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CA Atul C. Bheda Mumbai.

Cloud C

Compiled by

CA Atul C .


Cloud computing is a method of using

shared or

rented resources with help of Internet.
These resources

can be data storage, applications,
networking, development platforms
and ot
her such services and other resources.

With the help of cloud computing the use of the resources are optimised.
are not only shared by multiple users but are also
allocated and

allocated per
Thus when resources are used i
n India during day time, same resources
may be idle or less occupied in night and thus can be used in US or Canada and visa
versa. Thus the resources are
ed as per the need and availability and thus used
optimally and it becomes very cost effective
helps in

ing the use of
computer and computing resources.
This also helps

reducing environmental damage
consumption of less electricity
, power, space, cooling, manpower
for a vari


The National Institute of Standards and Tech
nology's definition of cloud computing
identifies "five essential characteristics":

demand self

A consumer can unilaterally provision computing capabilities,
such as server time and network storage, as needed automatically without requiring
an interaction with each service provider.

Broad network access.

Capabilities are available over the network and accessed through
standard mechanisms that promote use by heterogeneous thin or thick client platforms
(e.g., mobile phones, tablets, laptops,
and workstations).

Resource pooling.

The provider's computing resources are pooled to serve multiple
consumers using a multi
tenant model, with different physical and virtual resources
dynamically assigned and reassigned according to consumer demand.


apid elasticity.

Capabilities can be elastically provisioned and released, in some cases
automatically, to scale rapidly outward and inward commensurate with demand. To the

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consumer, the capabilities available for provisioning often appear unlimited and ca
n be
appropriated in any quantity at any time.

Measured service.

Cloud systems automatically control and optimize resource use by
leveraging a metering capability at some level of abstraction appropriate to the type of
service (e.g., storage, processing, b
andwidth, and active user accounts). Resource usage
can be monitored, controlled, and reported, providing transparency for both the provider
and consumer of the utilized service

Cloud Computing is the result of evolution and adoption of existing technologi
es and
paradigms. The goal of cloud computing is to allow users to take benefit from all of
these technologies, without the need for deep knowledge about or expertise with each
one of them. The cloud aims to cut costs, and help the users focus on their core

instead of being impeded by IT obstacles. The main enabling technology for cloud
computing is
. Virtualization abstracts the physical infrastructure, w
hich is
the most rigid component, and makes it available as a soft component that is easy to use
and manage. By doing so, virtualization provides the agility required to speed up IT
operations, and reduces cost by increasing infrastructure
. On the other hand,
autonomic computing automates the process through which the user can provision
. By minimizing user involvement, automation speeds up the
process and reduces the possibility of human errors. Users face difficult business
problems every day. Cloud computing adopts concepts from

(SOA) that can help the user break these problems into

that can be
integrated to provide a solution. Cloud computing provides all of its resources as
services, and makes use of the well
established standards and best practices gained in
the domain of SOA to allow global and easy access to c
loud services in a standardized
way. Cloud computing also leverages concepts from
utility computing

in order to

for the services used. Such metrics are at the core of the public cloud
use models. In addition, measured services are essential parts of the feedback
loop in autonomic computing, allowing services to s
cale on
demand and to perform
automatic failure recovery.

When the entities start using t
he term "moving to cloud"


means that the entities will
reduce its investment in the buying of hardware etc which one can classify as Capital
expenditure or CAPEX an
d increase the use of
shared or rented resources with help of

and pay as they use the resources which one can classify as operational
expenditure or OPEX

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This concept of using
cloud computing
entities will reduce capital cost on computer
and focus on
their core competency business and leave the computer
resources to the expert service providers. This will help in using updated
, software, hardware which will
run faster, with improved manageability
and less mainte
nance, and enables

adjust with the rapidly

ever changing IT

and also to

fluctuating and unpredictable business

Cloud computing is mostly used to sell hosted services in the sense of
service provisioning

that run
client server

software at a remote location. Such services
given popular acronyms like 'SaaS' (Software as a Service), 'PaaS' (Platform as a
Service), 'IaaS' (Infrastructure as a Service), 'HaaS' (Hardware as a Service)
Service, Collaboration
Service, Business Process
Service, Database
Service, network as a service (NaaS) and communication as a service (CaaS)
and finally
'EaaS' (Everything as a Service). End users access cloud

through a
web browser
thin client

mobile app

while the
business software

and user's data are
stored on servers at a remote location.

Infrastructure as a service (IaaS)

In the most basic cloud
service m
odel, providers of IaaS offer computers

physical or
(more often) virtual machines

and other resources. IaaS clouds often offer additional
resources such as a virtual
disk im

library, raw (block) and file
storage, firewalls, load balancers, IP addresses, and software bundles. IaaS
providers supply these resources on
demand from their large pools installed in
. For

connectivity, customers can use either the Internet or

(dedicated virtual private networks).

To deploy their applications, cloud users install operating
system images and their
application software on the cloud infrastructure. In this model, the cloud user patches
and maintains th
e operating systems and the application software. Cloud providers
typically bill IaaS services on a utility computing basis

cost reflects the amount of
resources allocated and consumed.

Cloud communications

cloud telephony
, rather than replacing local computing
infrastructure, replace local telecommunications infrastructure with
Voice over IP

other off
site Internet services.

Platform as a service (PaaS)

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In the PaaS model, cloud providers deliver a
computing platform
, typically including
operating system, programming language execution environment, database, and web
server. Application developers can develop and run their software solutions on a cloud
platform without

the cost and complexity of buying and managing the underlying
hardware and software layers. With some PaaS offers, the underlying computer and
storage resources scale automatically to match application demand so that the cloud user
does not have to alloca
te resources manually. The latter has also been proposed by an
architecture aiming to facilitate real
time in cloud environments.

Software as a service (SaaS)

In the
business m

using software as a service (SaaS), users are provided access to
application software and databases. Cloud providers manage the infrastructure and
platforms that run the applications. SaaS is sometimes referred to as "on
software" and is usual
ly priced on a pay
use basis. SaaS providers generally price
applications using a subscription fee.

In the SaaS model, cloud providers install and operate application software in the cloud
and cloud users access the software from cloud clients. Cloud u
sers do not manage the
cloud infrastructure and platform where the application runs. This eliminates the need to
install and run the application on the cloud user's own computers, which simplifies
maintenance and support. Cloud applications are different f
rom other applications in
their scalability

which can be achieved by cloning tasks onto multiple

at run
time to meet changing work demand

Load balancers

distribute the
work over the set of virtual machines. This process is transparent to the cloud user, who
sees only a single access point. To accommodate a large number of cloud us
ers, cloud
applications can be
, that is, any machine serves more than one cloud user
organization. It is common to refer to special types of cloud based application softw
with a similar naming convention:
desktop as a service
, business process as a service,
test environment as a service
, communication as a service.

The pricing model for SaaS applications is typically a monthly or yearly flat fee per
user, so price is

scalable and adjustable if users are added or removed at any point.

It is
ed that

SaaS allows a business the potential to reduce IT operational costs by
outsourcing hardwa
re and software maintenance and support to the cloud provider. This
enables the business to reallocate IT operations costs away from hardware/software
spending and personnel expenses, towards meeting other goals. In addition, with
applications hosted centr
ally, updates can be released without the need for users to

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install new software. One drawback of SaaS is that the users' data are stored on the
cloud provider's server. As a result, there could be unauthorized access to the data.

Cloud computing types

vate cloud

Private cloud is cloud infrastructure operated solely for a single organization, whether
managed internally or by a third
party and hosted internally or externally. Undertaking a
private cloud project requires a significant level and degree of e
ngagement to virtualize
the business environment, and requires the organization to reevaluate decisions about
existing resources. When done right, it can improve business, but every step in the
project raises security issues that must be addressed to preve
nt serious vulnerabilities.

They have attracted criticism because users "still have to buy, build, and manage them"
and thus do not benefit from less hands
on management, essent
ially "lacking the
economic model that makes cloud computing such an intriguing concept".

Public cloud

A cloud is called a 'Public cloud' when the services are rendered over a network that is
open for public use. Technically there may be little or no diffe
rence between public and
private cloud architecture, however, security consideration may be substantially
different for services (applications, storage, and other resources) that are made available
by a service provider for a public audience and when commu
nication is effected over a
trusted network. Generally, public cloud service providers like Amazon AWS,
Microsoft and Google own and operate the infrastructure and offer access only via
Internet (direct connectivity is not offered).

Community cloud

Community cloud

shares infrastructure between several organizations from a specific
community with common concerns (security, compliance, jurisdiction, etc.), whether
managed i
nternally or by a third
party and hosted internally or externally. The costs are
spread over fewer users than a public cloud (but more than a private cloud), so only
some of the cost savings potential of cloud computing are realized.

Hybrid cloud

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Hybrid c
loud is a composition of two or more clouds (private, community or public)
that remain unique entities but are bound together, offering the benefits of multiple
deployment models. Such composition expands deployment options for cloud services,
allowing IT
organizations to use public cloud computing resources to meet temporary
needs. This capability enables hybrid clouds to employ cloud bursting for scaling across

Cloud bursting is an application deployment model in which an application runs in a
ivate cloud or data center and "bursts" to a public cloud when the demand for
computing capacity increases. A primary advantage of cloud bursting and a hybrid cloud
model is that an organization only pays for extra compute resources when they are

Cloud bursting enables data centers to create an in
house IT infrastructure that supports
average workloads, and use cloud resources from public or private clouds, during spikes
in processing demands.

By utilizing "hybrid cloud" architecture, companies an
d individuals are able to obtain
degrees of fault tolerance combined with locally immediate usability without
dependency on internet connectivity. Hybrid cloud architecture requires both on
premises resources and off
site (remote) server
based cloud infras

Hybrid clouds lack the flexibility, security and certainty of in
house applications.
Hybrid cloud provides the flexibility of in house applications with the fault tolerance
and scalability of cloud based services.

Distributed cloud

Cloud computin
g can also be provided by a distributed set of machines that are running
at different locations, while still connected to a single network or hub service.



Privacy advocates have criticized the cloud model for giving hosting companies' great
ease to control

and thus, to monitor at will

communication between host company
and end user, and access user data (with or without permission). Cloud computing poses
privacy concerns because the service provider can access the data that is on the cloud

any time. It could accidentally or deliberately alter or even delete information

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Vendor lock

Because cloud computing is still relatively new, standards are still being developed.

Many cloud platforms and services are proprietary, meaning that they are built on the
specific standards, tools and protocols developed by a particular vendor for its particular
cloud offering. This can make migrating off a proprietary cloud

platform prohibitively
complicated and expensive


Cloud computing offers many benefits, but is vulnerable to threats. As cloud computing
uses increase, it is likely that more criminals find new ways to exploit system
vulnerabilities. Many underly
ing challenges and risks in cloud computing increase the
threat of data compromise.. Security concerns must be addressed to maintain trust in
cloud computing technology.


As with privately purchased hardware, customers can purchase the services of cl
computing for n
rious purposes. This includes password cracking and launching
attacks using the purchased services.

IT governance

The introduction of cloud computing requires an appropriate IT governance model to
ensure a secured computing environme
nt and to comply with all relevant organizational
information technology policies.


India is one of the fastest growing economies in the world. India is very fast in adopting
the computer technological developments and s
ame is true with cloud computing.
Cloud computing has a advantage for a growing economy like India. First, it allows the
entity in
using updated applications, software, hardware which will run faster, with
improved manageability and less maintenance, and
enables it to adjust with the rapidly
and ever changing IT resources and also to meet ever fluctuating and unpredictable
business needs

without incurring the CAPEX. In long run this will be beneficial to the
company’s bottom line. Second, the cloud allows

an entity to focus on its core

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competencies by allowing the cloud provider to deal with all of the hassles involved
with the development, maintenance, storage, and upgrades of business applications.
For these reasons, experts predict that the cloud com
puting market in India will grow at
a compound annual growth rate of 40 percent by 2014. The adoption rates of cloud
computing technologies in India are fast, and are based on much of the good work that
the Telecom Regulatory Authority of India (TRAI) has
completed by promoting strong
broadband policies. Cloud computing is one of the most significant and important areas
for investment in India, it is expected that cloud computing will account for 5 percent of
the total investments in India by 2015

and role
of CAs in
Cloud computing

Chartered Accountants with good

understanding of cloud computing can play a more

proactive role for their clients in

use the cloud. Also.
Chartered Accountants will be
increasingly required

to audit or consult on
IT problems
and for various other purposes
in Clod Computing
for clients
The services of CAs
can be
used for


Feasibility studies


Selection of application software, hardware and vendor


User Acceptance Testing of the resources


To explore the impleme
ntation and business process implications at
different levels in an organization’s information infrastructure.


Explain non

technical terms


Streamlining and automating the reporting the reporting process for
internal and external purposes


Recommend the be
st practices in implementation of Cloud


Determine long range plans for the organization with regard to
implementation of cloud


Use of the correct


Correctness and completeness of the


Correctness of the technical aspects of

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fety of data.


Ongoing review of process and IT General Controls around

Thus CAs have
an upper edge for using this new concept what requires a
good working
knowledge of information technology

skilled team including some technically expert

person in the fi
eld of information technology, and desire, determination, dedication and
proper direction for the success. Sky is the limit.


Cloud computing