As a service (●aaS) via the public cloud

 

The information technology (IT) services are categorised into various levels nowadays. At this time, the business models providing customers and clients with the services via the online connection such as the internet rather than using services only within the on-premises environment. Most notably, there are three categories of services, the software as a service (SaaS), the platform as a service (PaaS), and the infrastructure as a service (IaaS).

Nowadays, many IT service providers offer the subscription service available online rather than the offline purchasing. The notable advantages are agility, availability, and scalability of the resource preparation as well as reliance on the providers for the content and security update and the physical space saving for the physical stuff. The shared access offered by the public cloud is now popular than ever.

The internet connection is not only the online connection option. There is a service called the direct connect connecting users' computer and the server network of the provider located in a remote data centre. The internet connection requires to secure the connection security preventing various incidents such as data breach and information fraud as well as the available IP address allocated to this connection. Then, the direct connect service to the public cloud system is often preferred in order to keep the stable access with an efficient financial cost per use (the internet connection tends to be more expensive for a regular high volume information transaction). For example, there is a movement for various financial institutes to shift their crypto asset management from the internet connection to the direct connect access to the specialised data centre. 

The most familiar service may be the SaaS because it is convenient for users to start using it. The software is already prepared by the providers so that they can simply use the ready-made application and data by just accessing it. Many companies adopt the Enterprise Resource Planning (ERP) outsourced as subscribing to this service via online instead of purchasing cartridge, CD, or the licence cord offering the software product. The disadvantage is its inflexibility of customisation and modification of applications and data adapted to the users' own requirements and environments.

The PaaS offers a more flexible service for customising and modifying applications and data via the platform composed of the operating system (OS) e.g., Microsoft (MS) Windows, middleware, and runtime is ready. When MS introduced its public cloud service MS Azure, many people thought its compatibility with the commonly distributed OS, the MS Windows, would be high. By contrast, the operation system and its server network architecture may require more flexibility enough to customise their own platform. Then, the IaaS introduced in the next paragraph can be the option.

The IaaS has become popular for the IT engineers to install since Amazon introduced its public cloud service called Amazon Web Service (AWS). The notable benefit is reducing the workloads for maintenance and security update as well as saving space and labour for the physical infrastructure composed of servers, databases, and their network in their on-premises. It is even beneficial to combine the already established on-premises environment and the public cloud services as a hybrid. Another notable useful point is Autoscaling elastically adjusting the volume use by means of its fluctuant demand, which is beneficial not only for the access and service maintenance management but also the financial accounting including the cost calculation and the tax payment. Because AWS was the first pioneer having popularised the public service, this seems to be the main business core of Amazon nowadays. 

In conclusion, considering these characteristics, it is predicted that more businesses will shift their IT basis to this "as a service" due to their convenience and resource scalability. In one of the Bank of England press conferences in 2021, the adoption of the public cloud services by many major private banks was hotly debated. Regardless of its controversy over the national compliance issues, it seems to be the unstoppable inevitable phenomenon across the border in 2020s like the globalisation movement of socio-economy seen in 2000s.

Autoscaling

 * Without Autoscaling: The fixed cost approach

 * With Autoscaling: The variable cost approach

Autoscaling is one of the remarkable advantages of using the public cloud because of its elasticity of the volume usage. This factor is also beneficial by means of the financial accounting.  However, Autoscaling is not that perfect as much as the salespersons from the public cloud providers advertise.  This short essay picks up the typical benefits and challenges of installing the public cloud especially because of its Autoscaling.

Autoscaling is a notable advantage of the public cloud which is usually emphasised in the introductory guideline of the public cloud advertisement. First of all, it allows its users to elastically adjust their quantity usage at each time period, instead of fixing the quality usage, depending on the fluctuant quantity demanded at each time period. This is useful to avoid both the dead-weight of the volume usage while the low access traffic and the volume shortage while the high access traffic.

Focusing on the accounting aspect, it can covert its usage cost to the variable operational cost instead of the capital or fixed-cost = liability. In many cases, it is often advantageous because it is likely to avoid paying the high tax levied onto the capital expenditure. By contrast, the cost covered for the public cloud is often accounted as the variable operational cost which is actually useful to reduce the total tax payment. Regardless of the total cost amount, in many administrative accounting cases, it provides individuals and their firms with the tax payment advantages.

At the same time, Autoscaling does not perfectly work as the textbooks and the introductory guideline of the public cloud explains. In reality, there is a limit of calling for extra instances at once because there is a certain maximum number of the server instances within a certain time period e.g., being able to call 5 instances per minute. There is a physical barrier of scaling the instances depending on each situation.

Furthermore, there is a case that the load balancer misjudges the health check of each connected server instance and the access control. This load balancer can accidentally call unwanted instances by falsely detecting as broken, deleted, or over-capacity or some errors of the monitoring tools and the metric/log information. In addition, there can also be a human error of typing the programmes of directing the traffic control or the security/monitoring setup. This may incur a considerable financial disadvantage of excess instances called by Autoscaling. 

All in all, the Autoscaling mechanism is still an attractive characteristic of using the public cloud to optimise the operational availability as well as the financial efficiency. Nevertheless, it must take an account of the dysfunctions of Autoscaling such as the latency of calling the instances and the extra possible costs caused by both machinery and human errors. On the top of what the salespersons and the textbooks indicate, the users had better refer to the actual experiences of its real application.