e Commerce Cloud Computing e-commerce e-commerce

A panorama of

e-Commerce or

e-business in

Cloud

Computing

Project Report for

MHY 508E

Contents

Contents ...2

Literature Review (about 8-10 pages) ...6

Research Question & Methodology (about one – two pages) ... 15

Abstract

(About 100-150 words)

Introduction

Over a decade ago we all take our files and business documents in floppy disk and

then pen drives or flash disk but now a good number of businesses now keep those vitals in

the “cloud”. Cloud here means a set of networked Computing resources that are available for

customers to interact with or modify or collaborate irrespective of the geographical location of

all the parties involved and in real time. The present cloud could be described by its

connection with old or existing computing networks or Internet which includes among more

evolving technological gadgets and basically network computing, grid computing, utility

computing, pervasive computing, and service computing (Lin et al, 2012; Voas & Zhang,

2009)

Cloud Computing provides a type of “electricity grid” paradigm where users or

consumers have access to a variety of computing services for businesses and where the

computing power of computers are of economic benefits. The grid paradigm that is been

followed is like the access to electricity in our homes. We have access to the cloud like “pay

as you go/use” Cloud Computing promises the delivery of IT or IS services just a we need it

and it will reduce the Infrastructure cost particularly for Small and Medium-sized Enterprises

(SMEs).

This high expanding phenomenon and technology from Amazon EC2 and Google’s

Google Compute Engine as some examples of the examples of Cloud Computing services of

Infrastructure as a Service (IaaS) to Microsoft Azure and other examples of Software as a

Service (SaaS) like Microsoft Office 365, Salesforce.com CRM, Gmail, Amazon S3,

DropBox, and Facebook are continuously evolving. One of the promise of Cloud Computing

is to deliver almost in a better way with Application Program Interface (API) on the web all

The emerging Cloud services and its business perspective is increasingly gaining

research works from both the academic world and Business circles but more to it is the

Infrastructure as a Service (IaaS), Software as a Service (SaaS) and Platform as a Service

(PaaS) and other Internet Based Service (IBS). These service models are giving rise to

Business models in the “Cloud” which as whole provides high cost benefits to SMEs and

upcoming e-Commerce businesses (Rajkumar et al., 2009; Marston et al., 2011). With these

facts and issues in mind we do some analysis on the effect on e-business and or e-commerce

emerging firms with the profits involved, threats to survival and opportunities for the future.

1.1

Cloud Computing

–

Definitions

Cloud computing in itself have also undergone a lot of definitions; (JUN and WEI

2011) defined it as a sort of development of Distributed Computing, Parallel Computing, Grid

Computing, which is a super calculating model based on Internet. In a remote data center,

thousands of computers and servers connected to a computer cloud. The definition of cloud

computing is that cloud computing distributes computing tasks into a large number of

resources pools of computer constitute, making different application system according to the

requirements to acquire computing power, storage space and all kinds of software service.

(Vaquero et al. 2009) define it as “a large pool of easily usable and accessible virtualized

resources (such as hardware, development platforms and/or services). These resources can be

dynamically reconfigured to adjust to a variable load (scale), allowing also for an optimum

resource utilization. This pool of resources is typically exploited by a pay-per-use model in

which guarantees are offered by the Infrastructure Provider by means of customized Service

Level Agreements”.

In summary and from reviews of researchers we could quote that Cloud computing has

process so that we have an evolution of everything as a Utility and a utility business model.

This utility business model does have computing capabilities or resources or a general

purpose type technology that employs greatly the tools of web 2.0 and web 3.0 capabilities to

produce application across the Internet for use of several users, firms, SME and corporation in

Literature Review

(about 8-10 pages)

2.1

Features and Implication of Cloud Computing on e-commerce and or

e-business

The last 15 years has shown a tremendous increase in both Internet users and

Internet-enabled devices which in turn created the boom of e-commerce and e-business with high-level

of traffic and profit been generated the arrival of Cloud Computing. Cloud Computing is

basically a parallel and distributed computing that are Internet-enable and dynamically

connected real-time to provide all sort of IT services ranging from Software, hardware, Web

2.0 Interfaces, Social Commerce tools that will greatly enhance e-commerce. A simple

example is the Digital versions of all our entertainment Industry contents are already on the

“cloud” as provided as a service by Amazon Web Services.

The basic characteristics of cloud computing are based on existing computing systems

like grid computing, and other online real-time computing that is produces but mostly these

does not include normally Private Clouds. Private Clouds are usually computing

Infrastructure that is available for specifics organization or firms.

2.2

The key advantages of cloud computing for e-commerce

Cloud computing could facilitates e-commerce's Peer-to-peer (P2P) lending. Since the

cloud is available for data resources and analysis from different vendors of providers;

borrowers and lenders could use cloud to do resources analysis even before the final deal is

made. The analysis involves could produce graphs and summary of future results or financial

analysis of the business. Since Cloud computing runs across different domains and platform

then we could have more analysis that will make these types of results to be good and

2.3

The Innovation model for e-commerce over Cloud

Since e-commerce over cloud computing (eCoCC) follows a technology mode or

pattern of M-commerce and Ubiquitous-commerce as shown in (Wu and Hisa 2004), we

proposed a model where we use the hypercube innovation model as shown in Fig. 1 .

Innovation like cloud computing and emerging enabling technologies will continuously and to

great extent positively have impact on e-commerce. The use of cloud computing not only

increase mobility of users parameters as goods, services but it increases sales like the case of

Amazon. The model evolving from Fig. 1 shows three dimensions with Change in Business

Model, Change in Core Components and Stakeholders. We proposed an upgraded functional

block of Provider as Cloud Providers and or a merger of Provider and E-commerce Company.

Core Components of Cloud for e-commerce like SaaS and PaaS have definite

functions that can be offered to e-commerce applications use and financial forecasting

capabilities. The change in Business model is closely related cloud services components and Fig. 1.The E-commerce over Cloud Computing hypercube innovation model (adapted from Wu and Hisa 2004)

We propose a model where this block is called “Cloud

Providers or a merger of E-commerce Company +

the whole e-commerce business. The changes that have occurred in cloud computing as stated

by (Svantesson and Clarke 2010, Buyya et. al. 2009, Marston et. al. 2011) are of good level in

security, deployment and services that the Innovation is of continual process and this has

generated a good reason for an Innovation model. This Innovation model should not only

possess the capabilities of old commerce but of emerging e-commerce and there are

opportunities that abound like small businesses exploiting high-end applications like ERP

software or business analytics from SaaS that were not available before the advent of this

technology.

2.4

The key architectures for e-commerce over Cloud

Electronic commerce over Cloud Computing(eCoCC) do help in the limitations of

mobile terminals issues with data processing since the users can easily connect to a wide

range of Infrastructure over the Cloud services. The e-commerce operator or user obtains the

computing resource on an on-demand basis and of a high scalability. (Sultan 2011). There

exist in cloud as shown in Fig. 2, a high volume of data storage and processing power and

this is a prove that a parameter measure of ROI in the eCoCC will yield positive result at the

long-run. Nevertheless, numerical analysis needs to be done to show the level or rate of ROI

and so on. The key architecture as noted by (Lackermair 2011) uses Fig 3 and 4 to classify the

e-commerce over cloud computing (eCoCC) as model with respect to an online shopping as

an example where there are specific module of Infrastructure, Platform and Service

2.5

Commercial system for cloud computing

With Google and a number of clouds serving different needs; we could tell of Google

Apps. It is to be noted that this Google Apps is not to be confused with “Google App Engine”

Fig. 3. A high-level system architecture of an online retailer (Lackermair 2011)

which is a Web development environment. But this is a collection of Web-based applications

and file storage that run in a Web browser. The applications include communication tools

(e.g., Gmail, Google Talk, and Google Calendar) and productivity tools (e.g., Google Docs:

text files, spreadsheets, and presentations). Google Apps makes content-sharing simple and

facilitates collaboration and collective generation of knowledge (Sultan, 2011). This tool

could be used in e-commerce not just for collaboration between B2B and also B2C.

Cloud computing is being implemented successfully on a commercial basis and can

easily be used by e-commerce SMEs to make system customization faster and with great

length and time gained. A good example is the Amazon’s Elastic Compute Cloud (EC2) which

can allows e-commerce operators as in B2B or B2C to use Web service interfaces in a virtual

environment with different types of operating systems. These Interfaces could be loaded with

operators' specific applications and then be used to also mange access levels to services or

networks or servers (Marston et. al. 2011).

With the advent of "green" technologies, e-commerce operator will do better to use

Cloud computing by not setting up Infrastructures of different levels. Researchers have quoted

that over 41 percent of IT staffs believe the energy consumptions of back-end servers and

network equipment are high. On this lies the motivation that recycling or the use of cloud will

be of high importance (Marston et. al. 2011, Doong and Ho 2012).

In Fig. 2., a simple representation of the mode that could be used for e-commerce at

different levels of service. As stated earlier, PaaS, SaaS, and IaaS has a huge impact on the

success of the emerging SME e-commerce or e-business to survive with a concise budget. The

Data Center is owned by different vendors or the same vendor of cloud provider in another

see combines different cloud computing services and integrates them into a single service or

application. Amazon's GrepTheWeb is a good example for cloud computing service

compositions within the domain of a single provider (Sultan 2011).

2.6

Cloud Computing as a component of general purpose technology in

e-commerce

As the Mobile has been a Game Changer just as predicted we will have Cloud

Computing to change more the game in e-commerce since the mobility is increase and

enhanced with Cloud computing. As analysts have done their predictions, 2011 was indeed

The Year of Mobile. Not only did mobile sales increase dramatically, with US$6.7 billion in

accelerating online and in-store purchases on the customer’s terms. Mobile has also served as

a catalyst for cross-channel integration. With consumers using mobile Websites and apps in

tandem with other touchpoints, 41 percent of the respondents from online organizations plan

to invest more resources on the front end of mobile user experiences and integrate mobile

with their back-end technology. The success of mobile has not only encouraged organizations

to continue investing in it in 2012 but has also led them to ratchet it up by hiring more

employees with mobile skills and building on existing programs to find new ways to engage

connected consumers. The take-away is that there is a high correlation between mobility and

Cloud computing technology and the success of one is directly proportional to the other. The

use of Cloud technologies will enhance more e-commerce.

2.7

e-commerce over cloud computing

–

a

Strength-Weakness-Opportunity-Threats(SWOT) analysis

Since in an e-commerce over Cloud-based business model, users or operators

will/could pay service/resource providers for consumption of their computing capabilities

similar to the way that basic utilities such as electricity, gas, and water are charged, this is sort

of a win-win or the other way. Then, there exists some level of a market-oriented approach for

managing Cloud resources that is necessary for regulating their supply and demand through

flexible and dynamic pricing. This pricing will engage not only providers or operators but also

to a good extent customers need to get involved so as to produce a more robust structure (Wu

and Wang 2005, Marston et. al. 2011, Doong and Ho 2012).

The concerns and challenges of adopting this new technology may spans from and not

limited as

a) Security issues with respect to users’ or accounting data: Since we have marketing data

companies use to operate the e-business. There is a need to strict rules on the security system

for cloud providers. Thankfully Google, Amazon and Microsoft are taking up the challenge

with respect to this issue

b) Fears of the development stage of the technology

c) Privacy and reliability etc.

Service-centric issues of the cloud architecture need to follow a Internet wide

approach so as to involve the e-commerce system to a great extent. This also gives rises to the

next issue which Quality of Service (QoS), Interoperability and Fault-tolerance of the system.

Basically these determine that ability of e-commerce to be able to finally run without errors

on cloud. Fault Tolerance does show that ability or capability of the system to still produce

good results of computing in the presence of errors and once the fault is detected it is isolated

so that it does not become a system wide issue. As stated by (Hahn et al. 2002), there exist

a need for designing Return- on-Investment (ROI) process for every Cloud Computing

Investment done by e-commerce operators.

This creates a need for a disciplined view of the whole system design since intuition

must not just be used for viewing the outcome of Cloud services usage. So just as the

performance of financial investments can be evaluated, the value of systems design, which is

also a new technology investment, also needs to be measured, assessed and managed via an

ROI system or path. Below are some of the processes for acquiring a full knowledge of ROI:

a) Linking consumer behavior and data in the cloud to business performance will produce some ROI measurement.

b) Cloud computing that is integrated in the Web site evaluation and design.

c) Cloud computing enabled Web servers automatically log all client-server interactions and it can be used to check the number of data interactions.

In conclusion, these report shows simply that as technology moves to take over that is

around us like Internet of Things, it does take over all businesses and e-commerce is

definitely leading and not behind in this case. Furthermore and analytically, the thought of the

customer and respective win-win system must be well analyzed before the evolution of

e-commerce over cloud is fully accepted or roll-out.

The economic behavior in Cloud computing over e-commerce includes pricing

systems and methods and among other issues like boundary and services that need to be given

and at what data rate. The data rate are then given at different Service Level Agreement (SLA)

and using different existing pricing policies like a flat fee, a pay-per-use fee, or a two-tier mix

of flat and pay-per-usage fee, then overall cost is reduced.

E-commerce allows companies to link directly to customers; thereby significantly

reducing transaction, labor, promotion, service and inventory costs. For example, General

Electronic (GE) cut $500–$700 million off its purchasing costs and reduced labor costs by

30% and inventory costs by 5–20% by using the Internet over a threyear period. In

e-commerce, the servicing commissions, advertising revenue, and content subscriptions are the

main profit sources compared with bricks-and-mortar stores. These gives also a more robust

ROI view for emerging e-commerce over cloud as all these processes will be made on the

cloud and firm like GE will more reduce Infrastructure cost and increase performance and

profit in the long-run.

More to the profit to be gained by e-commerce over cloud computing are :

 A growing number of tools, technologies, and skill sets, needed, so more job but Human Resources tasks for SME

 Reachability to cloud customers on the go and with high mobility.

 Good users’ experience seen as the largest opportunity to drive additional revenue.

Research Question & Methodology

(about one – two pages)

In the course of the work and research into the work done so far on cloud computing

with e-commerce or e-commerce over cloud computing, there are specifics that need to be

known on this topic so as to have a profitable and viable system. We take on some of them in

this section. Some perspective on this fast evolving Cloud Computing with e-commerce are

but not limited to there are questions that need to be solved so that all parties of e-commerce

and e-business firms will have high benefits and high Return-On-Investment(ROI). The B2B

profit sharing analysis could be another model from the past like EDI or XML, so what will

the new model entails.

• What are the specific profit or cost parameters to measure the ROI and

• What are the basic securities tools that is needed for entering SME to work effectively

and without service disruption? So that they will have sustainability in the new Cloud

Computing with e-business.

• How can we measure ROI effectively

• What are the factors that motivates or otherwise the acceptability of SME in the

e-commerce over cloud computing?

• What are the parameters or tools or system that can be used to encourage or motivate

incoming e-commerce operator or SME to use e-commerce over cloud?

There is need to have a specific guidelines with respect to Service Level

Agreement(SLA) that will work across board for Government, Customers and e-businesses.

Making a constructive case to answer some of these research questions are the only means to

then we will have the full benefits of these technological solutions as “Everything as a Service

(XaaS)”

Fig 6: PROPOSED RESEARCH MODEL FOR eCoCC Actual Use/ACCEPTANCE-

adapted from (Wua and Wanga 2004)

The approach that could be used for the evaluation of the impact of the adoption of

e-commerce over cloud computing is based on macroeconomic theory and macroeconomic data

(Etro 2009a). The methodology to measure the parameters in the research questions ranges

for online surveys and questionnaire for social characteristic like the adoption rate of

e-commerce over cloud by SME or the parameters that motivate the use of e-e-commerce over

cloud. We could use engineering economics to measures the return on Investments (ROI) of

Besides survey and questionnaire, the effect that this innovation has on the cost

structure of the firms investing in e-commerce over Cloud Computing(eCoCC) and

consequently the incentives to create and expand new e-business on macroeconomic

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