Financial managers and business executives now have another variable added to the list of their worries. The quest to create IT value through IT investments has made organizations to continually embrace cloud computing and outsourcing of IT services. This new trend in the accomplishment of computing services opened up a new concern for business executives- financial and security implications.
CLOUD COMPUTING EXPLAINED
In common parlance, cloud computing is the process of performing computing operations through a computer network connection without having to own or control computing hardware and networking infrastructures. Cloud computing heavily relies on virtualization technology. Think of cloud computing as you having the ability to plug into a pool of computing power and getting your computer jobs done without you having to worry about how to get it done. Just like the way you switch on your power outlet and make use of electricity without having to own or control electricity generating gadgets.
BENEFITS OF CLOUD COMPUTING
The benefits of cloud computing includes: saving overhead costs that relates to; cooling of equipment, electricity, physical security of computers, real estate rent, softwares and computer operators salaries.
Apart from cost reduction benefits, other benefits of cloud computing includes:
- Speed of execution
- Transparent cost drivers
- Extended benefits of outsourcing
- Loss of control
- Financial loss
- Store non private data in the cloud
- Use data-a-rest encryption when engaging the service of cloud computing vendor for database as a service (DaaS)
- Retain high sensitive data in-house
- Avoid establishing contact between data in house and data with cloud computer vendors
- Secure network connections for cloud administration
- Diversify i.e. use more than one
- Audit and log administrative actions and key entry point
Companies can also contact the services of auditors during the contractual level of cloud computing. An auditor will help review the policy of the potential cloud computing vendor’s vulnerability policies. Again, auditors also help ensure that the cloud vendor strictly adhered to relevant legislations like: the Privacy Acts, Gramm-Leach-Bliley Act, etc
The impact of cloud computing on the finance of both companies and individuals as far as InfoTech is concerned. Companies that want to reap bountifully from the competitive advantage that cloud computing and IT service outsourcing have to offer will have to evaluate risks of cloud computing and take appropriate measures to mitigate its effect on the finance of businesses.