Outsourcing Business to Cloud Computing Services-Opportunities and Challenges

The idea of creating and running a business over the Internet is not new. Banks and large manufacturers are among the first in exploiting the electronic network capabilities to conduct business-to-business (B2B) interactions through technologies such as EDI [1]. With the introduction of the Web and the rapid increase of internet users in the early 1990s, companies such as Amazon and eBay were among the early entrants to the business-to-consumer (B2C) model of e-commerce. As the Internet is a fast, easy-to-use and cheap medium which attracts millions of users online at any time, today there are very few businesses that do not have a Web presence, and there are many small and medium businesses (SMBs) such as retail shops that solely offer their services and products online. Looking at the enabling technologies, B2B and B2C e-commerce have benefited from many innovations in the Internet and Web. Moving from static content delivery to dynamic update of page content and the introduction of XML created the first evolution in the path to more efficient and interoperable running of electronic businesses. A main characteristic of using technologies of the Web 1.0 era is that almost all the backend IT systems are created, operated and maintained by the business owners. Motivated by business agility, operational efficiency, cost reduction and improved competitiveness, during the last decade, businesses have taken advantage of business process outsourcing (BPO) [2]. In BPO, businesses delegate some of the company’s non-core business functionality such as IT operations to third-party external entities that specialize in those functions. It is estimated that by 2011 the worldwide market for BPO will reach $677 billion [3]. Up until recently, outsourced services were not necessarily fulfilled online. BPO has become attractive to both large and small businesses with the advent of service oriented computing [15] and specifically Web services and Web 2.0 [5] technologies. This has enabled offering of business process functions as online Web services and actively engaging customers via the Web [4]. It is estimated that BPO represents around 25% of the overall services market

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