Cloudware Economics - Guide to Cloud Computing for Business and Technology Managers - page 292

TABLE 14.2 ( Continued )
Economic Costs of Cloud Adoption

Economic Costs Small and Medium Enterprises (SMEs) Large Enterprises

Integration costs and
legacy application
reengineering

In start-ups and small companies,
potentially little or no integration is
required between cloud applications and
legacy applications.

Potentially signiicant costs to have new cloud applications interact with
legacy applications or to modify legacy applications to ofload processing to
cloud-based components. Conversely, there may be advantages to
reengineering legacy applications and hosting them in a public cloud when
integrating Web 2.0 functionality with legacy applications.

Software licensing Cloud services (SaaS and PaaS) provide

signiicant software licensing cost savings
for start-ups and small companies.

Migrating large enterprises to cloud-based SaaS may not be cost effective
relative to the existing enterprise licensing agreements. Depending on the
licensing agreements for third-party software, especially if licensing fees are
based on the number of CPUs using the software, hosting legacy applications
in a cloud environment may involve signiicantly increased licensing costs or
noncompliance with the agreements if the software is installed on a machine
image used for autoscaling as the user demand increases.

Cloud availability—
rolling brownouts

Unavailability of the cloud services or slow
performance due to heavy trafic is a
serious concern when choosing a cloud
vendor.

Same as with SMEs. Currently, even large vendors have experienced slow
performance or suspended service due to overwhelming utilization.

Data security SMEs are better able to use third-party

services such as payment processing to
handle secure transactions.

Data are an enterprise's most important IT and operating asset. Current
uncertainty regarding the security of the data assets stored in public clouds is
one of the most signiicant barriers in cloud adoption. Large enterprises may
not want their data stored in countries where intellectual property piracy is
prevalent. Some companies may not want their data stored on equipment
used by their competitors.

Data conidentiality SMEs face the same data conidentiality

issues as large enterprises.

One of the advantages of cloud computing and storage for conidentiality is
that the data transfer and storage algorithms encrypt the data into units that
are dificult to reconstruct without the specialized algorithms/keys if the data
are intercepted in transfer or the cloud security is compromised.