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Is Cloud The Inevitable Best Practice When It Comes To The Data Center?

A cloud is a virtual infrastructure that is accessed or delivered with a local network or accessing the remote location through the internet

Cloud computing has emerged as a technology to allow users to access infrastructure, storage, software, and deployment environment based on a pay-for-what-they-use model.

Traditional data center requires various components on premises such as servers, communication media and data storage facilities, power supply, backup systems, a redundant communication connection, HVAC systems, security devices etc.  All these resources are needed to be locally present at access site and entire infrastructure is typically run and maintained in-house.

On the other hand, a cloud is a virtual infrastructure that is accessed or delivered with a local network or accessing the remote location through the internet. Within this environment, the user can access computing resources, networking services, and storage and the users can also access these services on-demand without any requirement of physical infrastructure. It is an Off-premises form of computing which can be accessed from the internet. Cloud’s maintenance and updates is maintained and controlled entirely by the third-party.

Comparison between Traditional Data Center and Cloud Data Center

Traditional Data Center
Cloud Data Center
Co-located / Dependent Failure
Fault Tolerant
Performance Interrelated
Performance Interrelated
Centralized Full Control
Plan Ahead
Per Physical Machines
Per Logical Usage
Fixes on Designated servers
Runs and Moves on across all Virtual Machines

To understand the concept of cloud versus a data center, consider an example of electricity distribution. There is a grid that carries electricity produced by power plants - assume that it’s the data center. Cloud is nothing but the electricity we use at home. We don’t own the power plant, nor the grid and we don't also maintain the other associated infrastructure. We just pay for the number of units we consume at home or in our office and the service provider ensures that we get power for 99.99x% of the time.

Today, the start-up companies could have their product up and running in the cloud in a matter of days, if not hours, with zero up-front investment in servers and similar gear. Considering the cost effectiveness that the concept offers. There is no need to build their own data centers and invest a huge money on infrastructure and servers.

Banking companies are also hosting non-critical applications like tour and travel portal, learning & training portal on cloud platform. Microsoft Outlook mail messaging systems which is hosted on cloud platform are being extensively used by financial and non-financial companies. Giant corporations like Amazon, Google, and Microsoft offer a variety of service models, depending on exactly how the customer interacts with its cloud-computing environment. There are various levels of cloud model are available for companies to choose are per their requirements such as

IaaS (Infrastructure as a Service): which outfits each customer with one or more virtual machines running on the cloud provider’s physical equipment. In addition to leasing such virtual machines, an IaaS provider may include a choice of operating systems to run on them. Notable examples of such IaaS clouds include Google’s Compute Engine and Amazon’s Elastic Compute Cloud.

PaaS (Platform as a Service): These include an environment for developing the online applications that are to run on the provider’s equipment. Customers don’t have to manage virtual machines. They just create their applications using various software libraries, application-programming interfaces, and other software tools such as databases and middleware, and then one or more virtual computers are spun up automatically as needed to run all of this. Examples of PaaS clouds are Amazon’s Elastic Beanstalk, Google’s AppEngine, Microsoft’s Azure, and SalesForce’s

SaaS (Software as a Service): In this model, company/customer simply use some Web-based application or suite of applications to handle the task at hand. This is probably the model of cloud computing that most people are familiar with. It includes services like Apple iWork, Gmail, Google Docs, and Microsoft Office 365.

DRaaS (Disaster Recovery as a Service): Cloud service providers are offering DRaaS to companies so that cloud services can be used as a DR site if any disaster happens on primary site (own data center) of the company.

Few years ago, manpower outsourcing have become vital service model for all the companies (financial/non-financial) because outsource manpower provider would maintain the number of staff deployed at your premises and maintain the continuity of service level agreement (SLA). The main advantages of availing outsource (manpower) service model for the companies are the skilled manpower for specialized jobs and large number of data entries with low cost. In the same way, cloud computing is going to shift the strategy for new companies as well as existing companies to set up their own IT infrastructure (data center) to migration on cloud services which will help customers to divert a large portion of money on business expansion instead of setting up in-house IT infrastructure. Very soon, hosting of IT infrastructure on cloud model will become inevitable for financial/non-financial companies because of cost-effectiveness, scalability, pay & use model.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
cloud computing data centre

Rupesh Kumar Srivastava

19+ years of experience of Internal Audits ( IS Audit and Process Audit), Banking operations, IT implementation, Banking Products Evaluation, Information Security Risk Assessment in large Public Sector Bank and Top Private Sector Bank. Expertise in Risk Based Audits, Information Systems Audit, and Policy review related to Banking Operations & Information Security and Control Gap Analysis.

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