21CSE362T - CLOUD COMPUTING (PE)

Course Outcomes (CO):

CO-1: Exhibit knowledge on basics of Cloud Computing
CO-2: Identify then type of services for various applications
CO-3: Predict the type of security to be applied for various cloud services
CO-4: Examine the concept of virtualization and capacity planning
CO-5: Recommend the service provider for specific requirement
 21CSE362T - CLOUD COMPUTING (PE)

Unit-1 - Fundamentals of Cloud Computing 9 Hour

Define Cloud Computing, Cloud Types, Characteristics of Cloud Computing, Benefits and
disadvantages of cloud systems, Assessing the Value Proposition, Measuring the Cloud’s Value,
Capital Expenditures, Total Cost of Ownership, Service Level Agreements, Licensing Models

Unit-2 - Cloud Architecture and Services 9 Hour

Cloud Computing Stack, Composability, Infrastructure, Platforms and Virtual Appliances,

Communication Protocols and Applications, Connecting to the Cloud, Infrastructure as a Service
(IaaS), Platform as a Service (PaaS), Software as a Service (SaaS)
 21CSE362T - CLOUD COMPUTING (PE)

Unit-3 - Cloud Security 9 Hour

Cloud Security Challenges, Software-as-a-Service Security, End-User Access to Cloud

Computing Overview, Identity Protocol Standards, Windows Azure Identity Standards

Unit-4 - Virtualization and Capacity Planning 9 Hour

Virtualization Technologies, Abstraction versus Virtualization, Load Balancing and

Virtualization, The Google Cloud, Hypervisors, Virtual Machine Imaging, Porting
Applications, Capacity Planning
 21CSE362T - CLOUD COMPUTING (PE)

Unit-5 - Cloud Computing Applications 9 Hour

Web Services: Amazon, Microsoft, Google, Case Studies, Cloud as Infrastructure for

an Internet Data Center (IDC), Cloud Computing for Software Parks, Enterprise

with Multiple Data Centers

 Fundamentals of Cloud Computing

 Cloud Computing is the delivery of computing services - such as servers, storage,

databases, networking, software, analytics, and intelligence over the internet (“the

cloud”) to offer faster innovation, flexible resources, and economies of scale.

 Instead of owning and maintaining physical hardware or data centers,

organizations and individuals can access computing resources on demand, paying

only for what they use.

 Fundamentals of Cloud Computing
Key Features of Cloud Computing:

 On-Demand Self-Service: Users can provision resources like storage and processing power without
requiring human intervention.

 Broad Network Access: Services are accessible over the internet from a wide range of devices.

 Resource Pooling: Providers pool their resources to serve multiple customers, with resources dynamically
assigned based on demand.

 Scalability: Resources can be scaled up or down quickly based on need.

 Measured Service: Resource usage is monitored, controlled, and reported, ensuring transparency for both the
provider and consumer.
 Fundamentals of Cloud Computing
Types of Cloud Services:

1. Infrastructure as a Service (IaaS): Provides basic computing infrastructure like virtual

machines and storage (e.g., AWS EC2, Google Compute Engine).

2. Platform as a Service (PaaS): Offers a platform for building, testing, and deploying

applications (e.g., Microsoft Azure, Google App Engine).

3. Software as a Service (SaaS): Delivers fully functional applications over the internet

(e.g., Gmail, Dropbox).

 Fundamentals of Cloud Computing
Types of Cloud Deployment Models:

1. Public Cloud: Services are provided over the internet and shared among multiple

organizations (e.g., Amazon AWS, Microsoft Azure).

2. Private Cloud: Services are used exclusively by one organization, often hosted on-

premises or by a third party.

3. Hybrid Cloud: Combines public and private clouds, enabling data and applications to be

shared between them.

 Types of Cloud Deployment Models
Public Cloud:

1. Services are provided over the internet and shared among multiple organizations (e.g., Amazon AWS,
Microsoft Azure).
2. The servers, Storage, and applications—are delivered over the internet and shared among multiple users or
organizations.
3. Public clouds are owned and managed by third-party cloud service providers, making them cost-effective.
Key Features of a Public Cloud:
1. Shared Resources: Resources are shared among multiple users or organizations.
2. Cost-Effective: Users pay only for what they use, eliminating the need for costly hardware and
maintenance.
3. Scalability: Resources can be scaled up or down as needed.
4. Accessibility: Accessible over the internet from anywhere with an internet connection.
5. Managed by Providers: The cloud provider handles maintenance, updates, and security.
 Types of Cloud Deployment Models
Public Cloud:
Examples Public Cloud:
1. Amazon Web Services (AWS): Offers a wide range of services, including computing (EC2), storage (S3), and
databases (RDS).
2. Microsoft Azure: Provides services for App Development, Data Storage, and Machine Learning.
3. Google Cloud Platform (GCP): Includes services like Google Compute Engine, BigQuery, and Kubernetes
Engine.
4. Dropbox: A file storage and sharing platform based on public cloud infrastructure.
5. Salesforce: A cloud-based Customer Relationship Management (CRM) platform.
Example Use Case:
***A startup building a web application might use AWS to host its servers (EC2), store data (S3), and manage
databases (RDS).
This approach avoids the upfront costs of buying hardware and allows the startup to scale resources as user demand
grows.
 Types of Cloud Deployment Models
Private Cloud:
 A private cloud is a cloud computing model where the infrastructure, resources, and services are dedicated to a
single organization.
 Unlike the public cloud, a private cloud is not shared with other organizations, offering greater control,
security, and customization.
Key Features of a Private Cloud:
1. Dedicated Resources: Exclusively used by one organization.
2. Enhanced Security: Provides higher levels of data protection and compliance.
3. Customizability: Tailored to meet the specific needs of the organization.
4. On-Premises or Hosted: Can be hosted on-site by the organization or managed by a third-party service provider.
5. Scalability: Can scale resources as needed but may require significant investment in hardware and maintenance.
 Types of Cloud Deployment Models

Private Cloud:
Examples of Private Cloud:
1. VMware vSphere: A popular private cloud solution for building and managing virtualized data centers.
2. OpenStack: An open-source platform for creating and managing private clouds.
3. Microsoft Azure Stack: Extends Azure services to on-premises private cloud infrastructure.
4. IBM Cloud Private: A private cloud platform optimized for enterprise workloads.
Example Use Case:
***A large financial institution might deploy a private cloud on-premises using VMware vSphere to host
sensitive customer data and critical banking applications.
This setup ensures compliance with regulations, enhances data security, and allows for tight control over IT
resources while offering the flexibility of cloud services.
 Types of Cloud Deployment Models
Hybrid Cloud:
 A hybrid cloud is a cloud computing model that combines both private cloud and public cloud
environments, allowing data and applications to be shared between them.
 This approach offers the flexibility of public clouds and the control and security of private clouds,
making it a versatile solution for organizations with diverse workloads.
Key Features of a Hybrid Cloud:
1. Flexibility: Combines the best aspects of private and public clouds.
2. Scalability: Public cloud resources can be used to handle spikes in demand.
3. Cost Efficiency: Keeps sensitive workloads in the private cloud while using public cloud resources for
less critical tasks.
4. Interoperability: Enables seamless integration between on-premises infrastructure and cloud services.
 Types of Cloud Deployment Models
Hybrid Cloud:
Examples of Hybrid Cloud Platforms:
1. Microsoft Azure Hybrid: Connects Azure public cloud services with on-premises infrastructure
using Azure Arc or Azure Stack.
2. AWS Outposts: Extends AWS services to on-premises data centers for a hybrid solution.
3. Google Anthos: Manages applications across public clouds and on-premises environments.
4. IBM Cloud Pak: A suite of tools for building hybrid cloud environments.
 Types of Cloud Deployment Models
Hybrid Cloud:
Example Use Case:
 A Retail Company might use a hybrid cloud setup to manage its e-commerce platform. Sensitive
customer data, such as payment details, is stored in a private cloud to meet compliance and
security requirements.
 At the same time, public cloud resources like AWS are used to handle seasonal traffic spikes during
sales events, ensuring scalability and cost-effectiveness.
 This model provides the organization with secure data handling and the ability to scale resources
dynamically based on demand.
 Types of Cloud Deployment Models

Community Cloud:
 A community cloud is a cloud computing model where infrastructure, resources, and services are shared

by a specific group of organizations with common interests, goals, or regulatory requirements.

 The community members jointly own, manage, and benefit from the shared resources, making it suitable

for collaborative projects or industries with strict compliance needs.

 Types of Cloud Deployment Models
Community Cloud:
Key Features of a Community Cloud:

1. Shared Infrastructure: Resources are shared among multiple organizations within a community.

2. Collaborative Management: Managed collectively by the community or a third-party provider.

3. Specific Use Cases: Designed to meet the shared needs of a particular group, such as compliance, security,

or data governance.

4. Cost Sharing: Costs are distributed among the participating organizations.

 Types of Cloud Deployment Models
Community Cloud:
Examples of Community Cloud:

1. Healthcare Community Cloud: Used by hospitals, clinics, and research institutions to share patient data

securely while complying with regulations like HIPAA.

2. Government Community Cloud: Local, state, and federal agencies share a cloud to handle sensitive data

with compliance to government standards.

3. Academic Research Community Cloud: Universities collaborate on a shared cloud to pool resources for

large-scale research projects.

 Types of Cloud Deployment Models
Community Cloud:
Example Use Case:

 A group of universities in different regions collaborates on climate research. They establish a community

cloud where researchers share computing resources, data storage, and analytical tools.

 This setup ensures data security, cost efficiency, and standardized access for all participating institutions

while enabling large-scale data analysis and collaboration.

 Such a cloud fosters innovation while ensuring compliance with academic and data-sharing regulations.
 21CSE362T - CLOUD COMPUTING (PE)
Characteristics of Cloud Computing

Cloud computing has several key characteristics that define its nature and functionality.

1. On-Demand Self-Service:

Users can provision computing resources (e.g., storage, servers, or applications) as

needed, without requiring human intervention from the service provider.

Example: A developer can spin up a virtual machine using a web interface or API.
 21CSE362T - CLOUD COMPUTING (PE)
Characteristics of Cloud Computing

2. Broad Network Access:

Services are accessible over the internet from a variety of devices, including
smartphones, tablets, laptops, and desktop computers. This ensures flexibility and remote
accessibility.
3. Resource Pooling:
Cloud providers pool their resources (e.g., storage, processing power) to serve
multiple customers using a multi-tenant model. Resources are dynamically assigned and
reassigned according to user demand, with the underlying infrastructure being abstracted
from users.
 21CSE362T - CLOUD COMPUTING (PE)
Characteristics of Cloud Computing

4. Rapid Elasticity:
Cloud resources can scale up or down quickly to meet changing demands. This
elasticity ensures that users only pay for the resources they need and that they have the
capacity when demand spikes.
Example: E-commerce platforms scaling up resources during a holiday sale.
5. Measured Service:
Resource usage is monitored, controlled, and reported by the provider, ensuring
transparency. Users are typically billed based on their usage, such as per-hour billing for
virtual machines or per-gigabyte billing for storage.
 21CSE362T - CLOUD COMPUTING (PE)
Characteristics of Cloud Computing

6. High Availability and Reliability:

Cloud providers often use multiple data centers and redundancy mechanisms to
ensure high uptime and reliability. Most providers offer Service Level Agreements (SLAs)
guaranteeing specific levels of availability.
7. Cost Efficiency:
Users pay only for the resources they use (pay-as-you-go model), reducing the need
for large upfront capital investments in IT infrastructure. Operational costs are predictable
and scalable.
 21CSE362T - CLOUD COMPUTING (PE)
Characteristics of Cloud Computing

8. Multi-Tenancy:
Multiple users (tenants) share the same physical infrastructure while maintaining data
isolation and security. This allows for efficient utilization of resources.
9. Automation:
Many cloud services are automated, enabling faster provisioning and scaling without manual
intervention. Automation reduces deployment times and operational overhead.
10. Security:
Cloud providers implement robust security measures, including encryption, access controls,
and compliance with industry standards. However, users also share responsibility for securing their
own applications and data.
 21CSE362T - CLOUD COMPUTING

Benefits and Disadvantages of Cloud Systems

 Benefits and Disadvantages of Cloud Systems

Benefits of Cloud Systems:

1. Cost Efficiency
 Eliminates the need for upfront investment in hardware and reduces maintenance costs.
 Pay-as-you-go pricing models make it flexible for businesses of all sizes.

2. Scalability and Flexibility

 Easily scale resources up or down based on demand.
 Ideal for businesses with fluctuating workloads.

3. Accessibility and Collaboration

 Access data and applications from anywhere with an internet connection.
 Enhances teamwork by enabling real-time collaboration on shared files.
 Benefits and Disadvantages of Cloud Systems

Benefits of Cloud Systems:

4. Disaster Recovery and Backup

 Simplified data backup and recovery processes.
 Built-in redundancy helps protect against data loss.
5. Security Enhancements
 Leading cloud providers invest heavily in security measures like encryption and multi-factor
authentication.
 Regular security updates are managed by the provider.
6. Faster Deployment
 Quickly deploy applications and updates without hardware constraints.
7. Innovation and Updates
 Access to the latest technologies and software without needing manual upgrades.
 Benefits and Disadvantages of Cloud Systems

Disadvantages of Cloud Systems:

1. Dependency on Internet Connectivity
 Requires stable internet access; disruptions can affect productivity.
2. Potential Security Risks
 Despite advanced security measures, data breaches and unauthorized access remain concerns.
 Sharing sensitive data with third-party providers can raise compliance issues.
3. Limited Control
 Users have limited control over the infrastructure and underlying technologies managed by the provider.
4. Cost Overruns
 Mismanagement of resources or unexpected usage can lead to higher bills.
 Benefits and Disadvantages of Cloud Systems

Disadvantages of Cloud Systems:

1. Data Privacy Concerns
 Jurisdictional issues regarding data storage locations may conflict with privacy regulations.
 Risk of vendor misuse or insufficient adherence to legal standards.
2. Downtime Risks
 Outages or service disruptions at the provider's end can halt operations temporarily.
3. Vendor Lock-In
 Switching providers can be complex and costly due to proprietary systems and data compatibility issues.
4. Performance Variability
 Shared resources in public cloud environments can lead to inconsistent performance during peak usage.
21CSE362T - CLOUD COMPUTING

Assessing the Value Proposition

 Assessing the Value Proposition
 The value proposition of cloud computing lies in its ability to deliver scalable, cost-effective, and
innovative solutions for diverse business needs.
 However, organizations must evaluate their specific requirements, potential risks, and long-term
goals to fully leverage its benefits.
 The Assessment of its value proposition are given below-

1 Cost Efficiency 5 Security and Compliance

2 Scalability and Flexibility 6 Business Continuity
3 Speed and Innovation 7 Vendor Lock-In
4 Accessibility and Collaboration 8 Environmental Impact
 Assessing the Value Proposition
1. Cost Efficiency
Pros:
 Eliminates the need for capital expenditure on hardware and infrastructure.
 Pay-as-you-go models allow businesses to scale resources based on actual needs.
 Reduced maintenance and operational costs.

Cons:
 Unexpected spikes in usage can lead to higher-than-anticipated costs.
 Long-term cloud costs may exceed on-premises solutions for certain workloads.
 Assessing the Value Proposition
2. Scalability and Flexibility
Pros:
 Easily scale resources up or down to meet fluctuating demands.
 Facilitates global expansion with access to resources in multiple regions.
Cons:
 Rapid scaling requires careful management to avoid inefficiencies.
 Assessing the Value Proposition
3. Speed and Innovation
Pros:
 Faster deployment of applications and services.
 Accelerates innovation by providing access to advanced tools (e.g., AI, machine learning, IoT).

Cons:
 Learning curves for adopting new technologies can slow initial deployment.
 Assessing the Value Proposition
4. Accessibility and Collaboration
Pros:
 Remote access enables employees to work from anywhere.
 Enhances collaboration through real-time file sharing and editing.

Cons:
 Dependence on internet connectivity can hinder productivity during outages.
 Assessing the Value Proposition
5. Security and Compliance
Pros:
 Cloud providers invest heavily in advanced security measures.
 Offers features like encryption, access controls, and regular updates.

Cons:
 Security risks exist, including data breaches and insider threats.
 Compliance with regulations (e.g., GDPR, HIPAA) may require additional effort.
 Assessing the Value Proposition
6. Business Continuity
Pros:
 Simplifies disaster recovery with automatic backups and data replication.
 Ensures high availability and redundancy for mission-critical applications.

Cons:
 Dependence on a single cloud provider could pose risks in case of service disruptions.
 Assessing the Value Proposition
7. Vendor Lock-In
Cons:
 Migrating workloads between providers can be complex and expensive.
 Proprietary technologies can limit flexibility.
 Assessing the Value Proposition
8. Environmental Impact
Pros:
 Optimized resource usage leads to lower energy consumption compared to traditional data
centers.
 Providers increasingly adopt renewable energy sources.
Cons:
 Large-scale data centers still contribute to environmental concerns.
Measuring the Cloud’s Value
 Measuring the Cloud’s Value

 Measuring the value of cloud computing involves evaluating its tangible and intangible
benefits for businesses, organizations, or individuals.
 The value of the cloud is multi-dimensional and extends beyond cost savings.
 It supports agility, innovation, and growth while enabling organizations to stay
competitive in a fast-paced digital environment.
 To maximize cloud value, businesses should regularly assess their –
 Cloud strategy
 Optimize resource utilization, and
 Align cloud investments with their overall goals.
 Measuring the Cloud’s Value
The key aspects and metrics to measure the value of the cloud:
1. Financial Metrics
2. Operational Metrics
3. Productivity Gains
4. Flexibility and Innovation
5. Security and Compliance
6. Environmental Impact
7. Business-Specific Metrics
 Measuring the Cloud’s Value
Financial Metrics:
a) Cost Savings:
 CAPEX to OPEX Shift: Transitioning from capital expenditures (e.g., purchasing servers) to
operational expenses (e.g., pay-as-you-go services).
 Reduced IT Maintenance Costs: Elimination of hardware upgrades, repairs, and on-premises data
center costs.
b) Total Cost of Ownership (TCO):
 Compare the costs of running an on-premises solution versus a cloud solution, including
infrastructure, energy, staffing, and software licensing.
c) Return on Investment (ROI):
 Measure the profitability derived from cloud adoption. For example:

d) Pay-as-you-Go Flexibility:
 Avoid over-provisioning and pay only for the resources used.
 Measuring the Cloud’s Value
Operational Metrics:
a) Scalability:
 Measure the ability to handle increased workloads without degradation in performance.
 Example: Vertical (more resources per machine) and horizontal (more machines)
scalability.
b) Performance Improvements:
 Reduced latency, faster application deployment, and improved response times.
c) System Uptime:
 Cloud Service Level Agreements (SLAs) often guarantee 99.9% or higher uptime.
d) Time-to-Market:
 Faster deployment of applications and services using cloud platforms like AWS, Azure, or
GCP.
 Measuring the Cloud’s Value
Productivity Gains:
a) Increased Developer Efficiency:
 Access to pre-built tools, frameworks, and APIs reduces the time spent on development
and testing.
b) Collaboration:
 Real-time collaboration tools (e.g., Google Workspace, Microsoft 365) enhance team
productivity.
c) Automation:
 Automation of repetitive tasks such as backups, software updates, and scaling.
 Measuring the Cloud’s Value
Flexibility and Innovation:
a) Flexibility: Ability to adapt quickly to changing business needs with dynamic provisioning
and de-provisioning of resources.
b) Support for Innovation: Access to cutting-edge technologies like AI, machine learning, IoT,
and analytics without upfront investment.
c) Global Reach: Leverage cloud regions worldwide to deploy applications closer to end-users.
 Measuring the Cloud’s Value
Business Continuity and Security:

 Disaster Recovery (DR): Cloud platforms offer robust disaster recovery options,

ensuring minimal downtime and data loss during outages.

 Data Security: Cloud providers invest heavily in security measures, often exceeding

what smaller organizations can afford on-premises.

 Compliance: Many cloud providers support compliance with industry standards and

regulations, adding value by reducing legal and reputational risks.

 Measuring the Cloud’s Value
Innovation Enablement:

 Access to Cutting-Edge Technologies: The cloud provides access to advanced

technologies such as AI/ML, IoT, and big data analytics, fostering innovation.

 Experimentation: Cloud environments allow businesses to experiment with new ideas

with minimal upfront cost, supporting a fail-fast, learn-fast approach.

 Measuring the Cloud’s Value
Workforce Productivity:

 Collaboration Tools: The cloud enables real-time collaboration through platforms like

Microsoft 365, Google Workspace, and others.

 Remote Work Enablement: The cloud provides seamless access to resources from

anywhere, enhancing workforce flexibility and productivity.

 Measuring the Cloud’s Value
Sustainability and Green Computing:

 Energy Efficiency: Cloud data centers are often optimized for energy efficiency,

contributing to sustainability goals.

 Reduced Carbon Footprint: By consolidating workloads into highly efficient cloud

environments, organizations can significantly reduce their carbon emissions.

 Measuring the Cloud’s Value
Business Metrics and Key Performance Indicators (KPIs)

 Revenue Growth: Cloud adoption can drive revenue growth by enabling faster delivery

of customer-facing applications and services.

 Customer Satisfaction: Improved performance, scalability, and availability contribute

to higher customer satisfaction.

 Employee Satisfaction: Simplified workflows and modern tools increase employee

morale and retention.

 Challenges in Measuring Value
While measuring the cloud’s value is essential, it is not without challenges:

 Complexity in Calculations: Accurately calculating TCO and ROI can be complex due

to varying usage patterns and costs.

 Hidden Costs: Factors like data transfer fees, underutilized resources, and unoptimized

services may inflate costs.

 Quantifying Intangibles: Metrics like innovation, employee satisfaction, and

competitive advantage are hard to quantify.

Capital Expenditures
 Capital Expenditures

 In traditional IT infrastructure, capital expenditures (CapEx) refer to the upfront costs

incurred to acquire or upgrade physical assets such as servers, data centers, and

networking equipment.

 In the context of cloud computing, CapEx plays a somewhat different role, as the cloud

computing model is designed to reduce these costs significantly by shifting expenses

toward operational expenditures (OpEx).

 Capital Expenditures

Understanding CapEx in Cloud Computing:

 The Cloud Computing typically minimizes capital expenditure, it doesn't eliminate it

entirely.

 The impact of CapEx depends on the specific cloud deployment model – Public Cloud,

Private Cloud, Hybrid Cloud and On-Premises Cloud-like solutions.

 Capital Expenditures

Understanding CapEx in Cloud Computing:

1. Public Cloud:

 Public cloud providers like AWS, Azure, or Google Cloud own and manage the

infrastructure.

 Customers incur little to no CapEx because they don't purchase or maintain physical

assets.

 Instead, expenses are based on a pay-as-you-go or subscription model, shifting costs to

OpEx.
 Capital Expenditures

Understanding CapEx in Cloud Computing:

2. Private Cloud:

 Organizations may set up a private cloud within their own on-premises data center or in

a co-located facility.

 Significant CapEx is required to purchase servers, storage, networking equipment, and

virtualization technologies.

 Over time, operational costs will also accrue, similar to traditional IT infrastructure.
 Capital Expenditures

Understanding CapEx in Cloud Computing:

3. Hybrid Cloud:

 A hybrid cloud combines private and public cloud infrastructure.

 Organizations incur CapEx for the private cloud portion while leveraging the OpEx

model for the public cloud portion.

 Capital Expenditures

Understanding CapEx in Cloud Computing:

4. On-Premises Cloud-Like Solutions:

 Solutions such as AWS Outposts or Azure Stack allow businesses to run cloud services

on their premises, requiring some initial CapEx for hardware and setup.
 Capital Expenditures

CapEx in Cloud Computing Context:

1. Data Center Build-Out: For organizations building private clouds, CapEx includes
purchasing land, constructing data center facilities, and acquiring hardware.
2. Hardware Costs: Servers, storage devices, and network equipment required for on-
premises or private cloud deployments.
3. Virtualization Technology: Licensing fees for hypervisors or management tools to
virtualize resources in private cloud setups.
4. Backup and Redundancy: Investment in failover systems, disaster recovery hardware,
and redundant power supplies.
Total Cost of Ownership
(TCO)
 Total Cost of Ownership (TCO)

 Total Cost of Ownership (TCO) is a financial metric that calculates the total cost of

using, managing, and maintaining IT infrastructure over its entire lifecycle.

 The TCO provides a comprehensive understanding of the costs associated with

running workloads in the cloud compared to traditional on-premises infrastructure.

 Measuring TCO in cloud computing helps organizations determine whether migrating

to the cloud is financially beneficial while also identifying opportunities for cost

optimization.
 Total Cost of Ownership (TCO)

Components of TCO in Cloud Computing:

1. Direct Costs

2. Indirect Costs

3. Operational Costs

4. Hidden Costs
 Total Cost of Ownership (TCO)
1. DIRECT COSTS:

These are costs directly attributable to cloud usage, which vary based on the deployment model (public, private, or

hybrid cloud).

 Compute Costs: Charges for virtual machines (VMs), containers, or serverless compute functions based on

usage.

 Storage Costs: Costs for data storage (e.g., object storage, block storage) and associated backups.

 Networking Costs: Data transfer charges, including ingress (incoming) and egress (outgoing) data.

 Licensing Fees: Software licensing costs for databases, operating systems, or other applications hosted in the

cloud.

 Cloud Provider Services: Fees for additional services like monitoring, AI/ML tools, or content delivery

networks (CDNs).
 Total Cost of Ownership (TCO)

2. INDIRECT COSTS:

These are additional costs that result from operating and managing workloads in the cloud.

 Migration Costs: Costs related to moving applications, data, and workloads from on-premises

to the cloud.

 Training Costs: Expenses for upskilling employees to use cloud platforms effectively.

 Third-Party Tools: Costs of third-party solutions integrated with the cloud for monitoring,

security, or automation.

 Optimization and Management: Ongoing costs for resource optimization, governance, and

infrastructure management.
 Total Cost of Ownership (TCO)

3. OPERATIONAL COSTS:

 Scaling and Elasticity: Costs associated with dynamically scaling resources to meet

demand.

 Support Costs: Fees for technical support from the cloud provider.

 Downtime: Potential costs incurred due to service outages or disruptions, especially

for mission-critical applications.

 Total Cost of Ownership (TCO)

3. HIDDEN COSTS:

 Idle Resources: Costs incurred from underutilized or idle cloud resources, such as

VMs left running unnecessarily.

 Data Transfer Costs: Unexpected costs related to moving large volumes of data

between regions or services.

 Vendor Lock-In: Long-term costs of relying on a single cloud provider, limiting

flexibility.
 Total Cost of Ownership (TCO)

Cloud TCO Optimization Strategies:

 Right-Sizing Resources: Ensure that resources are provisioned appropriately for the workload to
minimize waste.
 Leverage Reserved Instances: Use reserved or savings plans to reduce costs for predictable
workloads.
 Optimize Data Storage: Use tiered storage (e.g., archival or cold storage) for infrequently
accessed data.
 Monitor Usage: Continuously monitor and analyze cloud resource usage to identify and eliminate
inefficiencies.
 Automation: Automate tasks such as scaling, shutdown of unused resources, and backups to
optimize costs.
Service Level Agreement (SLA)
 Service Level Agreement (SLA)

A Service Level Agreement (SLA):

 The SLA is a formal contract between a Cloud Service Provider (CSP) and a Customer that

defines the performance standards, availability, responsibilities, and terms of service.

 The SLA ensures transparency and sets expectations for both parties, providing guidelines for

what the customer can expect in terms of service quality and what happens if those expectations

are not met.

 SLAs are critical in cloud computing because they ensure reliability, accountability, and trust

between customers and service providers.

 Service Level Agreement (SLA)
Key Components of an SLA in Cloud Computing

1. Service Availability and Uptime.

2. Performance Metrics

3. Incident Management

4. Data Security and Privacy

5. Backup and Disaster Recovery

6. Penalties for SLA Breaches

7. Exclusions

8. Monitoring and Reporting

9. Termination Conditions
 Service Level Agreement (SLA)

Key Components of an SLA in Cloud Computing