Challenges of Cloud Computing

**5. Challenges of Cloud Computing**

There are varieties of concerns related to cloud computing or of migrating business practices to the cloud.  As can be seen in the graph below from IDC Predictions, security, availability and performance top the list [15].  We will briefly describe what we view as some of the top obstacles in cloud computing starting with security and confidentiality.

**5.1 Security and Confidentiality**

Data security and confidentiality are the most cited objections to cloud computing [1,4,8].  Systems are exposed to more attacks because current cloud offerings are essentially public rather than private networks.  Concerns of security appear at all levels of cloud computing such as data transmission security, application security, data storage security and security related to third party resources [8].  Guaranteeing the location of a company’s specific set of servers, in a specific location is not yet available by providers.  However, providers are improving as they understand the need for location of customer accounts and security due to a variety of national laws requiring SaaS providers to keep customer copyrighted material and data within national boundaries.

**5.2 Regulation**

Businesses not using cloud computing are in control of their data and how the data is physically stored.  Providers can store and process data in the cloud in physical locations that can be anywhere in the world which is a drawback of converting to cloud computing [5].

If data is stored in a country other than its owner, legal risks such as software licensing and data protection become a concern.  Which privacy laws need to be followed if data is in a country other than its owner [5]?  Audit ability regulations such as the Health and Human Services Health Insurance Portability and Accountability Act (HIPAA) and Sarbanes-Oxley which are public company accounting reforms, place strict regulations for such applicable businesses need to be taken into account [5].

**5.3 Availability, Reliability and Disaster Recovery**

Cloud computing relies on the internet and the availability of high-speed access to all its customers [1,4].  Frequently mentioned in the literature as an obstacle of cloud computing is outage of service.  Services must be available and reliable to support around the clock computing.  Therefore, companies must have proper contingency plans in place in the event of failures or outages [1,4,8].  Structured recovery plans must also be in effect in the case of catastrophic failure or disaster if the business is to survive.  Additionally, provider stability is a concern.  What happens in the event the provider files bankruptcy?

Disaster recovery is usually done by replicating resources in a number of places and can cost large organizations 2-4% of the IT budget.  Be it natural or man-made type of disasters, many things can go wrong in enterprise computing such as how providers are preparing for this.  Do providers replicate resources in different places or within their own system?

**5.4 Performance and Pricing Model**

Lack of standardization concerns may have different outcomes for companies wanting to convert to cloud computing.  A critical component for adoption of cloud computing is interoperability and portability of information between public and private clouds [4].  A concern of lock-ins and the loss of governance of information due to lack of interoperability is inhibiting some businesses from incorporating cloud computing.  Another hurdle for companies in converting to cloud is the lack of standardized application program interfaces and platform technologies which prohibits easy transfer from one cloud provider to another [1].  Data loss and leakage are technical risks associated with performance as well as a company not be able to make necessary changes in application features easily because IT is controlled off-premise.  As far as providers are concerned, it may be difficult to remove large-scale errors in distributed systems.

Cost savings and effectiveness are considered a benefit of cloud computing, however, pricing modules depend on services purchased and are also not standardized.  A consideration for larger enterprises that have achieved “best of breed” efficiencies from their computing operations, is that cloud computing may not be cost-effective.  On the other end of the spectrum, how costly and difficult would it be to bring IT services back in-house for a company [4]?

**5.5 Adopting an Innovation and Threat to Corporate IT Culture**

Corporations will decide whether or not to adopt an innovation based on different parameters.  Is the innovation compatible and consistent with the internal organizational and information systems?  Is this innovation compatible with the business strategy in experience, work practice, organizational needs and existing values?  An influential factor that determines a manager’s intention to adopt e-commerce is compatibility between e-commerce and firm’s culture, value and work practices.  If the innovation is thought to be a difficult task and require more technical skills it will reduce the likelihood of adoption.  Can the organization experiment with the innovation before adopting it?  If so, the likelihood of adoption increases.  Is the impact of the innovation positive and observable to others?  If so, it is more likely an organization will adopt it.

Factors that are considered threats to corporate IT culture and potentially affect IT professionals use of cloud computing include job security, IT audit policies and data security.