View
218
Download
0
Category
Preview:
Citation preview
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
1/123
Incorporating Cloud Computing Services withinMaltese Registered Business Organisations
Pulis Maria
A dissertation submitted in partial fulfilment of the requirements of
Masters in Business Administration (E-Business) at the Faculty of
Economics, Management and Accountancy University of Malta.
September 2012
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
2/123
ii
Abstract
Cloud Computing is an emerging business model which could prove as beneficial toorganisations, especially Small to Medium Enterprises (SMEs). This research analyses
how Maltese registered organisations are incorporating Cloud Computing services within
their ICT infrastructure. A thorough look at the available literature is given to identify
different Cloud deployment models (Private, Public and Hybrid Cloud), service models
(SaaS, PaaS and IaaS), common advantages, disadvantages and issues. The findings from
a number of face-to-face interviews were discussed and the perceived benefits and issues
were pointed out. The top benefits outlined were: capital expense savings, the ability to
scale and the fact that the service provider takes care of all the maintenance required. The
most perceived issues related to Cloud Computing are security and vendor lock-ins.
Concerns particularly related to the interviewed companies are data location due to the
nature of the organisations and compliance with regulations. These findings were then
compared and contrasted to a similar study carried out at the European level. In addition,
reference is made to the different Cloud Services available to Maltese business
organisations to date. To be able to get a more complete picture of the local situation,
interviews were also carried out with Maltese Regulators including MFSA and LGA.
Finally, a number of recommendations were given and attention was drawn to a number of
challenging issues. It can be concluded that Cloud Computing is not suitable for every
organisation: choosing a reliable service provider is crucial and having a complete and
extensive SLA could avoid future problems. There is still a low take-up rate of Cloud
services in Malta but with more awareness more Maltese organisation can benefit from
such a service.
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
3/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
4/123
iv
Table of Contents
Abstract ............................................................................................................................................................ ii
Acknowledgements ....................................................................................... .................................................. iii
Table of Figures ............................................................................................................................................. vii
1 INTRODUCTION .......................................................... ................................................................. ....... 1
1.1 Motivation ............................................................................. .............................................................. 2
1.2 Objective ........................................................... ................................................................. .................. 2
2 CRITICAL LITERATURE REVIEW ................................................................................................. 3
2.1 Definition of Cloud Computing ........................................................ ................................................... 3
2.1.1 Overlapping Definitions .......................................................... ................................................... 5
2.2 Deployment Models ................................................................ ............................................................. 7
2.2.1 Private Cloud .......................................................................... ................................................... 7
2.2.2 Public Cloud .............................................................................................................................. 8
2.2.3 Community Cloud ......................................................... ............................................................. 8
2.2.4 Hybrid Cloud ............................................................................................................................. 9
2.3 Service Models..................................................................................................................................... 9
2.3.1 Infrastructure as a Service (IaaS) ................................................................ ............................. 10
2.3.2 Platform as a Service (PaaS) ............................................................................................... ..... 11
2.3.3 Software as a Service (SaaS) ................................................................................................... 11
2.4 Roles ...................................................... ................................................................. ........................... 13
2.4.1 Cloud Providers ....................................................................................................................... 13
2.4.2 Cloud Resellers or Aggregators .......................................................................................... ..... 13
2.4.3 Cloud Adopters ..................................................................................................... ................... 14
2.4.4 Cloud Consumers .......................................................... ........................................................... 14
2.4.5 Regulators .......................................................... ................................................................. ..... 14
2.5 Perception ............................................................................. ............................................................ 15
2.6 Benefits ............................................................. ................................................................. ................ 15
2.6.1 Capital Expenditure ................................................................................................................. 16
2.6.2 Immediate Delivery ................................................................................................................. 16
2.6.3 Lower Operating Costs ...................................................................... ...................................... 17
2.6.4 Security Benefits ........................................................... ........................................................... 17
2.6.5 Economies of Scale ................................................................. ................................................. 18
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
5/123
v
2.6.6 Easy Scale-up ................................................................ ........................................................... 19
2.6.7 Other Benefits ....................................................................................................... ................... 19
2.7 Issues ..................................................... ................................................................. ........................... 21
2.7.1 Economic Issues ............................................................ ........................................................... 21 2.7.2 Legal Issues ........................................................ ................................................................. ..... 23
2.7.3 Security Issues ......................................................................................................................... 25
2.8 Cloud Computing for SMEs .............................................................. ................................................. 26
2.9 Cloud Service Provider ..................................................................................................................... 28
3 RESEARCH METHODOLOGY ....................................................... ................................................. 31
3.1 Justification of the Methodological Rationale ........................................................ ........................... 31
3.2 Research Methods ............................................................................ ................................................. 32
3.2.1 Data Collection Methods ......................................................................................................... 32
3.2.2 Criteria for Sample Selection ............................................................. ...................................... 33
3.3 Semi-Structured Interviews Design ................................................................................................... 34
3.3.1 Users Interview ............................................................ ........................................................... 34
3.3.2 Service Providers Interview .............................................................. ...................................... 37
3.3.3 Regulators .......................................................... ................................................................. ..... 37
3.4 Data Analysis Technique ........................................................ ........................................................... 38
3.5 Limitations ........................................................ ................................................................. ................ 38
3.6 Conclusion ........................................................ ................................................................. ................ 39
4 PRESENTATION AND ANALYSIS OF DATA ............................................................... ................ 40
4.1 Descriptive Statistics ................................................................................................................. ........ 40
4.1.1 General Overview ................................................................................................. ................... 42
4.1.2 Current Systems ............................................................ ........................................................... 44
4.1.3 Cloud Computing Understanding ...................................................... ...................................... 45
4.1.4 Benefits, Issues and Concerns ............................................................ ...................................... 47
4.1.5 Looking for in Cloud Service Providers ............................................ ...................................... 62
4.2 Specific Comments not mentioned in the statistics ............................................................................ 66
4.3 Service Provider Point of View ......................................................................................................... 70
4.3.1 BMIT Ltd ........................................................... ................................................................. ..... 70
4.3.2 GFI .......................................................... ................................................................. ................ 77
4.4 Regulatory Point of View ........................................................ ........................................................... 82
4.4.1 Malta Financial Services Authority (MFSA) ........................................................................... 82 4.4.2 Lotteries and Gaming Authority (LGA)............................................. ...................................... 84
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
6/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
7/123
vii
Table of Figures
Figure 4.1 - Size of the Interviewed Organisations ............................................................. 40
Figure 4.2 - Nature of the Organisations ............................................................................. 41
Figure 4.3 - Current Use of Cloud Computing Services within Interviewed Companies ... 43
Figure 4.4 - Interviewees understandi ng of the term Cloud Computing ............................ 46
Figure 4.5 - Advantages of Cloud Computing ..................................................................... 48
Figure 4.6 - Disadvantages of Cloud Computing ................................................................ 53
Figure 4.7 - Concerns affecting directly Interviewees ......................................................... 58
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
8/123
1
1 INTRODUCTION
Cloud Services is a term used for a relatively new paradigm that hosts services over theInternet. It allows users to use applications without installation and access their personal
files from any computer with Internet access.
Due to global economic crises, organisations need to keep costs low while focusing on
growth rather than survival. This puts more pressure on IT departments to be more
operational efficient, gain competitive advantage and be more innovative. In certain
circumstances, Cloud Computing could be more affordable than on-premise solutions,
hence the new trend (Robson Communications Inc. 2010).
Cloud Computing is an emerging business model which could prove as beneficial to
organisations, especially Small to Medium Enterprises (SMEs). The use of ICT has found
its roots in almost all industries, each to a different degree, from manufacturing to
professional services. In Malta, this innovative computing paradigm is still gaining
momentum.
In a research carried out by Youseff et al., cited in Koehler et al. (2010), it is claimed that
many researchers agree that the elements of Cloud Computing are not a technical
innovation in themselves. Sharing computer resources in Grid computing, virtualization
and on demand services by Software-as-a-Service (SaaS) has prevailed Cloud Computing.
Weiss, cited also in Koehler et al. (2010) points out that Utility computing has existed
before. He concludes that the real revolution of clouds is the combination of those different
IT aspects into a new business model. Virtualization of data centre infrastructure helped to
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
9/123
2
increase their utilization by offering storage and computer performance to third parties. On
demand software, offers possibilities to combine different software solutions into one
environment (Koehler et al. 2010). Cloud services are broadly divided into three
categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-
as-a-Service (SaaS).
1.1 Motivation
The term Cloud is nowadays alluded in various business aspects, from Marketing to I.T.
The motivation for this study aroused from the hype in the technological world about the
buzzword Cloud. The Cloud is all over, permeating news articles and social
networking services. Accordingly, given my employment background and current studies,
I decided to focus the study towards this new promising technology from a business
perspective based on the local scenario.
1.2 Objective
The objective of this research is to analyse how Maltese registered organisations are
incorporating Cloud Computing within their ICT infrastructure. The study aims to analyse
the different perceptions of key decision makers in the industry. Also, identification of the
perceived benefits and issues should be studied and compared to similar research carried
out across European framework. In addition, consideration will be given to the different
Cloud Services currently available to Maltese business organisations. In order to get a
more complete picture of the local situation, interviews with Maltese Regulators will also
be carried out.
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
10/123
3
2 CRITICAL LITERATURE REVIEW
According to a survey by Gartner Research (2005) (cited by Marston et al. 2011) about
two-thirds of the average corporate IT staffing budget goes towards routine support and
maintenance activities. This seem anachronistic in an age of globalized and cutthroat
competition as the CEO of a cloud platform provider is quoted commenting in Marston
et al. (2011):
If you woke up this morning and read in The Wall Street Journal that, say,Overstock.com has stopped using UPS and FedEx and the U.S. mail, and had
bought fleets of trucks and started leasing airport hubs and delivering productsthemselves, you would say they were out of their minds. Why is that much moreinsane than a health care company spending $2 billion a year on informationtechnology?
2.1 Definition of Cloud Computing
Cloud computing is vast and incorporates numerous technological aspects. Consequently,
a single hard and fast definition of the term does not exist. Various authors tried to explain
and express understanding of Cloud Computing. The name Cloud Computing was inspired
by the cloud symbol which is often used to represent the Internet in flowcharts and
diagrams (SearchCloudComputing.com 2007).
Foster et al. (2008, pp. 1) defines Cloud Computing as:
A large-scale distributed computing paradigm that is driven by economies ofscale, in which a pool of abstracted, virtualised, dynamically-scalable, managedcomputing power, storage, platforms, and services are delivered on demand toexternal customers over the Internet.
From this definition, one can summarise that Cloud Computing is a specialised distributed
computing paradigm , in the sense that it is massively scalable and highly customisable to
deliver different levels of services (Foster et al. 2008; Mei et al. 2008). In addition, Cloud
Computing is successful as it enjoys a number of economies of scale.
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
11/123
4
In their paper, Jaeger et al. (2009) refer to Cloud Computing as a model of computing
where machines in large data centres can be dynamically provisioned, configured, and
reconfigured to deliver services in a scalable manner. This would give firms flexibility in
their use of technology especially in services; from scientific research to video sharing to
email. This is beneficial for periods when a firm would require more processing power
than other periods. Cloud Computing is fast accelerating in its widespread of services.
Jaeger et al. (2009) , in citing Horrigans report based on the survey carried out by The Pew
Internet & American Life Project 1 survey (Use of Cloud Computing Applications and
Services); stated that, although many users may not be familiar with the term, the reality is
that most users (69%, according to the Pew study) are already taking advantage of Cloud
Computing through Web based software applications and online data storage services
(Jaeger et al. 2009).
Another definition by Etro (2009), looks at Cloud Computing from the perspective of both
the firm and the consumer. It refers to an Internet-based technology through which
information is stored on servers and is provided as a service and on-demand to clients. On
one side, consumers will be able to access all of their documents and data from any
Internet connectable device, as they already do for email services and document
management (such as Google Apps2
, Ubuntu One3
, Dropbox4
etc). On the other side, firmswill be able to rent computing power (both hardware and software) and storage from a
service provider and pay on demand, similarly as water and electricity consumption, hence
it is commonly known as Utility computing (Etro 2009).
1 http://www.pewinternet.org/ 2 http://www.google.com/apps/intl/en/group/index.html3 https://one.ubuntu.com/
4 https://www.dropbox.com/
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
12/123
5
A more recent definition, expressed by Bhm et al. (2011), incorporates both the
application and the infrastructure perspective, rather than a technical definition. Bhm et
al. (2011) consider Cloud Computing as an IT deployment model, based on virtualisation,
where resources, in terms of infrastructure applications and data are deployed via the
Internet as a distributed service by one or several service providers. These services are
scalable on demand and can be charged on a pay-per-use basis (Bhm et al. 2011).
2.1.1 Overlapping Definitions
A number of authors in various papers and articles acknowledge the fact that some aspects
of Cloud Computing have been around for some time under different terminologies
(Yfoulis & Anastasios 2009; Foster et al. 2008; Jaeger et al. 2009). Yfoulis & Anastasios
(2009) explain that Cloud Computing builds on top of several other technologies, i.e.
distributed computing, grid computing, utility computing and autonomic computing, and
that it can be envisaged as a natural step forward from the grid-utility model.
Ian Foster et al. (2008) in their paper, comparing Grid Computing with Cloud Computing,
clarify the distinction and similarity in their definitions; these definitions are constantly
changing to reflect newer technology. Jaeger et al. (2009), also refer to the similarity
between Cloud Computing and Utility Computing services.
2.1.1.1 Grid Com putin g
Foster et al. (2008) argue that Cloud Computing not only overlaps with Grid Computing, it
has indeed evolved out of Grid Computing and relies on it as its backbone and
infrastructure support. What is in common between Grid and Cloud computing is their
vision: their aim is to reduce the cost of computing, increase reliability and increase
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
13/123
6
flexibility by transforming computers from something that we buy and operate ourselves to
something that is operated by a third party (Foster et al. 2008).
Biswas (2011) defines Grid Computing as the use of computer resources from multiple
administrative domains to reach a common goal. Grid computing may be represented as a
super virtual computer composed of a network of loosely coupled computers acting
together to perform humongous tasks. Goyal and Lawande (cited by Stanoevska-Slabeva
& Wozniak 2010) explain the term Grid Computing from the user perspective: Grid
Computing means that the user can simply request information and computations and have
them delivered to him without necessity to care where the data required resides or which
computer is processing his request.
2.1.1.2 Utili ty Com putin g
Utility computing is another business model which, as described by Biswas (2011),
involves renting computing resources such as hardware, software and network bandwidth
on an as-required, on-demand basis. In 1961, John McCarthy of MIT (cited by Biswas
2011) is quoted saying:
If computers of the kind I have advocated become the computers of the future,then computing may someday be organized as a public utility just as thetelephone system is a public utilityThe computer utility could become the basisof a new and important industry.
Foster et al. (2008), also agree that Utility Computing, is not a new paradigm of
computing infrastructure; on the contrary it is a business model in which computing
resources, such as computation and storage, are packaged as metered services similar to a
physical public utility, such as electricity and public switched telephone network.
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
14/123
7
Biswas (2011) argues that although both grid computing and utility computing were
precursors to Cloud Computing, nowadays they can be considered as implementations of
the latter. For Cloud Computing does everything grid computing and utility computing do,
and much more. For example, Cloud Computing is not restricted to specific networks, but
it is accessible through the biggest network of them all the Internet. Also, virtualization
of resources and its consequent advantages of scalability and reliability are much more
pronounced in Cloud Computing (Biswas 2011b).
2.2 Deployment Models
Clouds may be divided into:
Private: services built according to Cloud Computing principles, but accessible
only within a private network
Public: available publicly - any organisation may subscribe Community: exclusively used by a specific community with shared concerns
Hybrid: a mix of the above
2.2.1 Private Cloud
This cloud infrastructure is provisioned for exclusive use by a single organisation
comprising multiple consumers (e.g. business units). It may be owned, managed, and
operated by the organisation, a third party, or a combination of both, and it may exist on or
off premises (Mell & Grance 2011). Armbrust et al. (2009) explain the term Private Cloud
as the internal data centre of a business or other organisation, which is not made available
to the general public. Schubert (2010) explains that Private Clouds could be either owned
or leased by the respective enterprise. An example of a Private Cloud is eBay.
A private cloud offers many of the benefits a public cloud computing environment
provides, such as being elastic and service based, but it is managed within an organization
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
15/123
8
(Marston et al. 2011). Private clouds provide greater control over the cloud infrastructure,
and are often suitable for larger installations. A private cloud can actually be handled by a
third-party provider, e.g. the Government Cloud product from Google5 that will store both
applications and data of government agencies in a completely segregated environment
(Marston et al. 2011).
2.2.2 Public Cloud
Mell & Grance (2011) in The NIST 6 Definition of Cloud Computing explain that the
public cloud infrastructure is provisioned for open use by the general public. It may be
owned, managed, and operated by a business, an academic, or a government organisation
or some combination of them and it exists on the premises of the cloud provider. Marston
et al. (2011) and Schubert (2010) also comment that a public cloud is characterized as
being available from a third party service provider via the Internet, and is a cost-effective
way to deploy IT solutions, especially for small or medium sized businesses. Armbrust etal. (2009) describe that when a Cloud is made available in a pay-as-you-go manner to the
public, it is called a Public Cloud; while the service being sold is Utility Computing.
Examples of Public Utility Computing include Amazon Web Services 7 , Google
AppEngine 8, and Microsoft Azure 9.
2.2.3 Community Cloud
A third cloud infrastructure is the Community Cloud, which is exclusively used by a
specific community of consumers from organisations that have shared concerns (e.g.
mission, security requirements, policy and compliance considerations). The NIST (Mell &
5 http://www.google.com/apps/intl/en/government/trust.html 6 National Institute of Standards and Technology - part of the U.S. Department of Commerce 7 http://aws.amazon.com/8 https://developers.google.com/appengine/
9 http://www.windowsazure.com/en-us/
http://www.google.com/apps/intl/en/government/trust.htmlhttp://www.google.com/apps/intl/en/government/trust.htmlhttp://www.google.com/apps/intl/en/government/trust.htmlhttp://aws.amazon.com/http://aws.amazon.com/https://developers.google.com/appengine/https://developers.google.com/appengine/http://www.windowsazure.com/en-us/http://www.windowsazure.com/en-us/http://www.windowsazure.com/en-us/https://developers.google.com/appengine/http://aws.amazon.com/http://www.google.com/apps/intl/en/government/trust.html8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
16/123
9
Grance 2011) definition includes that a Community cloud may be owned, managed, and
operated by one or more of the organisations in the community, a third party or some
combination of them, and it may exist on or off premises. In particular, smaller SMEs
could profit from community clouds to which different entities contribute with their
(smaller) infrastructure.
2.2.4 Hybrid Cloud
Another type of cloud infrastructure is the Hybrid Cloud. This is a composition of two or
more distinct cloud infrastructures (private, public or community) which remain unique
entities, but are bound together by standardised or proprietary technology that enables data
and application portability (Mell & Grance 2011).
Hybrid clouds could be useful in situations where an organisation would like to maintain a
degree of control over certain things, for example the storage of sensitive data. Costreduction can be achieved by having a Private Cloud for complete monitoring whilst
outsourcing other less sensitive procedures to the Public Cloud.
2.3 Service Models
Cloud Computing services are broadly divided into three categories: Infrastructure-as-a-
Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). Nmeek
& Vakov (2012) briefly explain these categories and describe that these encompass all
parts of a company's IT needs.
IaaS This is at the infrastructure level, where the customer is hiring the use of
hardware (usually servers) and the provider will take care of the hardware
maintenance. Users are allowed to install their own virtual servers.
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
17/123
10
PaaS - This service provides developers with a framework that they can build upon
in order to develop their own applications or customise existing applications. A
provider is not only hiring the platform on which the application is running, but
also complete resources to support whole life cycle of the application creation.
SaaS This is the most common as -a-se rvice variation. The customer will not
buy the software but rather hire it as a service from a provider. The provider offers
the application and the needed infrastructure. The customer pays for the use of the
software as a subscription. Therefore, there is no investment in the application, no
maintenance, just use of the application via Internet. (N meek & Va kov 2012)
2.3.1 Infrastructure as a Service (IaaS)
Qamar et al. (2010) explain that in this model, clients of the cloud service rent entire
computing nodes, such as virtual machines. Mell & Grance (2011) also express that
through this service, the provider supplies the processing, storage, networks and other
fundamental computing resources; and the customer is able to deploy and run arbitrary
software, which can include operating systems and applications. Mell & Grance (2011)
continue that the consumer does not manage or control the underlying cloud infrastructure
but has control over operating systems, storage, and deployed applications; and possibly
limited control of select networking components (e.g. host firewalls). Qamar et al. (2010)
also explain that although particular operating system templates may be available, the
client is responsible for maintaining the operating system and the software that is to run
above it. Examples of this model include Amazons E C210, Rackspace 11 , and Nimbus 12.
Schubert (2010) makes reference to IaaS as Resource Clouds, which provide resources as
services to the user. These resources vary from accessibility to data of potentially dynamic
size, to computational resources. Virtual Machines are the common form of providing
10 http://aws.amazon.com/ec2/11 http://www.rackspace.com/
12 http://www.nimbusproject.org/
http://aws.amazon.com/ec2/http://aws.amazon.com/ec2/http://www.rackspace.com/http://www.rackspace.com/http://www.nimbusproject.org/http://www.nimbusproject.org/http://www.nimbusproject.org/http://www.rackspace.com/http://aws.amazon.com/ec2/8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
18/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
19/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
20/123
13
Also the migration of user data is a task that should not be underestimated (Bhm et al.
2011).
2.4 Roles
In a cloud environment, individual roles can be identified which together make the whole
system work.
2.4.1 Cloud Providers
Cloud Providers, also referred to as Service Providers or IT vendors, develop and operate
services which offer value to the customer. They operate and offer Cloud Computing
services to third parties either via dedicated APIs (PaaS), virtual machines and/or direct
access to the resources (IaaS) (Schubert 2010; Bhm et al. 2011). The providers will
perform the maintenance and the upgrades on the system and will also be responsible for
maintaining the software used on the cloud, along with pricing the cloud services (Marston
et al. 2011).
2.4.2 Cloud Resellers or Aggregators
Aggregate services providers combine existing or parts of services to form new services
and offer them to customers. Therefore, they are both a customer (from the service
providers perspective) and a service provider (from the customers perspective) (Bhm et
al. 2011). Cloud aggregators may expose a single interface to a merged cloud
infrastructure. They match the economic benefits of global cloud infrastructures with the
understanding of local customer needs by providing highly customized, enhanced offerings
to local companies (especially SMEs) (Schubert 2010).
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
21/123
14
2.4.3 Cloud Adopters
Cloud Adopters, also referred to as Software/Services Vendors by Schubert (2010)
enhance their own services and capabilities by exploiting cloud platforms from cloud
providers or cloud resellers. Marston et al.(2011) introduce the term Enablers to describe
those organizations that will sell products and services that facilitate the delivery, adoption
and use of Cloud Computing. This enables them to, for instance, provide services that
scale to dynamic demands in particular new business entries which cannot as yet estimate
the uptake/demand of their services (Schubert 2010). Enablers will also include specialized
software firms that will provide monitoring software, platform migration software, etc. In
the case of large enterprises, it is also important to implement an organization-wide
consistent IS policy across the different Cloud Computing services (Marston et al. 2011)
2.4.4 Cloud Consumers
Different notions are used for this role including Users, Customers and Subscribers, they
all refer to the end-client who makes direct use of the cloud capabilities in order to either
execute complex computations or to host a flexible data set (Schubert 2010; Marston et al.
2011). The customer buys services through various distribution channels, for example
directly from the service provider, resellers or through a platform provider (Bhm et al.
2011).
Schubert (2010) also makes reference to the Prosumer concept, in which the user
becomes provider and consumer at the same time.
2.4.5 Regulators
All the above-mentioned stakeholders represent different pieces of the Cloud Computing
value -chain. In contrast, the role of the regulator (whether it is a sovereign government
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
22/123
15
body or an international entity) is one that pervades across the other stakeholders (Marston
et al. 2011). Regulations should be in place to avoid or at least minimise issues which
might arise amongst the different bodies exercising different roles.
Bacon et al. (2010) explain that with the advent of Cloud Computing, protection of the data
entrusted to services has not yet been addressed. Indeed, the owners of the services are
unlikely to be the owners of the systems on which the services run. The question which
arises is if a major leakage of data occurs, who should be held responsible?
2.5 Perception
Some SMEs remain reluctant to avail themselves of broadband services, or consider the
possible advantages of Cloud Computing, due to perceptions (or misconceptions)
regarding possible capital investment, fear of complexity, lack of understanding of the
potential benefits and lack of technical resources. Jayakar et al. (cited by Neves et al.
2011) conclude that others are more willing to test broadband or Cloud applications, but do
not see it as part of a larger strategy. Sultan (cited by Neves et al. 2011) explains that
evidence also suggests even large companies (contrary to conventional wisdom) are
actually embracing Cloud services. Consequently, an increasing number of companies
(small and large) are beginning to see some real value in using the Cloud.
2.6 Benefits
The Cloud constitutes a single point of access for all services which are available anywhere
in the world. This is very beneficial for organisations, especially SMEs, since it allows
certain activities which otherwise are difficult or impossible to achieve. Through Cloud
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
23/123
16
Computing SMEs can compete directly with larger competitors. Neves et al. (2011) give a
list of how Cloud Computing fits specific SMEs needs, some of which involve:
Their availability off the shelf. They are very user friendly. Their relative low price when compared to the huge initial capital expenditure one
would have to make on start-up.
A number of different options to choose from. Easier customer support and communication. Availability of staff to work with and maintain the system.
2.6.1 Capital Expenditure
The elimination of an up-front commitment by Cloud users, in this manner allows
organisations to start small and add more hardware resources only when there is an
increase in their needs, thus minimising project and financial risks (Armbrust et al. 2009;
Marston et al. 2011; Robson Communications Inc. 2010). Computational exercises
typically involve large amounts of computing power for relatively short amounts of time,
and Cloud Computing makes such dynamic provision of resources possible without
investing into a lot of resources which would be used for a limited time only (Marston et
al. 2011).
2.6.2 Immediate Delivery
This refers to the infinite computing resources available on demand, whilst eliminating the
need for Cloud Computing users to plan far ahead for provisioning (Armbrust et al. 2009).
In order to setup an in-house system one would require a substantial amount of both
financial and physical resources; such as purchasing hardware, building floor space,
adequate power supplies and cooling systems; installing operating systems, software,
provisioning the network and securing back up power. Apart from making this process
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
24/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
25/123
18
Catteddu & Hogben (2009) state that all kinds of security measures are cheaper when
implemented on a larger scale.
Cloud service providers can help organisations in advanced monitoring, OS provisioning,
application lifecycle management and configuration management, which can otherwise be
highly expensive. As the cloud service provider has the economies of scale required to
develop and maintain the level of network security needed, customers are safeguarded
from attacks such as viruses, spam, phishing and hacking (Robson Communications Inc.
2010).
2.6.5 Economies of Scale
Catteddu & Hogben (2009) express that Cloud service providers are in a better position
than individual organisations because of their larger volume. These are known as
economies of scale14
. These benefits of scale include: Multiple locations: most cloud providers have the economic resources to replicate
content in multiple locations by default. This increases redundancy and
independence from failure and provides a level of disaster recovery out-of-the-box.
Edge networks: storage, processing and delivery closer to the network edge mean
that service reliability and quality are increased overall and local network problems
are less likely to have global side effects.
Improved timeliness of response: especially to incidents response. W ell-runlarger-scale systems can develop more effective and efficient incident response
capabilities due to ability to detect early detection of new malware deployments.
Threat management: cloud providers can also afford to hire specialists in dealing
with specific security threats, while smaller companies can only afford a small
number of generalists. (Catteddu & Hogben 2009).
14 The increase in efficiency of production as the number of goods being produced increases. Typically, a company thatachieves economies of scale lowers the average cost per unit through increased production since fixed costs are sharedover an increased number of goods. http://www.investopedia.com/terms/e/economiesofscale.asp#ixzz1vistsc2Z
http://www.investopedia.com/terms/e/economiesofscale.asp#ixzz1vistsc2Zhttp://www.investopedia.com/terms/e/economiesofscale.asp#ixzz1vistsc2Zhttp://www.investopedia.com/terms/e/economiesofscale.asp#ixzz1vistsc2Z8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
26/123
19
2.6.6 Easy Scale-up
Cloud Computing makes it easier for enterprises to scale their services which are
increasingly reliant on accurate information according to client demand (Marston et al.
2011). The list of cloud resources which can be rapidly scaled on demand includes
storage, CPU time, memory, web service requests and virtual machine instances. As such,
scalability can be quantified by the amount of usage of extra resources which are
automatically commissioned with the increase in demand and charged on a pay-per-
consumption basis. However, the actual importance of scalability lies in the fact that
resources are made available in minutes, which otherwise would have taken weeks or even
months (Misra & Mondal 2010). A cloud provider has the potential to dynamically
reallocate resources for filtering, traffic shaping, encryption, etc. in order to increase
support for defensive measures (e.g. against DDoS 15 attacks) when an attack is likely to
take place or is taking place. The ability to dynamically scale defensive resources on
demand has obvious advantages for resilience (Catteddu & Hogben 2009).
2.6.7 Other Benefits
Another great advantage of Cloud Computing is ubiquitous access or mobility, which
allows employees to be productive from wherever they are rather than confining them to
their desks at the company (Misra & Mondal 2010). The ability to access any Cloud
system through any device with Internet access is very valuable.
Disaster recovery is a very important aspect of enterprise computing. As devices, systems,
and networks get increasingly complex, there are more room for other different things to
15 A distributed denial-of-service (DDoS) attack is one in which a multitude of compromised systems attack a single
target, thereby causing denial of service for users of the targeted system. The flood of incoming messages to the targetsystem essentially forces it to shut down, thereby denying service to the system to legitimate users.http://searchsecurity.techtarget.com/definition/distributed -denial -of -service -attack
http://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attackhttp://searchsecurity.techtarget.com/definition/distributed-denial-of-service-attack8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
27/123
20
go wrong. Disaster may occur due to several causes including natural and man-induced
ones. Disaster recovery and business continuity planning are becoming increasingly
important for every business organization. Disaster recovery planning16
is done by
replicating resources in a number of places. This fear is very much reduced in the cloud as
data is replicated thrice and stored in servers which are geographically scattered (Misra &
Mondal 2010).
Koehler et al. (2010) conducted a study on the Consumer Perceptions on Cloud Services,
they also compared results with Hostings (2009) and IDCs (2009) studies. Hostings
survey (cited by Koehler et al. 2010) reveals that the three most important factors, which
drive the consumers to invest in Cloud Computing are: Cost Savings as the number one
factor (34% of the respondents); High availability (17%), Performance (12%) and
Consumption Based Pricing (12%). The IDC study (cited by Koehler et al. 2010) comes up
with similar issues. Most of their respondents (83%) rate competitive pricing as the most
important attribute.
However, Koehler et al.s (2010) survey shows that financial factors, that is, less initial
costs and less on- going costs, only ranked 5th and 6th in consumers consideration in order
of importance. Instead, respondents seemed to appreciate more the flexibility, especiallythe possibility of accessing applications from anywhere and anytime, as well as the ability
of scaling the application usage on demand (Koehler et al. 2010).
A possible explanation for the lower rank of financial aspects could be because of the
different approach of the survey. Although companies may take the cloud solution into
16 A plan for business continuity in the event of a disaster that destroys part or all of a business's resources, including ITequipment, data records and the physical space of an organization. http://www.webopedia.com/TERM/D/DRP.html
http://www.webopedia.com/TERM/D/DRP.htmlhttp://www.webopedia.com/TERM/D/DRP.htmlhttp://www.webopedia.com/TERM/D/DRP.html8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
28/123
21
consideration because of their financial benefits; when they are choosing a specific cloud
provider, other service attributes play a more crucial role in the decision process (Koehler
et al. 2010).
2.7 Issues
2.7.1 Economic Issues
Armbrust et al. (2009) explain that although the economic appeal of Cloud Computing is
often described as converting capital expenses to operating expenses (CapEx to OpEx),
they believe the phrase pay as you go captures more directly the economic benefit for the
buyer. Schubert (2010) similarly refers to the Pay per use concept, which is the
capability to build up costs according to the actual consumption of resources. Hours
purchased via Cloud Computing can be distributed non-uniformly in time (e.g. use 100
server-hours today and no server-hours tomorrow, and still pay only for what you use). In
addition, the absence of up-front capital expense allows capital to be redirected to core
business investment (Armbrust et al. 2009; Schubert 2010) .
A term which is very popular in economics is Opportunity Cost 17: this can be applied to a
decision to either retain on-premise IT or move to the Cloud. Kepes (2011) found that
roughly 80% of IT time and expenditure is wasted on processes which do not create any
value for the organization (beyond maintaining the status quo). The opportunity cost of not
choosing the Cloud is therefore the benefit that can accrue to the organisation through
optimal utilization of that 80%. Simply put, a move to the Cloud can make the difference
between an organization being 20% efficient, to one being 80% efficient (Kepes 2011).
17 The cost of an alternative that must be forgone in order to pursue a certain action. The benefits you could havereceived by taking an alternative action. http://www.investopedia.com/terms/o/opportunitycost.asp#ixzz1wdW1eprZ
http://www.investopedia.com/terms/o/opportunitycost.asp#ixzz1wdW1eprZhttp://www.investopedia.com/terms/o/opportunitycost.asp#ixzz1wdW1eprZ8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
29/123
22
Even though pay-as-you-go pricing could be more expensive than buying and depreciating
a comparable server over the same period, the cost is outweighed by the extremely
important Cloud Computing economic benefits of elasticity and transference of risk,
especially the risks of over-provisioning (underutilisation) and under-provisioning
(saturation) (Armbrust et al. 2009).
Another common term in economics is Elasticity 18 , the key observation is that Cloud
Computing gives the ability to add or remove resources at a fine grain (one server at a time
with EC2) and with a lead-time of minutes rather than weeks, allowing matching resources
to workload much more closely. Armbrust et al. (2009)explain that this underestimates the
benefits of elasticity, because in addition to simple diurnal patterns, most nontrivial
services also experience seasonal or other periodic demand variations (e.g. e-commerce
peaks in December and photo sharing sites peak after holidays) as well as some unexpected
demand bursts due to external events (e.g. news events). Since it can take weeks to acquire
and rack new equipment, the only way to handle such spikes is to provision for them in
advance (Armbrust et al. 2009).
Being a more environmental conscious society, the Going Green issue is nowadays more
important. This is also relevant in Cloud Computing, not only to reduce additional costs ofenergy consumption, but also to reduce the carbon footprint. Whilst carbon emission by
individual machines can be quite well estimated, this information is actually taken little
into consideration when scaling systems up. Clouds principally allow reducing the
consumption of unused resources (down-scaling). In addition, up-scaling should be
carefully balanced not only with cost, but also with carbon emission issues (Schubert
18 The degree to which a demand or supply curve reacts to a change in pricehttp://www.investopedia.com/university/economics/economics4.asp#ixzz1wepO6Ug9
http://www.investopedia.com/university/economics/economics4.asp#ixzz1wepO6Ug9http://www.investopedia.com/university/economics/economics4.asp#ixzz1wepO6Ug98/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
30/123
23
2010). In a paper published by Robson Communications Inc. (2010) reference is also
made to Green IT policies which companies are looking to adopt. Cloud service providers
are uniquely positioned to deliver a compelling alternative to an on-premise technology
upgrade, helping contribute to a company s efforts to reduce its carbon footprint (Robson
Communications Inc. 2010).
2.7.2 Legal Issues
A number of authors make direct reference to a various legal issues an organisation should
look at before committing to a cloud service provider (Catteddu & Hogben 2009; Marston
et al. 2011; Qamar et al. 2010; Bacon et al. 2010). The parties to a contract should pay
particular attention to their rights and obligations related to notifications of breaches in
security, data transfers, creation of derivative works, change of control, and access to data
by law enforcement entities. Because the cloud can be used to outsource critical internal
infrastructure, and the interruption of that infrastructure may have wide ranging effects, the parties should carefully consider whether standard limitations on liability adequately
represent allocations of liability, given the parties use of the cloud, or responsibilities for
infrastructure (Catteddu & Hogben 2009).
Subpoena and E-Discovery
Where there is the need of the confiscation of physical hardware as a result of subpoena 19
by law-enforcement agencies or civil suits, the centralisation of storage as well as shared
tenancy of physical hardware means that many more clients are at risk of the disclosure of
their data to unwanted parties (Catteddu & Hogben 2009). However Marston et al. (2011)
and Catteddu & Hogben (2009) maintain that it may become impossible for an agency to
19 A writ commanding a person designated in it to appear in court under a penalty for failure http://www.merriam-webster.com/dictionary/subpoena
http://www.merriam-webster.com/dictionary/subpoenahttp://www.merriam-webster.com/dictionary/subpoenahttp://www.merriam-webster.com/dictionary/subpoenahttp://www.merriam-webster.com/dictionary/subpoena8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
31/123
24
confiscate a cloud because all servers and desktop are virtualized, being brought up and
shut down as needed.
Risk from Changes of Jurisdiction
Customer data may be held in multiple jurisdictions, some of which may be high risk.
Usually the customer will not know exactly where his data resides, hence would not know
under which jurisdiction it is. If data centres are located in high-risk countries, (e.g. those
lacking the necessary legislation, having an unreliable legal framework and enforcement,
states that do not respect international agreements, etc.), sites could be raided by local
authorities and data or systems will be subject to enforced disclosure or seizure (Catteddu
& Hogben 2009).
Data Protection Risks
Any company transferring its computing activities to the cloud risks running afoul of
different countries' laws governing data protection, most notably in the EU, which possibly
has the most stringent data protection laws (Marston et al. 2011). Cloud Computing poses
several data protection risks for cloud customers and providers. In some cases, it may be
difficult for the cloud customer (in its role as data controller) to effectively check the data
handling practices of the cloud provider therefore making sure that the data is handled in a
lawful way (Catteddu & Hogben 2009).
Licensing Risks
Catteddu & Hogben (2009) also make reference to licensing conditions, such as per-seat
agreements, and online licensing checks may become unworkable in a cloud environment.
For example, if software is charged on a per instance basis every time a new machine is
instantiated then the cloud customers licensing costs may increase exponentially even
though they are using the same number of machine instances for the same duration. When
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
32/123
25
creating original work in the cloud (new applications, software etc.), there might be the
risk that the original work will not be protected by the appropriate contractual clauses
(Catteddu & Hogben 2009).
2.7.3 Security Issues
Bryan Gardiner (cited by Qamar et al. 2010) expresses that companies are mostly
concerned about lost or stolen data. In a survey conducted by a research firm IDC (cited by
Qamar et al. 2010), almost 75 % of IT executives reported that security was their primary
concern. Security in the cloud must be included from the start. This demands a new
approach to end-to-end security that supports strong isolation of data, even when business
processes are outsourced into the cloud. Cloud processing needs isolation among users of
shared services, as well as isolation among services (Bacon et al. 2010). In using cloud
infrastructures, the client necessarily cedes control to the Cloud Provider on a number of
issues which may affect security.
Data Lock-In
Due to lack of procedures, standard data formats or services interfaces that could guarantee
data, application and service portability (Catteddu & Hogben 2009; Armbrust et al. 2009),
it can be difficult for the customer to migrate from one provider to another or migrate data
and services back to an in-house IT environment. This might create a problem, as the user
would be dependent on that particular provider for service provisioning.
Isolation Failure
Since Cloud Computing is based on multi-tenancy and shared resources, there might be the
risk of failure of mechanisms which separate storage, memory, routing and even reputation
between different tenants (e.g. guest hopping attacks) (Catteddu & Hogben 2009).
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
33/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
34/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
35/123
28
attractive for small and medium-sized enterprises because smaller companies do not have
the possibility of setting up a giant data centre (Qamar et al. 2010).
2.9 Cloud Service Provider
Cloud service providers face the challenge of balancing the need to provide a high level of
service availability and quality of services (QoS) to meet its customers needs with the
business need to operate profitably. With QoS controls available, cloud providers offer a
range of services and price points which provide more choice to customers and back these
services with service level agreements (SLAs). The result for enterprises is lower-cost IT
infrastructure, applicable to a greater range of application types, obtained by combining
shared platform economics with high levels of performance assurance (Lamba & G. Singh
2011).
An organisation should ask and clarify a number of issues with the cloud provider to be
assured that they are sufficiently protecting the information entrusted to them. Some of
these issues are listed below:
Division of Liabilities - Although in many jurisdictions cloud providers can be held
liable for the illegal data they might be hosting, the eCommerce Directive
(2000/31/EC) introduced special liability protection for hosting providers (Eecke
2012; Catteddu & Hogben 2009). In security incidents, ranging from data leakageto the use of an account to launch an attack, both parties would be held responsible
for the due diligence of what is under their control (Catteddu & Hogben 2009). A
distinction is made in EU Directive 95/46/EC and other rules between the Data
Controller and the Data Processor. The distinction is crucial, as it will determine
the respective responsibilities. The Data Controll er is liable towards the data
subjects (Eecke 2012; Catteddu & Hogben 2009).
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
36/123
29
Division of Responsibilities - With reference to security incidents, there needs to be
a clear definition and understanding between the customer and the provider of
security-relevant roles and responsibilities. Some of the typical liabilities of service
providers (cited by Catteddu & Hogben (2009)) are:
o Physical support infrastructure (facilities, rack space, power, cooling,
cabling, etc.)
o Physical infrastructure security and availability (servers, storage, network
bandwidth, etc.)
o OS patch management and hardening procedures (check also any conflict
between customer hardening procedure and provider security policy)
o Security platform configuration (Firewall rules, IDS/IPS tuning, etc.)o Systems monitoring
o Security platform maintenance (Firewall, Host IDS/IPS, antivirus, packet
filtering)
o Log collection and security monitoring
In the case of standard terms of service (i.e. no negotiation possible), cloud customers
should verify what lies within their responsibility (Catteddu & Hogben 2009).
The real challenge for a cloud service provider is defining which technology improvements
will deliver a significant performance gain in a cost-effective manner. Prior to selecting
which technology improvement to pursue, a cloud service provider should first investigate
how its infrastructure relates to its business model. Identifying the drivers of total
ownership costs is the key to finding the right mix of technology and processes that will
optimize a cloud service providers quality of service (Sahlin et al. 2012).
In order to arrive to the final Cost Calculation, Service Providers would take a number of
costs into consideration; these would then be spread amongst the whole pool of cloud
users. The following list (cited by X. Li et al. 2009) gives a brief overview of some of
these costs:
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
37/123
30
Server Cost : In Cloud, servers are mounted in the racks and constructed into a
resource pool.
Software Cost : Mainly this includes licenses e.g. Operating Systems software, VM
software and management software.
Network Cost : Cost related to networking is caused by switches, NIC and cables
which are used to attach physical servers to the network.
Support and Maintenance Cost : This metrics item also belongs to soft cost, but
includes some important work, such as software distribution and upgrading, asset
management, troubleshooting, traffic management, servers configuration, virus
protection, disk management and performance maintenance
Power Cost : Power consumption in Cloud is primarily caused by Computing
Infrastructure (IT loads) including Server servers, network switches and Network
Critical non-IT
Physical Infrastructure: Transformers, uninterruptible power supplies, power
wiring, fans, air conditioners, pumps, humidifiers and lighting.
Cooling Cost : As a first-order approximation, the power consumed in the data
centre is completely converted to heat.
Real-Estate Cost : Due to the special infrastructure required like cooling and
power, space needed by a Cloud is often significantly more expensive to build than
standard commercial properties.
Several Cloud Computing (and conventional computing) data centres are being built in
seemingly surprising locations, such as Washington (Google, Microsoft, Yahoo! and
others) and San Antonio, Texas (Microsoft, US National Security Agency and others). The
motivation behind choosing these locales is that the costs for electricity, cooling, labour,
property purchase costs and taxes are geographically variable, and of these costs,
electricity and cooling alone can account for a third of the costs of the data centre
(Armbrust et al. 2009).
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
38/123
31
3 RESEARCH METHODOLOGY
3.1 Justification of the Methodological Rationale
The aim of this study is to find out the extent of use or non-use of Cloud Computing within
Maltese Business Organisations. When using the term Maltese Business Organisations,
one understands all registered Maltese organisations. The researcher will seek findings
from the views of practitioners in managerial positions and decision makers within Maltese
organisations within the Private Sector. Their opinions, founded by their experience and
knowledge, will provide an insight on whether the use of Cloud Computing is beneficial to
their organisations. Their conceptions give a general overview of potential benefits and
issues their company would enjoy or face when committing to such investment. In
addition, the study will investigate the Regulators role in Malta together with Cloud
Service Providers to get a better picture of the whole scenario.
Thus, this research merits a phenomenological approach since the researcher will seek to
evaluate knowledge from the experiences, thoughts and opinions of the respondents. The
goal of qualitative phenomenological research is to describe a "lived experience" of a
phenomenon (Waters 2007). From the phenomenological paradigm, one can see that one
of the basic beliefs of the named paradigm is that the world is socially constructed and is
subjective. The observer is part of what is being researched, thus care should be taken in
distancing oneself from the research in order to be able to make objective observations.
From its very nature the research in question, which studies the incorporation of Cloud
Computing into different businesses, is focusing on the meaning of Cloud Computing and
its benefits to the individual organisations, it is very much based on different situations.
Since it is a more qualitative methodology rather than a quantitative methodology, methods
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
39/123
32
to analyze its data must be quite different from more traditional or quantitative methods of
research in order to be able to investigate small samples in more depth.
The assumption for this study is that people who are informed or have experienced Cloud
Computing would be more familiar with the advantages and disadvantages and therefore
would be more able to form an opinion about its likelihood for their organisation. Their
opinion is also important since they are most likely to be the decision makers in such
scenarios, to choose whether to invest in Cloud Computing or not.
Qualitative research will also be applied since Cloud Computing is a relatively new
approach to Maltese Organisations. Neill (2007) pointed out that qualitative research is
used when the researcher may only know roughly in advance what he/she is looking for.
Thus, qualitative research is the most appropriate technique with which to ask Why and
How questions to discover new insights.
3.2 Research Methods
3.2.1 Data Collection Methods
The information was collected through a number of face-to-face interviews which were
carried out during June 2012. The interviews were all audio-recorded in order to be able to
analyse each opinion more deeply.
Primary data was collected from the semi-structured face-to-face interviews carried out
with top management personnel and with employees who are more technical. Semi-
structured interviews were chosen over questionnaires and other research tools as they are
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
40/123
33
the most convenient tool to analyse personal opinions. Secondary data was not used since
no such information was collected before. The semi-structured interviews consisted of
open-ended questions which were prepared in advance; leaving the respondents free to
give their opinion and not narrowed down to specific answers only.
The purposeful sample consisted of Directors, CIOs, CTOs, and Head of Departments
from different types of Maltese organisations, from different Industries: such as the
Gaming industry, IT services, and from Professional Services sector which include legal
advice, accounting services, auditing and tax advisory.
Semi-structured interviews were carried out with two Cloud Computing Service Providers;
namely BMIT and GFi. Similar questions were asked, in this case from the s uppliers
point of view. In order to be able to get an overview of the regulations pertaining to
Maltese business organisations, semi-structured interviews were also carried out with
Regulators, namely MFSA (Malta Financial Services Authority) and the LGA (Lotteries
and Gaming Authority in Malta).
3.2.2 Criteria for Sample Selection
The target population included a range of companies from various industries. These were
limited to those industries which make use of ICT in their day-to-day business processes.
Convenience sampling was used to select the companies from within the population to
conduct the interviews. This non-probability sampling technique is commonly used in
academic qualitative research, where time, workforce and money bound the researcher.
Samples are in fact selected because they are accessible to the researcher. The
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
41/123
34
disadvantage of convenience sampling is that the method is not a product of a randomized
selection process and thus the results cannot be inferred to the whole population.
Initially interviewees were informally contacted via acquaintances, LinkedIn and their
website. Subsequently interviewees were contacted via email to set an appointment to go
through the semi-structured interview together. I also informed all the interviewees that all
data gathered was to be used only for academic purposes, I forwarded them a
Confidentiality form signed by both my tutor and myself (found in Appendix A, page 103) .
Unfortunately it was somewhat difficult to set-up meetings for the interview given that
everyone is nowadays struggling with busy schedules and have less time to spare on
something which will not be of benefit to their organisation. However, I managed to
gather enough information for the purpose of this dissertation.
3.3 Semi-Structured Interviews Design
In general, the questions were structured to capture the respondents opinion about
characteristics of Cloud Computing that were found during the literature review.
3.3.1 Users Interview
General Information
First, I wanted to gather some general information about the interviewees.
Some questions that were asked to get an overview of the interviewee and the company
he/she was representing were similar to:
Describe the nature of your organisation In which sectors/industries do you operate? What is your title/position in the organisation?
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
42/123
35
What is the size of your company?
Cloud Computing Perception
I also wanted to investigate the interviewees general understanding of Cloud Computing.
In the cases where the interviewee was knowledgeable about the concept, I asked for an
overview with regards to advantages and disadvantages Cloud Computing could offer. I
will compare the different perceptions which were brought up during the interview to the
potential benefits and issues which were found out during the literature review. The
questions asked were on the lines of:
What do you understand with the term Cloud Computing? Can you mention some advantages and disadvantages of Cloud Computing?
On the other hand, in the cases where the user was not knowledgeable about the term
Cloud Computing, I explain what the concept implies. There were cases where the
interviewee was aware of some services which fall under Cloud Computing but was not
fully aware of the whole concept of Cloud Computing. In such cases, he/she were still able
to identify some perceived advantages and disadvantages.
Cloud Computing Usage
The last set of questions was the investigation of how Cloud Computing is being used/
unused within Maltese Organisations. I asked the interviewees about the relevance of such
services within their organisation. The first question was whether they actually make use
of any Cloud Service. This eventually led to a different set of questions: whether they are
current users, potential users or whether they think Cloud Services are not suitable for such
organisation. In each situation, I asked for reasons why such a decision was made.
All Users:
Are you aware of the different Cloud Computing Services currently in the market,
both locally and internationally? As a Maltese organisation, which solution do you see as the most suitable?
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
43/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
44/123
37
3.3.2 Service Providers Interview
In order to be able to evaluate well the use of Cloud Computing within Maltese
organisations, I also discussed some issues with the Service Providers in Malta. They have
hands-on experience of the perception of Maltese organisations vis--vis their services. In
addition, I wanted to extract some issues which are specific to Malta.
Some sample questions asked were:
Which sectors/ industries are the most popular within your Cloud Computing users
pool?
Average size of companies which are investing in Cloud Computing? SMEs or
larger organisations?
What do you think is the perception of Maltese organisations decision makers? Which cloud services do you offer? Which ones are the most popular? Any common issues which you face? How do you ensure security to your clients? Where there any legal requirements which kept you back from offering additional
services? Or had an impact on the services you are offering?
What would you say are the main benefits of Cloud Computing for Maltese
organisations?
Which markets do you see the most profitable in the near future?
3.3.3 Regulators
Another relevant party to this study comprises the regulators in Malta. These include the
institutions and governmental entities which supervise the authenticity of the Service
Providers while offering guarantees to the users. The following few questions were asked
to the regulators since the scope of these questions is only to offer an overview of the
regulations in Malta:
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
45/123
38
What are the legal issues which organisations should look at before investing into
Cloud Computing services?
Are there any regulations pertaining to Maltese Organisations related to Cloud
Computing?
Are there any compliance requirements or certifications that the providers need to
adhere to?
3.4 Data Analysis Technique
All interviews were audio recorded to be able to examine the interviewees opinions better.
These were later evaluated by transcribing them into different codes and sections for easier
interpretation, contrasting and comparison of the answers given. The coded transcripts and
audio-records are available in Appendix B (found on page 105) .
Once all data was captured, transcribed and evaluated into different sections and coding,
Data Analysis was carried out by extracting graphs from the data. Where this extraction
was not possible, evaluation of each different answer was made and recorded.
3.5 Limitations
Since Cloud Computing is a fairly new concept in Malta, the stakeholders lack own
experience about the subject, although some turned out to be very knowledgeable. Most of
the interviewees are still deciding whether to opt for Cloud Computing or are in the
selection process, so most of the opinions were based on research they made and not
through experiences.
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
46/123
39
3.6 Conclusion
The ultimate aim of qualitative research is to offer a perspective of a situation and not to
provide a final conclusion regarding a subject. Myers (2000) understands that the mission
of qualitative research is to discover meaning and understanding, rather than to verify truth
or predict outcomes.
The way arguments are presented in the next discussions consists of a set of findings, given
the limitations of the study.
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
47/123
40
4 PRESENTATION AND ANALYSIS OF DATA
4.1 Descriptive Statistics
In total, thirteen (13) individuals from different Maltese Registered companies were
interviewed. The size of the companies they represented ranges from start-ups of two full-
time employees to multi-national companies with one hundred forty full-timers in their
Maltese offices. Four companies have between one and nine employees (1-9), three
companies have between ten and fifty employees (10-50), while another six companies
have between fifty and one hundred fifty full time employees (50-150). All companies
interviewed are Maltese registered companies; however, six of the named companies have
several other offices around the world.
Figure 4.1 - Size of the Interviewed Organisations
1-9 Employees10-50 Employees
50-150 Employees
0
1
2
3
4
5
6
4
3
6
Size of the Organisation
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
48/123
41
The respondents come from different industries and sectors ranging from IT services
including web design and development, card payment industry, online marketing,
Professional Services offering legal advice, tax consultation, auditing services, traditional
accounting etc; to the Gaming Industry offering complete online gaming solutions and
betting.
Figure 4.2 - Nature of the Organisations
Figure 4.2 above shows where each organisation falls within the named sectors. The roles
of the interviewed personnel consist of Foundation Partners, Directors, Chief Technical
Officer (CTO), Deputy Chief Information Officer (CIO), Head of IS Architecture, Head of
IT Department and Head of Software Development. All the interviewed parties have an
important role in the acquisition and management of their IT system; hence, they were all
relevant respondents to fulfil the aim of the study.
0
0.5
1
1.5
2
2.5
33
1
2
1
2
3
1
Nature of the Organisation
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
49/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
50/123
43
The other international company which makes intensive use of Cloud Computing is a
Gaming company. The head of IS Architecture, explained how they utilise SaaS for their
financial systems, PaaS for their mobile applications and for telepresence systems, while
IaaS since they host both Private and Public Cloud Hosting. Unfortunately not much more
information could be gathered about the current use of Cloud Services from this company
since the interview was carried out via email (found at Appendix B) as the Head of IS
Architecture does not reside in Malta.
Figure 4.3 - Current Use of Cloud Computing Services within Interviewed Companies
During the time when the interviews were being carried out, three companies were
implementing Cloud Computing Services. That is, they were during the finalisation of the
requirements discussions with their respective selected Service Providers. Two of these
companies decided to opt for a local Service Provider while the third company was after a
well- established foreign Service Provider. The comments of these three companies
representatives were based on the thorough research they went through during their
analysis stage.
15%
62%
23%
Currently Using Cloud Services
Yes
No
Currently Implementing
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
51/123
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
52/123
45
in its own data centre. In addition, it uses its own data centre for application hosting and
then uses Citrix software for virtualisation and thin provisioning. Thin provisioning is the
act of using virtualization technology to give the appearance of more physical resource
than is actually available.
4.1.3 Cloud Computing Understanding
As we saw in previous chapters, there is no general definition of the term Cloud
Computing; this is also reflected in the answers obtained during the interviews. The
general idea to which most definitions refer, is that Cloud Computing consists of Remote
Services running on multiple remote Servers which can be accessed from any Internet
point usually through a portal (see Figure 4.4) . Other comments referred to the storing and
hosting of your own data on third parties servers. Also, related to data hosting, reference
was made to a pool of resources (both software and hardware infrastructure) shared
between multiple users. This takes us to a point, which a CTO of a company madereference to, that Cloud Computing services could be the outsourcing of any layer of your
infrastructure from lower to higher level, including the people. That is, you can use the
Service Providers service for maintenance, support and technical issues, instead of having
your own IT Administrator. This all depends on the requirements of the specific
organisation, as there might be companies which do not have the expertise, time or
resources to manage their own servers hence they outsource this requirement.
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
53/123
46
Figure 4.4 - Interviewees understanding of the term Cloud Computing
Other respondents articulated the possibility to scale within minutes through Cloud
Computing which otherwise would not be possible or would be expensive to do. The CTO
of a particular IT Company also made reference to the different cloud setups which exist,
mainly the Private or Public Cloud and continued that if an organisations opts for services
through a Service Providers public cloud, it would be eliminating the CapEx (Capital
Expenditure) costs but most probably increasing the OpEx (Operating Expenditure) costs
in the long run. Another general explanation of what Cloud Computing entails is the
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
55
2
3 3
11
Cloud Computing Understanding
8/12/2019 Incorporating Cloud Computing Services Within Maltese Registered Business Organisations
54/123
47
capability of multiple as a service solutions, encapsulating software, hardware and
infrastructure.
4.1.4 Benefits, Issues and Concerns
4.1.4.1Benefits
Every business operates with the aim to make a profit; therefore, the majority of key
decisions are made by keeping the year-end profitability in mind. The decision either to
in
Recommended