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Cloud computing has two main advantages namely flexibility and cost reduction. The monetary costs or benefits of introducing cloud services in any company depends upon the size of the company and its existing IT resources like computer hardware, software, internal processes in the company, IT staffing and technical skill set.

Often it has been seen that big firms have had an edge over small corporations in their access to large capital and their ability to control their existing resources like human, software and hardware which supports the new marketing and strategic initiatives in the corporation. Things have changed after the introduction of cloud computing in the past year as the obstacles got reduced for new and small companies. Cloud computing also helped to balance out the strategic advantage which the large and established corporations have against the smaller or newer companies. A small and talented team of individuals can now get together with their individual talents to tackle the market needs without an immediate need for a huge investment to provide the necessary infrastructure. There are a large number of cloud providers who provide the essential software development tools, code repositories and test environments. As these small companies grow their business into midsize and large companies they face varying expenditure equations that alters the relative costs and benefits of cloud computing. For Example, when the volume of the data traffic increases, the costs of operating on a cloud provider’s infrastructure may become more expensive than the necessary IT infrastructure budget. In this case it would always be beneficial to use a policy in which some of the applications and services are brought in-house and others continue to be used in the cloud.

The cloud computing model gives major benefits to any enterprise. The major benefits include reduced costs, improved service levels, increase in IT awareness and greater business flexibility. However, the real challenge is in recognizing and calculating the opportunities that cloud computing embodies, and developing an effective practical cloud computing strategy to use a cloud model to its fullest. For introduction of cloud computing in a business it may require major changes in the entire business processes, application architectures used by the company, and IT infrastructure. Moreover, cloud computing has its potential risks also if not properly executed and implemented. Most organizations have limited experience in this field and thus are unsure of how they should proceed. There are three cloud service models and those are SaaS (Software as a Service) for web access, PaaS (Platform as a Service) for software development and IaaS (Infrastructure as a Service) for system administration. You can have your own cloud inside the organization, or the public cloud of any external provider or a hybrid cloud which includes both own or external. Lastly, Cloud computing is being used by many government agencies and organizations for their businesses needs. Cloud computing helps them to give importance to matters which are significant and critical to business rather the technical side of things.

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