CLOUD COMPUTING

1 . Overview of Cloud Computing

Cloud Computing is a computerized system based on network / Internet. The resource, software, and application information is provided for used by other computers. Why that concept called Cloud Computing? Because the Internet can be considered as a large cloud (usually in the network scheme, emblem of the internet is cloud) that contains a large collection of connected computers, so the Cloud Computing can be defined as a computerized -based collection of connected computers.

Cloud computing can be considered as an extension of virtualization . The Companie or private person can put an application or system on the internet , not manage it with internally. Examples of cloud computing is a public version: Google Docs, Google Spreadsheets , Etc.

2. Benefits of Cloud Computing

1.      Achieve economies of scale – increase volume output or productivity with fewer people. Your cost per unit, project or product plummets.

2.      Reduce spending on technology infrastructure. Maintain easy access to your information with minimal upfront spending. Pay as you go (weekly, quarterly or yearly), based on demand.

3.      Globalize your workforce on the cheap. People worldwide can access the cloud, provided they have an Internet connection.

4.      Streamline processes. Get more work done in less time with less people.

5.      Reduce capital costs. There’s no need to spend big money on hardware, software or licensing fees.

6.      Improve accessibility. You have access anytime, anywhere, making your life so much easier!

7.      Monitor projects more effectively. Stay within budget and ahead of completion cycle times.

8.      Less personnel training is needed. It takes fewer people to do more work on a cloud, with a minimal learning curve on hardware and software issues.

9.      Minimize licensing new software. Stretch and grow without the need to buy expensive software licenses or programs.

10.  Improve flexibility. You can change direction without serious “people” or “financial” issues at stake.

3. Cloud Computing Based Services Principles

Cloud Based Services is the general term given to a variety of services that are accessed via the Internet or a proprietary network.   Broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS), Cloud Based Services allow users to store data, access software and access services and platforms from almost any device that can access the cloud via a broadband connection. The use of cloud services has greatly increased over the past decade.  As a result, states have taken a wide range of positions regarding the way they characterize Cloud Based Services for purposes of applying sales and use tax, some of which are difficult for businesses to understand and comply with. In addition, the inconsistency between the states creates further complexity and confusion.

The National Conference of State Legislatures’ Executive Committee Task Force on State and Local Taxation has undertaken a process to study and better understand Cloud Based Services.  Based on this effort, the Task Force recommends the following principles for states to consider if developing legislation governing the taxation of Cloud Based Services:
 
1. To ensure that taxation is equitable, states contemplating taxes on Cloud Based Services should:

·         Establish consistent sourcing regimes that recognize the special challenges that cloud computing presents so as to avoid the multiple taxation of individuals or businesses in multiple states; and

·         not impose discriminatory taxes on Cloud Based Services.

2. States considering taxes on Cloud Based Services should base their decisions on the nature of the service and not on the nature or type of provider.

3. To ensure that taxation is clear, efficient, and fair, states choosing to impose a tax on Cloud Based Services should:      

·         Avoid imposing any tax on Cloud Based Services through administrative action and only consider imposing the tax through statutory imposition;

·         Carefully draft definitions to provide clarity to buyers and sellers of Cloud Based Services;

·         Recognize the broad range of services included in Cloud Based Services and address those differences within the statutory scheme;

·         Design any tax impositions only on specific and clearly delineated services or  where state statutes provide for broad taxation of services, exclusions or exemptions, if any, for certain Cloud Based Services should be clearly delineated.

·         Encourage the involvement of providers of Cloud Based Services in any drafting efforts involving the taxation or sourcing of those services; and

·         Provide clear and consistent rules to govern bundled transactions involving Cloud Based Services.

4. Characteristics of Cloud Computing

Cloud computing requires searching for a cloud provider. Whether your cloud is public, private, or hybrid, look for elasticity, scalability, provisioning, standardization, and billed usage:

·         Elasticity and scalability. The cloud is elastic, meaning that resource allocation can get bigger or smaller depending on demand. Elasticity enables scalability, which means that the cloud can scale upward for peak demand and downward for lighter demand. Scalability also means that an application can scale when adding users and when application requirements change.

·         Self-service provisioning. Cloud customers can provision cloud services without going through a lengthy process. You request an amount of computing, storage, software, process, or more from the service provider. After you use these resources, they can be automaticallydeprovisioned.

·         Standardized interfaces. Cloud services should have standardized APIs, which provide instructions on how two application or data sources can communicate with each other. A standardized interface lets the customer more easily link cloud services together.

·         Billing and service usage metering. You can be billed for resources as you use them. This pay-as-you-go model means usage is metered and you pay only for what you consume.

5. Risks of Cloud Computing

Before considering cloud computing technology, it is important to understand the risks involved when moving your business into the cloud. You should carry out a risk assessment process before any control is handed over to a service provider.

You should consider the following issues:

1.      Privacy agreement and service level agreement

You will need to have suitable agreements in place with your service providers before services commence. This will safeguard you against certain risks and also outline the responsibilities of each party in the form of a service level agreement (SLA). You should read the SLA and ensure that you understand what you are agreeing to before you sign. Make sure that you understand the responsibilities of the service provider, as well as your own obligations.

2.      Security and data protection

You must consider how your data will be stored and secured when outsourcing to a third party. This should be outlined in the agreement with your service provider, and must address mitigations to governance and security risks. It must cover who has access to the data and the security measures in place to protect your data.

3.      Location of data

Cloud computing service providers are often located outside Australia. Before committing, you should investigate where your data is being stored and which privacy and security laws will apply to the data.

4.      Legislation and regulation

You will need to be aware of Australian legislative and regulatory requirements when storing personal data (e.g. the Privacy Act 1988 and the Archives Act 1983 will apply). If the data is being stored outside of Australia (e.g. if your business uses an overseas service provider), you will also need to be aware of the legislation and regulation requirements in that geographic location.

6. The Concept of Cloud Computing

Cloud Computing is a technology that uses the internet and central remote servers to manage data and applications . Cloud Computing helps consumers and businesses to use an applications without installation, and can accessing their personal files at any computer with internet access. This technology give more efficient by centralizing storage, memory, processing and bandwidth.

On the concept of Cloud computing there is a term back-end and front-end. Both are connected by a network. While the back end is what is referred to as a cloud, the resource of the cloud taken by the front-end. Where it provides what is needed by the Front-end.

3 segments of the Cloud Computing: applications, platforms, and infrastructure . Each segment gives purpose and offers different products for businesses and individuals around the world . In June 2009 , the study conducted by VersionOne found that 41 % of senior professionals in the IT field do not know what cloud computing is and two- thirds from finance professionals are confused by the concept.

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