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Chapter 3 • Enterprise Systems Architecture 79

Cloud computing has been defined or interpreted in many different ways. Some define
cloud computing as “on-demand access to virtualized IT resources that are housed outside of
your own data center, shared by others, simple to use, paid for via subscriptions, and accessed
8
over the Web.” Others have a much wider and fuzzier definition: “virtual servers available over
the internet”. The following is the most comprehensive definition of cloud computing: “What
makes cloud computing so powerful is that it is based on a system of modularity. The use of
virtualization and a cloud platform allows organizations to break down services and systems into
smaller components, which can function separately or across a widely distributed network.
Servers can be located almost anywhere and interfaces can be changed and customized on the fly.
These services and software are only as far away as an Internet or mobile phone connection.” 9
Based on the definitions above, cloud computing is basically a software service provided
over the Internet, securely, by a service provider on a monthly or yearly lease. CC is similar to
your ISP, which for a monthly fee provides you access to the Internet. The CC service provider
provides for a monthly fee storage space for your data and access to an increasing number of
software applications. Companies leasing CC services save money by replacing their purchased
software that requires a license fee per seat. For example, if a company finds that it is spending
too much money on Microsoft Office suite (software, licenses, and upgrades), they can replace it
with an online version of the suite or similar suite for a fixed monthly fee without worrying about
installation, maintenance, or security. Microsoft, Google, and Zoho are three vendors who offer
Office applications suites, each with its own benefits and liabilities (Foyle, 2010).
Some cloud computing providers also let you build your own applications using their
engines and then they would host those applications for you as part of the service. For example,
Google offers the Google App Engine, which enables users to build Web apps for their compa-
nies. The Google App Engine offers fast development and deployment and simple administration.
Google promises to deliver a 99.9 percent uptime SLA, which eliminates concerns regarding
servers performing up to standard. The cost to create your own application using the Google App
Engine is $8 per user, per month (with a maximum $1,000 a month), which means that you pay for
what you use. Paying depending on the amount of usage can save companies money, because in
the traditional model, companies would have to pay a fixed price for a system whether 5 people
used it or a 100 people used it (Google App Engine). Google is updating this engine with a new
service that will be offered later this year with a hosted SQL database service and a Secure Socket
Layer (SSL) service on their client’s platform for secure communications. But Google is not the
only company out there that allows you to do these things; there are other companies like Amazon
who also offer the flexibility of programming your own application and host it on their servers
with the subscription. In addition, Amazon offers services to creating iPhone and Facebook
applications (AWS Solutions). It seems that there is no limit on the software services that are
being offered on the cloud computing platform, and ERP systems are heading in their direction.
There are several enterprise applications, like e-mail, customer relationship management
(CRM) software, sales automation software, accounting, procurement systems, online meeting
spaces, Web site and domain hosting, and others that are being offered on the CC platform.
VMware, a CC vendor, offers a solution that utilizes a virtualized version of SAP system for

8 Brynjolfsson, Erik, Hofmann, Paul, and Jordan, John. (May 2010). Cloud Computing and Electricity: Beyond the
Utility Model. Communication of the ACM, 53 (5), 32–34. DOI=10.1145/1735223.1735234. http://doi.acm.org/10.1145/
1735223.1735234.
9 Greengard, Samuel. (May 2010). Cloud Computing and Developing Nations. Communications of the ACM, 53 (5),
18–20. DOI 10.1145/1735223.1735232.