Definition of Cloud Computing
Definition of Cloud Computing
“What is your definition of cloud computing and how does it impact your business?” Cloud computing has been around for a while. It has been lurking in the ICT industry in smaller forms and companies have generally been using the service internally without realizing it. Only a few years ago, the sudden realization that cloud computing can save an organization massive operational costs came to the fore. Organizations were getting bigger and the cost of doing business was becoming expensive. Organizations that were expanding globally, i.e. beyond their country’s borders were discovering that the infrastructure costs per country varied and in some instances were none-existent as the country did not have the buying power to procure the latest infrastructure. This meant that organizations that had SOE (standard operating environments) and were mandated by policy to conform to specific standards began to find it more difficult to maintain their standards.
This in turn meant that compromises would need to be made to security policies and the method in which data was delivered to international clients had to be changed to enable this to happen. So, it was only natural that when cloud computing service providers began an aggressive push for their services, the world breathed a sigh of relief. Here at last was a service that could be delivered virtually anywhere in the world and even more beneficial was the fact that the service could be delivered down to handheld devices such as smartphones and the iPad. In addition to this, cloud computing enabled an organization to maintain its policies seamlessly across multiple sites which may be located in different countries. The entire platform could be used to virtually centralize the data and the policies associated with it. So, exactly what is cloud computing? To the layman, the simplest definition is the storage of data in a virtual cloud with the Internet being used as the backbone to access and work on data.
For a user who is always on the move, cloud computing makes it easier to access and work on data regardless of the location and it also allows the user to be in touch with his office because cloud computing is not restricted merely to information sharing but also allows for the bridging of the user and his colleagues by way of video conferencing, virtual boardrooms and other features that enable a user to remain connected. From a more technical perspective, the data is stored in data farms that can be made up of SANS, virtualization, security layers and connectivity mediums that allows for the quick access to data. The benefits of cloud computing are no doubt massive but what does this mean for the financial industry? What does this mean for an industry that is built up on a rigid set of information security policies, all with the one objective of protecting customer information and transaction records?
For someone such as me, the financial industry is almost akin to the Russian iron curtain. Customer data is jealously guarded and information relating to the financial systems is kept securely under lock and key. Every single user is tasked to ensure that any information coming out of the system is used exactly and only for the purpose it is deemed and destroyed once it has been used. In addition to this, the ICT industry in the finance industry has a massive task on its hands. It is responsible for ensuring that intrusion attempts are detected and arrested on the spot and any data traversing out of the network is secured to the point of destination. Naturally, the ramifications of any breach can be potentially fatal. Breaches of customer data can usually result in: * Customer legal action, i.e. being sued
* Non-compliance of central bank regulations can lead to fines
* Loss of reputation
* Loss of revenue
These factors can usually be devastating for any bank. After all, customers expect their personal information to be kept secure when dealing with a bank given that no one likes their financial information splattered across the public boards for the world to see. If an example is sought here, one need only look at the Swiss banks. “…When people worry about their money, they rush it to Switzerland, even when domestic laws forbid it. Switzerland never seems to have any trouble which would adversely affect the value of its currency or the safety of the money entrusted to its bankers (Vicker 3, 4).” This was the general norm until recently in 2009 when the US demanded that the Swiss Bank UBS turn over details of US clients who were suspected of tax evasion, “…fight between U.S. authorities and the Swiss banking giant, UBS, the veil is about to be pierced. UBS agreed on Wednesday to turn over identifying information on 4,450 accounts which the IRS believes hold undeclared assets belonging to Americans. Those accounts were believed to hold about $18 billion…
Accounting Web (08/20/2009 – 08:26).” Ultimately, this defined a new era for Swiss banking because another country had successfully infiltrated the closely guarded secrets of the Swiss banks and managed to demand data be handed over through legal channels. So what does this mean for organizations in the financial sector where security is paramount? Naturally, no financial institution wants to lose control of its data or being in a position where it cannot control the flow of data accurately. It is therefore critical that the decision to move to a cloud based environment be studied carefully while gauging the risks involved and the potential loss of customer information if the system were ever to fail. Therefore, it is my belief that organizations in this sector are highly unlikely to move over entirely to the cloud based system.
Federal and central regulations would play a crucial role in the decision as well as the security aspects. For any financial organizations contemplating this move, it would certainly not be done by way of hiring a vendor providing the service and instead the organization would build its own private cloud where it would enforce all the necessary regulations and policies that would ensure the security of the data. It is also prudent to remember that the core applications of financial organizations are generally built around legacy based languages such as COBOL and these cannot be easily migrated to a web based system given that there are transactional processing issues such as response times, etc. that need to be factored. For financial institutions, the change would be far too massive and require an almost complete overhaul of the existing investments in the infrastructure and a change in the central policies. In addition to this, there is always the greater risk of data losses as Google experienced recently which left a few thousand customers without access to their mailboxes and ultimately losing their data.
In a cloud based environment, the risks of such occurrences particularly where customer data is concerned are far too great to be reckoned with – even if the ratio is small, that risk cannot be taken. Organizations in the financial sector are dictated on industry expected practices such as data retention periods, backup methodology, archiving, backup security and a whole host of other protocols that need to be followed when dealing with customer data. In an environment such a cloud based one, these methodologies cannot all be applied given that the environment is changed from a more rigid and manageable structure to a more fluid structure.
In conclusion, the concept of cloud computing is indeed a fascinating one and offers massive savings for any organization that ventures into it however for industries where customer information security is the key to survival, the prospect of going to a cloud based system unless it were a privately built and controlled one would not induce any encouragement in the financial sector. Nonetheless, it is hoped that in the future, central regulations will be changed to encourage the migration to cloud and with the appropriate security policies and perhaps an improved security structure, this vision may one day be fully embraced by the financial industries around the world. * Vicker, Ray. Those Swiss Money Men. New York: Scribner, 1973. * Accounting Web. Swiss Bank UBS agrees to reveal U.S. secret accountholders, http://bit.ly/iO4bX6, August 20, 2009, 08:26
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 7 January 2017
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