Cloudware Economics - Guide to Cloud Computing for Business and Technology Managers - page 293

Data regulations SMEs face the same regulatory data

location issues as large enterprises.

Depending on the company's industry, there may be signiicant regulatory
issues regarding data location. Data that identify the individual in certain
health and inancial contexts are subject to US regulations. Similarly, the EU
has laws that restrict the transfer of certain data outside of its borders.

Data integrity The data integrity and reliability of cloud

suppliers may be higher than that
provided by the existing internal systems.

Cloud technologies are relatively new and storage and data transfer
algorithms slice the data into small units, which are stored and transferred
dynamically within the storage region. Estimating and factoring the risks of
potential data corruption of mission-critical data at this early stage of cloud
implementation may be dificult leading to nonadoption, especially if the
existing internal systems, processes, and protocols are working.

Data transfer costs For new initiatives that do not require the

transfer of legacy data to the clouds,
transfer costs are minimal. Getting locked
into a particular cloud service provider is
currently a market concern due to the lack
of open standards among the providers.

Moving the existing data sets to clouds requires data integrity check to ensure
that all of the data have been transferred fully and that they have not been
corrupted. For very large data sets, this may represent signiicant staff costs.
Cloud vendors typically charge data transfer costs. If the data set is large and
there is signiicant data chum due to transaction processing, it may be more
cost effective to look at more traditional hosting options.

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.