about the challenges of cloud computing, programming homework help

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hello i have question related to cloud computing
and i already have the answer but need some paraphrase

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In the book titled "Cloud Computing Explained," John Rhoton states that "Cloud computing can offload some risks from the customer to the service provider. By contractually stipulating data protection and disaster recovery provisions, and attaching them to indemnities in the case of failures, the company can mitigate its own risks." "It also reduces the likelihood of under-provisioning." He stresses the importance of the risk of under-provisioning and lists off several direct and indirect costs to a company from "scalability disasters." Please provide for me two of the direct and/or indirect costs that he mentions. And here is the text I got it from this page Also it the same of my book page 95 chapter 6 benefits and challenges RISK Cloud computing can offload some risks from the customer to the service provider. By contractually stipulating data protection and disaster recovery provisions, and attaching them to indemnities in the case of failures, the company can mitigate its own risks. It also reduces the likelihood of under-provisioning. Since it is not possible to accurately predict customer demand, there is always the possibility that there will be sudden unanticipated spikes of resource utilization. If the company owns its own resources, then there are limits to the amount of idle capacity that they will procure on the off-chance of a sudden increase in activity. On the other hand, the elastic capacity of a cloud provider should not often be exceeded. It would be hard to over-emphasize this point. Scalability disasters can cause both direct and indirect costs. Lost revenues through unplanned downtime cost enterprises an average of over a hundred thousand dollars an hour and can exceed a million dollars an hour4 (Forrester 2004). In addition, there are numerous other consequences. The company may lose potential customers who are irked by the unpleasant experience of losing a transaction. Employees cannot work which increases their hourly costs. There may be compensatory payments. The brand damage can hurt relations with customers, suppliers, financial markets, banks, business partners and investors. There may even be an impact on financial performance through interruptions in billing or investment activities. Revenue and cash flow recognition may be delayed and distort the financial picture and there are risks of lost discounts from accounts payable, which can also damage the credit rating. If that isn’t enough, then consider the contractual payment obligations to temporary employees, schedules for equipment renewal, overtime costs, shipping costs and travel expenses, which can all be adversely impacted. Rogue clouds represent another potential risk that an authorized cloud service can mitigate. Historically, when a technology is not deployed in an organization the likelihood of an unauthorized deployment increases. A stark example was that of WLANs (Wireless Local Area Networks). Companies that prohibited wireless technologies often found that employees were adding personal access points to the corporate network creating a huge attack surface. By implementing authorized WLANs, many organizations removed the incentive for unauthorized WLANs and were thereby able to control the risks more effectively. Similarly, there is an incentive for many users or departments to leverage cloud-based services for personal and group use. It is extremely easy for them to access these on their own since many of the providers offer free functionality or credit-card-based payment. Their rogue use may jeopardize sensitive company information or expose the business to severe sanctions for non-compliance with industry regulations. It is impossible to completely remove the threat of departmental cloud use. However, if the functionality is available on an authorized and supported basis, then the incentive for unauthorized and unmonitored usage declines. ...
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Final Answer

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When using cloud computing, a company avoids incurring some risk which instead are
incurred by its services provider. This is ensured through signing a contract that demands the
service provider to protect their data and in a case of data loss, recover the data. This way the
company's risk are reduced.
Customer needs changes indefinitely. Therefore, a company should have enough space
for even the unexpected changes in the utilization of company's resources. With using its own
resources to provide the storage space, there is always a limitation of this space that they can
utilize with the sudden increase in demands. Therefore the need for cloud computing due to its
elastic nature. It is worth noting that elastic capacity of cloud computing should not be exceeded
as this causes scalability disasters which in turn causes the direct and indirect cost to the
One of the indirect and direct costs incurred by a company as a result of scalability
disaster is the loss of income through time wasted while out of action. The income cost lost
averages over a hundred thousand dollars an hour and can exceed a million dollars an hour
(Forrester 2004). Since during failure of the system worker does not work, this increases the cost
of working which has to be compensated thus increasing total company's expenses. The


company is also at risk of loosing customers who fear the unpleasant transaction experience. The
income loss also affects relation with customers, investors, financial markets, banks, and

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