Opportunities and Challenges of Cloud Computing
As described in previous sections, Cloud Computing concerns the delivery of IT
capabilities as a service on three levels: infrastructure (IaaS), platforms (PaaS),
and software (SaaS). By providing interfaces on all three levels, Clouds address
different types of customers:
• End consumers, who mainly use the services of the SaaS layer over a Web
browser and basic offerings of the IaaS layer as for example storage for data
resulting from the usage of the SaaS layer.
• Business customers that might access all three layers: the IaaS layer in order to
enhance the own infrastructure with additional resources on demand, the PaaS
layer in order to be able to run own applications in a Cloud and eventually
the SaaS layer in order to take advantage of available applications offered as a
service.
• Developers and Independent Software Vendors (ISVs) that develop applications
that are supposed to be offered over the SaaS layer of a Cloud. Typically, they
directly access the PaaS layer, and through the PaaS layer indirectly access the
IaaS layer, and are present on the SaaS layer with their application.
In general, for all different kinds of Cloud customers, a Cloud offers the major
opportunities known for X-as-a-Service offerings. From the perspective of the user,
the utility-based payment model is considered as one of the main benefits of Cloud
Computing. There is no need for up-front infrastructure investment: investment in
software licenses and no risk of unused but paid software licenses, and investment in
hardware infrastructure and related maintenance and staff. Thus, capital expenditure
is turned into operational expenditure. Users of a Cloud service only use the volume
of IT resources they actually need, and only pay for the volume of IT resources they
actually use. At the same time, they take advantage of the scalability and flexibility
of a Cloud. Cloud Computing enables easy and fast scaling of required computing
resources on demand.
However, Cloud Computing has also several disadvantages: Clouds serve many
different customers. Thus, users of a Cloud service do not know who else's job
is running on the same server as their own ones (Sun 2009a). A typical Cloud is
outside a company's or other organization's firewall. While this may not play a
major role for consumers, it can have significant impact on a company's decision
to move use Cloud Services. The major risks of Cloud Computing are summarized
in table 4.2.
