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  | INFORMATIKA | | Vol. XV. No. 1. | 29   CLOUD COMPUTING IN PRACTICE Bálint Molnár –   Gyula Szabó –   András Benczúr   1. ABSTRACT In the past years, Cloud Computing has become the hot topic of literature of technical and infor-mation technology. The Cloud Computing has gained impetus in the applications as well. It can be observed that enterprises in increasing num-ber started moving their application systems into the “Cloud”. In this paper, we discuss the Clou d Computing as an approach for Business Infor-mation Systems and the typical services deliv-ered by the various deployment modes. We pre-sent an overview of the methods for migration of traditional business information systems and their data into Cloud Computing environment. Moreover, we explore the novel selection criteria for ERP systems (Enterprise Resourcing Sys-tems) introduction that emerged in relationship with the Cloud Computing phenomena. One of our aims is to provide a survey about the sub- jects that can be encountered within the first phases during the preparation to plan a migra-tion into a Cloud Computing environment. 2. THE CONCEPT OF CLOUD COMPUTING AND THE TRENDS OF ITS APPLICATIONS Cloud Computing is proliferated as a steadily available, flexible deployable service that can be easily aligned to requirements. One of the basic technologies that enabled the Cloud Computing, the sophisticated virtualization of hardware, op-erating systems and networking. The concept of virtualization: A mapping of architectural building blocks of Information Technology by software tools that is not based on real physical artefacts. However, the mapping produces the same functionality as the physical, hardware building blocks may deliver. What does this conceptualiza-tion mean? A virtual server is operated on one or more physical server, within a soft-ware environment that created by a hard-ware emulation.  The operating system of the virtual server makes use of services of the emulated hardware environment; never-theless the so called   guest operating sys- tem   uses the same interface as it would have been real, physical hardware. Similar statement is valid for the network virtualiza-tion especially for the Virtual Private Network solutions.  ([1]) The virtualized networks within a Cloud Compu-ting environment have specific feature that have some similarity to VPNs ( Virtual Private Net-work  ) in morphological sense but they are not the same, neither technologically nor architec-turally. The Cloud Computing through exploiting the available technology delivers services for da-ta migration within their own infrastructure of service providers and moving the processes among the local and remote data centers that are deployed all over the world. (To leverage the smooth and seamless changeover from a ser-vice provider to other one, proper technologies are anticipated to emerge in the future). The services provided by the Cloud are scalable to avoid the bottle neck of data processing. The next enabler of Cloud Computing is the Internet that provides the opportunity that data and ser-vices can be accessed independently from the geographic location. The concept of Cloud Computing is relatively new for that reason there is not a stable and widely accepted definition. There are circum-scriptions of notion to help the perception: The Cloud Computing is a model that pro-vides the opportunity that distributed re-sources  –  i.e. networks, servers, storage, applications, services  –  can be accessed comfortable any time and from any place and they are easily configurable on demand through a network whereby ensures that the resources will be available quickly and re-quire minimal operating efforts or support from the service provider   ([2], pp. 14.).  Another attempt to define Cloud Computing: The Cloud Computing is a set of services, applications and resources that are offered for the customer through the Internet. The services can be flexibly scaled or custom-ized to requirements without long time capi-tal investment, furthermore without neces-sary skill, knowledge and know-how dedi-cated to operate IT (Information Technolo-gy). The customer freely decides depending on the degree of the vertical integration as whether a complete software application system or only IT infrastructure services are needed   [3].   | INFORMATIKA | 30  | Vol. XV. No. 1. | Figure 1. depicts the creation of Cloud Compu-ting through the evolution of various patterns of data processing. Figure 1. Development of data processing approaches (based on [6])  The Cloud Computing offers various forms of services for customers; the following arts are used most frequently:   IaaS (Infrastructure as a Service),  Cloud infrastructure services typically offer virtu-alization platforms. The customers buy the resources, instead of having to set up servers, software, and data center space themselves, and pay-as-you-go, i.e. the payment happens on the base as re-sources consumed. The tenants deploy their own software on the virtual machines and control and manage it. The virtual machines can be rented for as long as necessary they can be as short as an hour. The amount of virtual machines can be scaled dynamically to fulfill the cu s- tomers’ needs. Billing is based on re-sources, the duration, and additional ser-vices used, e.g. additional storage space. The service provider of Cloud computing generally has data centers in multiple lo-cations to offer quick access all over the world through Internet. Typically, Web in-terfaces allow controlling, monitoring and managing of the Cloud services.   SaaS (Software as a Service),  generally provide specific operational application systems on a Cloud infrastructure. One of the most proliferated solutions is the web-based e-mail  . Most Software as a Service  in the form of Cloud Computing services is web-based applications, which can be accessed from a thin client interface, such as a web browser. A significant difference is that the customers of those services do not manage or control the underlying in-frastructure and application system. The user can configure the services only in a limited way that touches only some very restricted user specific features. Provision for Internet-based storage is also often considered to be part of SaaS offerings. Modules or entire ERP (Enterprise Re-source Planning) systems can be ac-cessed by a scalable way. In this service construction, the task of service providers is the operation and the maintenance of software.   PaaS (Platform as a Service)  provides a managed software infrastructure, where clients can build and deploy certain appli-cations and services using the tools, envi-ronments, and programming languages supported by the actual service provider. PaaS includes the exploitation of the un-derlying infrastructure, such as servers, network, storage, or operating systems which the tenants cannot handle or man-age, as it is abstracted away through vir-tualization and infrastructure management technology below the platform existing hardware and software services. Platform services are mostly targeted at specific domains  –  such as the development of web applications  – , and are dependent on the integrated software development envi-ronment involving the programming lan-guages.   DBaaS (Database as a Service),  services to run database basically can be put into two categories. The customer may buy or rent a virtual machine and the database can run within the virtual instance. o  The tenants can place their own virtual machine image with a database in-stalled on it into the Cloud. o  The user may employ a ready-made virtual machine images that already in-clude an installation of a database.  | INFORMATIKA | | Vol. XV. No. 1. | 31    Although there are obvious advantages of Cloud Computing, but there are several open issues for customers. Critical points for the acceptance of Cloud Computing are security, safety and the protection of users’ data, moreover the location of actual storage for data after migration and transfer. Data transfer can happen for several reasons as load balancing, in sake of efficiency, disaster recovery and business continuity. Large enterprises cannot support the public Cloud concept until the location of data storage can be geographically precisely identified. “Legal env i-ronments and jurisdiction that is different and in-compatible to the domestic one provide no guarantee that third parties may access the da-ta. It may occur that the insurance policy may exclude that the actual and physical storage of data may manifest in specific geographic re- gion.”  [7].  The security requirements make the prolifer-ation of Cloud Computing difficult. The major concern related to Cloud Computing is secu-rity. The enterprises may have to transfer their data and applications into Cloud though the physical locations are either not known or there is no trust in the certain geographic region as there is no proper and direct expe-riences about the security.  [8]. The reference [9] summarizes the issues as it follows: “There is no information in the location of data; we do not know where the servers on which the applications for data processing are executed are hosted; we have no knowledge who is the tenant in the very same virtual envi- ronment where our applications run.”    The enterprises may finally conclude that they tend to operate their critical applications in Cloud or exploiting the advantages of Cloud services through some renting construction. One of the tangible benefits is that the capital and opera-tional expenditure (CAPEX, OPEX) related to the building-up and maintaining an IT infrastruc-ture can be significantly reduced. This value can be measured properly if either the demand for the products of the enterprise is fluctuated enormously, or the enterprise is in an expansion phase, or creation of a data center is not justified by the economy of scale. The customer may exploit the advantages pro-vided by the Cloud Computing in two ways; ei-ther the existing applications will be deployed into the Cloud environment or the customer se-lects business information services from the of-ferings of Cloud, e.g. ERP, that fits the best to its own requirements to run the business In the next section we will discuss both solutions. 3. MOVING BUSINESS INFORMATION SYSTEMS INTO CLOUD Several surveys demonstrate that the applica-tion of Cloud Computing is proliferating. “  On the German market, the total revenue from the busi-ness of Cloud Computing can reach five billion €.”   [4]. IDC (International Development Company)  as a market research and consulting company antici-pates that the Cloud Computing will play a sig-nificant role in the Hungarian economy as well.  A research report about the impact on the Hun-garian economy by Cloud Computing claims that the revenue from Cloud Computing can reach 87,3 billion HUF for the businesses. According to IDC, the Cloud Computing as business will create at least two thousands new job in Hunga-ry. [5]. Migrating the Business Information Systems generally, the ERP systems especially into Cloud emerge as a business issue at several enterprises. In the preparation of a decision, the factors that should be considered are the scala-bility, elasticity, decreasing the operational costs and avoiding a massive infrastructure invest-ment. However, it may occur that the new busi-ness information system cannot be aligned to the changing business environment, e.g. be-cause of an acquisition; so that the information systems should be enhanced. To mitigate this risk, it is necessary to take into account the long term business strategy of the enterprise what business processes are expected to be modified in time. To operate a Business Information System in the Cloud, there is a need for a plan. The plan should include a number of stages to take care several viewpoints. The reference [10] discusses five points to make decision as it follows:   The degree of utilization of Cloud It seems sensible that instead of a Big-Bang ap-proach, i.e. moving all the applications into Cloud, the non-critical applications should be deployed in the Cloud in the first stage, and then later on the modules of the ERP system could be transferred that support the main activities and processes of the business. (N.B.: In the Big-Bang approach, all or most of the developed modules are coupled together to forms a com-plete software system or major part of the sys-tem and then used for integration testing. The Big Bang method is very effective for saving time in the integration testing process).  | INFORMATIKA | 32  | Vol. XV. No. 1. |   Maintaining the independence from soft-ware vendors in the case of ERP The existing ERP system for architectural rea-son is not appropriate to operate in the Cloud so that the demand for rent of an EPR system with-in the Cloud environment appears. It should be taken into account that a new ERP system with-in a Cloud environment is inflexible; it cannot be customized to satisfy individual requirements as the ERP system is used in a multi-tenant envi-ronment. The modification of the system can be achieved cost-effectively only in a single-tenant environment where the customer has a dedicat-ed database and application system adjusted its own requirements.   The priority ranking of data migration  Although the data within the Cloud are protected by high-level and reliable security mechanisms, it could be considered as whether all the data asset of the enterprise will have to be migrated into Cloud? If the data are used and modified most frequently (i.e. critical data) and are moved and permanently stored into Cloud then the backup and recovery could be more efficient within the Cloud environment. (There are soft-ware solutions to block data leakage either in the case of storage of data at the local hardware or in the Cloud. [11]).   Criteria for services and security It should be clarified in advance whether how the data can be accessed, what is the method for the routing of data traffic, the reliability of the security system, the references of potential ser-vice provider. It is advisable that the service pro-vider should possess a certificate in ISO 27001 and the daily operation should follow strictly the prescription of the security management princi-ples and objectives.   Disaster Recovery  A Disaster Recovery Plan should be prepared for the most unlikely risks too, as e.g. flood, fire, terrorism, cyber-attack etc. The loss of data, damage to the infrastructure, temporal break-down in data processing belongs to the respon-sibility of service provider; for this reason appro-priate solution should be developed for handling the situations and the liabilities of the service provider should be contractually formulated. The Cloud service provider should be audited regu-larly for compliance to regulation that can arch over a wide spectrum from finance through ICT (Information and Communication Technology)  to physical and logical security mechanism. The agreement should contain obligations on the aforementioned areas as well. 4. SELECTION CRITERIA FOR BUSINESS INFORMATION SYSTEMS IN CLOUD It can be anticipated that the demand against SaaS solutions increases. According to Gartner, the revenue out of software in Cloud from 12,1 billion $ in 2011 can grow to 21,3 billion $ in 2015, worldwide [12]. The growth in revenue can be explained by the impact of the cost-reduction on the small and medium-sized enterprises as a number of SMEs (Small and Medium Enterpris-es)  may appear as a buyer of services on the market of Business Information and ERP Sys-tems in Cloud. The question arises what kind of criteria should be taken into account in the selection process of Business Information Systems in the Cloud. Which are the new criteria appearing because of Cloud Computing? What are the decisive fea-tures of software in the Cloud that support their proliferation? The question can be answered by the conclusions from literature overview and in-vestigation of case studies in practice. There are four main features as responses:   Modular software architecture: “A comp o-nent-based architecture for ERP system separate and isolate the tiers and layers of architecture that can be flexible modi-fied later on. The component-based archi-tecture provides the opportunity for incre- mental implementation in stages.”   [13]. The component-based architecture as structuring principle supports the selection of functions required for the data pro-cessing activities that are actually needed, e.g. some accounting processes or con-trolling functions.   Scalability: the number of clients that should use the application unconditionally can be identified explicitly then conse-quently the required capacity of servers can be assessed. [14].    Mobility: The accessibility of applications is a must   from the heterogeneous mobile devices (e.g. iPad, iPhone, MID, smart phones etc).   Cost reduction: The Cloud Computing de-creases the capital and operational ex-penditure (CAPEX, OPEX) in opposition to the traditional ERP system. [15].   | INFORMATIKA | | Vol. XV. No. 1. | 33   5. SUMMARY The Cloud Computing can be regarded as a high-level implementation of the dynamic infra-structure  that can unify the available computing capacities through the virtualization that creates an “IT factory” that delivers its services on d e-mand to the potential customers. There are de-finitive advantages of the Cloud Computing Technology but there exist uncertainties. The security issue is a critical focus point whether to adopt the Cloud Computing Technology by an enterprise so that it is worth considering the se-curity service level that a given service provider can deliver. Up till now there are not widely ac-cepted, unified standards for security in Cloud Computing environment, but the rapid develop-ment promises that the emerging standards and best-practices can deal with the security prob-lems at an acceptable level. There some com-mercial Cloud service providers that is an exam-ple to other players. We have discussed only a minor part of the topic of Cloud Computing that relates to the selection and operation of applica-tions in Cloud. The spread of Cloud Computing can be observed in all sectors of economy that can be perceived as reaction and response to the crisis of finance and economy in the form of evolution of IT. It may be considered as the next stage in the development of computing technol-ogy that becomes part of our everyday life. 6. REFERENCES [1] What are the security risks in Cloud? In Hungarian: /cloud-biztonsag-szakertoi-cikk-holtzl-peter (accessed: 2012-08-07) [2] Position paper. Security proposals for a Cloud Service Provider. In German, Downloads/DE/BSI/Mindestanforderungen/ Eckpunktepapier-Sicherheitsempfehlungen-CloudComputing-Anbieter.pdf;jsessionid= 07F82607FB8632F14F0DC0A96F9BD4F9.2 _cid286?__blob=publicationFile Bundesamt für Sicherheit in de r Informati-onstechnik (BSI): Eckpunktepapier. Sicher- heitsempfehlungen für Cloud  -Computing- Anbieter  . (accessed: 2012-10-30) [3] Repschläger, J., Zarnekow, R.: IT-Outsourc-ing and Cloud-Sourcing Similarities and Dif-ferences. in German, IT-Outsourcing und Cloud-Sourcing  –  Gemeinsamkeiten und Unterschiede. ERP Management 7 (2011) 1, pp 48-51 [4] Announcement of Federal Ministry for Edu-cation and Research about the Guidelines to support research for security in Cloud Com-puting. In German: Bekanntmachung des Bundesministeriums für Bildung und Fo r- schung von Richtlinien zur Förderung von Forschungsinitiativen zum Sicheren Cloud Computing (accessed: 2012-10-01) [5] The Hungarian SMEs can see their future in the Cloud. In Hungarian: /120228_01.aspx Felhőben képzelik el  jövőjüket a magyar kisvállakozások  . Com- puterword, 2012. február 28. (accessed: 2012-11-01) [6] Voas, J., Zhang, J.: Cloud Computing: New Wine or Just a New Bottle?  Computer org/ IT PRO March/April 2009. ©Published by IEEE [7] Weinhardt, Ch. Anandasivam, W.A. Blau, B. Borissov, N. Meinl, Th. Michalk, W.W: Cloud-Computing  –  Delimitation, Business Model and Research Topics. In German:  Cloud-Computing- Eine Abgrenzung, Ge- schäftsmodelle und Forschungsgebiete . Wirtschaftsinformatik, 5/2009 [8] Issues of Securities Makes Difficult Spread-ing the Cloud Computing, in Hungarian. (accessed: 2012-11-07) [9] Racskó, P.:  Cloud Computing on the Sky of European Union . In Hungarian:  A számítá s- technikai felhő az Európai Unió egén . Veze- téstudomány, Nr. 1/2012, 2 -16. oldal, ISSN: 0133-0179. Budapest, 2012 [10] How does the ERP system operate in Cloud? In Hungarian: mukodhet_a_vallalatiranyitas_a_felhoben/ (accessed: 2012-10-07) [11] Fujitsu Develops Inter-Cloud Data Security Technology, New data leakage prevention technology in cloud computing environ-ments. archives/month/2010/20101019-01.html (accessed: 2012-11-07) [12] Rosbach, M., Jung-Elsen, S.: ERP on de-mand  . In German: ERP Management, Nr. 3/2011, S. 51-52 [13] Gschneidinger, W.: Requirements against ERP Systems.  In German:  Anforderungen an ERP-Systeme.  ERP Management, Nr. 1/2011, S. 61
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