Cloud Computing, Its Opportunities and Limitations

Introduction

Cloud computing is a revolutionary technology that facilitates the sharing of data between computers and other devices over the internet; it facilitates access to shared computing services such as storage servers, applications, and networks with minimal management. Proponents of cloud computing argue that it allows companies to channel their resources toward improving business operations and not to infrastructure development. Cloud computing provides innumerable opportunities that CPA firms can utilize to create competitive advantage and improve interactions with clients (Drew, 2012a).

However, transitioning to a business model that incorporates the technology exposes firms to several security and privacy risks (Drew, 2012a). The main benefits of cloud computing include self-service provisioning, elasticity, reliability, manageability, strategic edge, and pay-per-use services. Disadvantages include downtime, security issues, vendor lock-in, and limited control.

Conveniences and Opportunities (Pros)

The major opportunities of cloud computing include flexibility, disaster recovery, automatic software updates, capital-expenditure free, increased collaboration, document control, elasticity, and manageability (Avram, 2014).

Flexibility

Cloud computing is ideal for business with variable demands because of the opportunity to scale cloud capacity that it offers (Avram, 2014). Scaling up can be done by utilizing the cloud’s remote servers. On the other hand, it is easy to scale down in case of business demands decrease. The flexibility to scale up or down can give Mr. Say’s CPA firm a competitive advantage over competitors that do not use cloud computing. Operational agility is one of the reasons why Say should transition to technology (Grossman, 2009).

Disaster Recovery and Automatic Updates

Investment in disaster recovery is important for both big and small companies. Cloud services provide opportunities for disaster recovery through the provision of backup services. The main benefit of recovery services is cost reduction through avoidance of large investments and time wastage (Avram, 2014). Cloud service providers develop and supply regular software updates to make their platforms more effective, secure, and reliable. In that regard, users can focus on important matters such as growing their enterprises and improving the effectiveness of business processes (Grossman, 2009).

Capital-Expenditure Free

The hardware used in cloud computing belongs to service providers. Therefore, users do not incur the costs of investing in hardware (Grossman, 2009). Users pay only for the services they use and access the cloud on a subscription-based basis. In addition, it is very easy to transition to cloud computing because the infrastructure needed to support the technology is provided by the service provider. The costs of implementation are minimal.

Increased Collaboration

Cloud computing increases collaboration because a company’s team can access and share information from anywhere at any time (Drew, 2012b). CPAs of My & Say Accounting firm can access and share documents from any location across the five states in which the company’s offices are located. Cloud services provide workflow and file-sharing applications that streamline collaboration between users (Avram, 2014). Updates are made in real-time and users can view their collaborations with each other in different locations and time zones.

Elasticity and Reliability

Cloud services are elastic and reliable. As a result, they allow users to work from anywhere because they do not have geographic limitations (Grossman, 2009). Moreover, most cloud service providers provide applications for mobile devices. Therefore, the services can be accessed from a wide range of devices (Oliveria & Martins, 2011). Transitioning to cloud computing will allow Say to offer more flexible working schedules to his employees and facilitate the creation of an ideal work-life balance. Productivity will not be compromised because of the real-time reporting capabilities offered by the technology (Grossman, 2009). Offering telecommuting opportunities to employees is an effective strategy to attract and retain talented individuals.

Cons of Cloud Computing

The disadvantages of cloud computing include downtime, security concerns, limited control, and dependency on cloud computing platforms (Avram, 2014).

Downtime

Cloud computing is prone to service outages that can have negative effects on business operations (Oliveria & Martins, 2011). Since cloud services are provided over the internet, access is based on the reliability of the internet connection a business uses. On the other hand, there is the possibility of hardware and platform failure. Prolonged periods of cloud outages and slowdowns can have severe financial ramifications. In 2014, DropBox (service provider) experienced an outage that lasted two days. Businesses need to decide which processes cannot be delayed and avoid including them in the cloud.

Security and Privacy

Security and privacy of the information on cloud platforms is a major concern that businesses deal with. A security breach on Amazon’s cloud led to the demise of a company called Code Spaces. The risks of security and privacy breach are very high. Security concerns of cloud computing are twofold. First, the service provider is responsible for safeguarding the hardware infrastructure of cloud platforms (Oliveria & Martins, 2011).

Second, users (businesses) are responsible for safeguarding remote access to cloud platforms. Security and privacy breaches can occur from any end (Du & Cong, 2010). The accessibility of a cloud’s components from the internet increases the risk of attacks. It is necessary for businesses to hire highly qualified system administrators to secure their networks and systems in order to avoid security breaches in case they choose to use private clouds.

Limited Control

Cloud services and applications run on third party virtual environments that users have limited access to (Oliveria & Martins, 2011). Cloud users have limited control over several components of cloud platforms such as the function and execution of software programs and hardware (Du & Cong, 2010). When businesses join the cloud, they lose physical control over their data and applications. Limited control gives rise to a range of issues including data privacy, data control, legal and regulatory compliance, and new risks and vulnerabilities (Oliveria & Martins, 2011). Users have limited control over data and implementation of security protocols within public infrastructure platforms. Service providers offer control based on the needs of users.

Dependency and Vendor Lock-In

Cloud users depend implicitly on their service providers because of the difficulty experienced in trying to shift from one service provider to another (Grossman, 2009). In certain cases, a user cannot migrate to another service provider because of the complexity of the process. On the other hand, it can be very risky to transfer large amounts of data from one cloud platform to another (Du & Cong, 2010). In that regard, it is very important for Mr. to Say to carefully and thoroughly evaluate potential cloud service providers to determine which one has the best offer.

Security Concerns Mr. Say Must Examine

Cloud service providers enhance the security of data by implementing the best security standards and industry certifications. They also put in place stringent security measures to make data storage and transfer safe (Grossman, 2009). Storing data and sensitive files on external service providers increase the risk of breach and unauthorized access (Du & Cong, 2010). Therefore, Mr. Say must examine the security concerns associated with cloud computing before settling on using it. One of the challenges of using cloud services is access to sensitive company data that service providers get.

Cloud computing is a public service that serves businesses in different economic sectors. Therefore, it presents security challenges to providers every day. The procurement and access to cloud services are very easy and gives users with wicked intentions an opportunity to identify and exploit the system’s security loopholes and vulnerabilities (Du & Cong, 2010). For example, servers that host different users have higher risks of a security breach because hackers can easily access and steal other users’ data. Every component of a cloud service is accessible from the internet and as a result, the risk of a breach is very high (Grossman, 2009).

The cloud is very secure because service providers implement security standards that prevent intrusion and unauthorized access. However, any information that is stored on the internet is at high risk of a cyber attack. The risk is higher with cloud systems because sensitive data belonging to different companies is stored in the same system and could attract hackers (Grossman, 2009). Say should make sure that he thoroughly vets cloud service companies to ensure that their security protocols and practices are the best.

On the other hand, he should implement stringent security measures on the company’s system to ensure that data breach does not come from his end. Another security concern is government intrusion (Grossman, 2009). Many companies deal with highly confidential data that the government would be interested in accessing.

For that reason, it is imperative for the firm to hire a service provider with robust data encryption protocols. This should be done before entering into any agreement because after join, shifting to another cloud service is very difficult. If Mr. Say chooses to store data privately, then he should hire highly qualified IT specialists to take care of security matters.

The Future of Cloud Computing in My & Say Accounting CPA Firm

The firm has a bright future with cloud computing because of the many conveniences and opportunities the technology offers. The disadvantages are insignificant in comparison to the benefits. My & Say Accounting CPA firm has accountants spread across five states. Cloud computing will play a great role in streamlining workflow, improving data storage, and enhancing information sharing among them (Drew, 2012b).

Moving accounting applications to the cloud will allow the firm to expand its capabilities. As mentioned earlier, transitioning business operations to the cloud will eradicate the geographical barriers that exist between the company employees as well as between employees and clients (Drew, 2012a). The cloud will help the firm to improve relationships with clients and enhance customer service (Drew, 2012a). Sharing its accounting applications will be beneficial both to the firm and clients. Cloud computing will make work easier and as a result, allow the CPAs to do more chargeable work and increase the company’s revenues.

Conclusion

Cloud computing is a technology that facilitates the sharing of data between devices over the internet. It has advantages as well as disadvantages. The foregoing discussion has addressed the pros and cons of cloud computing. It can be concluded that Mr. Say should move his accounting applications to the cloud because the transition will benefit both the company and the clients. However, before transitioning, he should address several security concerns that are associated with cloud computing. Security breaches, privacy issues, and government intrusion are some of the concerns that need to be addressed. Transitioning to the cloud will streamline the company’s workflow, eradiate barriers associated with location and allocation of resources, enhance flexibility, and improve the reliability of the firm’s accounting services.

References

Avram, M. (2014). Advantages and challenges of adopting cloud computing form an enterprise perspective. Procedia Technology, 12, 529-534.

Drew, J. (2012a). Heads in the cloud: part 1, CPAs discuss advantages, changes of new computing paradigm. Web.

Drew, J. (2012b). Heads in the cloud: part 2, CPAs discuss advantages, challenges. Web.

Du, H., & Cong, Y. (2010). Cloud computing, accounting, auditing, and beyond. CPA Journal, 80(10), 66-70.

Grossman, R. L. (2009). The case for cloud computing. IT Professional, 11(2), 23-27.

Oliveria, T., & Martins, M. F. (2011). Literature review of information technology adoption models at firm level. Electronic journal of Information Systems Evaluation, 14(1), 54-87.