CLOUD COMPUTING PRO ET CONTRA

spec. Bratislav Mikari1, master Marija Markovi-Blagojevi2

mr Duan Trajkovi3

Abstract: Cloud computing is an area of computing where IT services (eg. hardware

resources, software, databases, documents, images, videos, services, informations...) are delivered
to consumers via the Internet.
The basic idea of cloud computing consists in the fact that in the future information
technology (IT) will be treated as a service and will be contracted with a provider such as of
telephone, electricity or gas. Users claim that cloud computing allows companies to avoid upfront
infrastructure costs, and focus on projects that differentiate their businesses instead of
infrastructure. Proponents also claim that cloud computing allows enterprises to get their
applications up and running faster, with improved manageability and less maintenance, and
enables IT to more rapidly adjust resources to meet fluctuating and unpredictable business
demand. By applying the technological platforms of Cloud computing, operating systems can be
more innovative, capital and operating costs are lowered, and the need for human resources is
reduced, the use of IT resources is cheaper, and all with the aim of achieving revenue more
quickly, increasing efficiency and flexibility in relation to its competitors. Gmail, YouTube, Yahoo,
Hotmail, SkyDrive, Google Apps, Amazon, Windows Live, DropBox are just several examples how
the cloud computing is used in everyday business. Basic adventages are : pay per-use, it is not
necessary to operate the system, all in one place. However, there are some disadvantages, and the
main are: data security, privacy, and depending on the service provider. In this paper we will
consider the state of computing in the clouds in Serbia
Keywords: IT as a service, advantages and disadvantages of cloud computing, ERP, Serbia

JEL Klasifikacije: D80, I21

1. INTRODUCTION
The main problem of modern business companies in the IT business are fixed costs that create
the procurement of equipment, software and support for their proper functioning. However, a much
more significant loss of money is reflected in the defeat of the equipment. Analysts have tried to
measure the percentage of utilization of the average computer and came up with startling data that
only 17 percent of real options is being utilized.

1spec.

Bratislav Mikari, Visoka poslovna kola strukovnih studija "prof. dr Radomir Bojkovi", Kruevac, Srbija,
bmikaric@gmail.com
2
master Marija Markovi-Blagojevi, Visoka kola z aposlovnu ekonomiju I preduzetnitvo, Beograd, Srbija,
mmarrija@gmail.com
3 mr Duan Trajkovi, Visoka poslovna kola strukovnih studija "prof. dr Radomir Bojkovi", Kruevac, Srbija,
dusantt@gmail.com

If you think about it, it really sounds amazing. This is equivalent to a situation in which a
shipowner hold 83 percent of the time in port for their vessels, duly paying expensive maintenance.
It is simply not enough profit. That the aid jumps Computing in the clouds.
Renting cloud services effectively you get three products in one: the hardware through
virtualization software platform, which allows you to run the application and the application itself,
which performs some work. Most importantly, at the end of the job you pay exactly as much as you
and use the service cloud.
There are many definitions of Cloud Computing, but the National Institute of Standard (NIST),
defines it as: Cloud computing is a model for enabling convenient, on demand network access to a
shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and
services) that can be rapidly provisioned and released with minimal management effort or service
provider interaction.[1]

Figure 1. What is Cloud Computing

Cloud computing, or something being in the cloud, is an expression used to describe a variety
of different types of computing concepts that involve a large number of computers connected
through a real-time communication network such as the Internet. Cloud computing is a term
without a commonly accepted unequivocal scientific or technical definition. In science, cloud
computing is a synonym for distributed computing over a network and means the ability to run a
program on many connected computers at the same time. The phrase is also more commonly used
to refer to network-based services which appear to be provided by real server hardware, which in
fact are served up by virtual hardware, simulated by software running on one or more real
machines. Such virtual servers do not physically exist and can therefore be moved around and
scaled up (or down) on the fly without affecting the end userarguably, rather like a cloud. [2]
Cloud computing is the delivery of computing power and storage capacity as a service to a
heterogeneous group of end-users. The concept of cloud computing is based on the sharing of
resources across a network, usually the Internet. The end users access applications in the cloud via

a web browser, but the desktop application on the mobile phones, while the software and data are
stored on the servers in a remote location [3].

Figure 2. Three main type of cloud computing [2]

There are three main types of cloud computing shown on figure 2:
Software as a Service, SaaS
Platform as a Service, PaaS
Infrastructure as a Service, IaaS
The basis of cloud computing are converging infrastructure, consisting of a variety of IT related technology in a logical and functional space as an abstraction of physical resources by
vitruelization , and sharing resources. In the model of Cloud Computing distinguish two separate
external systems - front end, which is part of the user and includes all parts of the infrastructure
under the control of the user as well as the method of user access service, and the last part - back
end, which includes infrastructure of Cloud providers. Proponents of cloud computing argue that
this model allows enterprises to raise and use applications much faster, with greater control and less
maintenance, allowing IT sector companies to quickly and efficiently meet variable and
unpredictable business requirements.
The National Institute of Standards and Technology's definition of cloud computing identifies
"five essential characteristics" [10]:
1. On-demand self-service. A consumer can unilaterally provision computing
capabilities, such as server time and network storage, as needed automatically
without requiring human interaction with each service provider.
2. Broad network access. Capabilities are available over the network and accessed
through standard mechanisms that promote use by heterogeneous thin or thick client
platforms (e.g., mobile phones, tablets, laptops, and workstations).
3. Resource pooling. The provider's computing resources are pooled to serve multiple
consumers using a multi-tenant model, with different physical and virtual resources
dynamically assigned and reassigned according to consumer demand. ...

4. Rapid elasticity. Capabilities can be elastically provisioned and released, in some

cases automatically, to scale rapidly outward and inward commensurate with
demand. To the consumer, the capabilities available for provisioning often appear
unlimited and can be appropriated in any quantity at any time.
5. Measured service. Cloud systems automatically control and optimize resource use
by leveraging a metering capability at some level of abstraction appropriate to the
type of service (e.g., storage, processing, bandwidth, and active user accounts).
Resource usage can be monitored, controlled, and reported, providing transparency
for both the provider and consumer of the utilized service.

2. HISTORY OF CLOUD COMPUTING

The underlying concept of cloud computing dates back to the 1950s, when large-scale
mainframe computers became available in academia and corporations, accessible via thin
clients/terminal computers, often referred to as "static terminals", because they were used for
communications but had no internal processing capacities. To make more efficient use of costly
mainframes, a practice evolved that allowed multiple users to share both the physical access to the
computer from multiple terminals as well as to share the CPU time. This eliminated periods of
inactivity on the mainframe and allowed for a greater return on the investment. The practice of
sharing CPU time on a mainframe became known in the industry as time-sharing. During mid 70s
it was popularly known as RJE Remote Job Entry process mostly associated with IBM and DEC
mainframes. [2]
John McCarthy opined in the 1960s that "computation may someday be organized as a public
utility." Almost all the modern-day characteristics of cloud computing (elastic provision, provided
as a utility, online, illusion of infinite supply), the comparison to the electricity industry and the use
of public, private, government, and community forms, were thoroughly explored in Douglas
Parkhill's 1966 book, The Challenge of the Computer Utility. Other scholars have shown that cloud
computing's roots go all the way back to the 1950s when scientist Herb Grosch (the author of
Grosch's law) postulated that the entire world would operate on dumb terminals powered by about
15 large data centers. Due to the expense of these powerful computers, many corporations and
other entities could avail themselves of computing capability through time sharing and several
organizations, such as GE's GEISCO, IBM subsidiary The Service Bureau Corporation (SBC,
founded in 1957), Tymshare (founded in 1966), National CSS (founded in 1967 and bought by Dun
& Bradstreet in 1979), Dial Data (bought by Tymshare in 1968), and Bolt, Beranek and Newman
(BBN) marketed time sharing as a commercial venture.
In the 1990s, telecommunications companies, who previously offered primarily dedicated
point-to-point data circuits, began offering virtual private network (VPN) services with comparable
quality of service, but at a lower cost. By switching traffic as they saw fit to balance server use,
they could use overall network bandwidth more effectively. They began to use the cloud symbol to
denote the demarcation point between what the provider was responsible for and what users were
responsible for. Cloud computing extends this boundary to cover servers as well as the network
infrastructure.
As computers became more prevalent, scientists and technologists explored ways to make
large-scale computing power available to more users through time sharing, experimenting with
algorithms to provide the optimal use of the infrastructure, platform and applications with
prioritized access to the CPU and efficiency for the end users.
After the dot-com bubble, Amazon played a key role in all the development of cloud
computing by modernizing their data centers, which, like most computer networks, were using as

little as 10% of their capacity at any one time, just to leave room for occasional spikes. Having
found that the new cloud architecture resulted in significant internal efficiency improvements
whereby small, fast-moving "two-pizza teams" (teams small enough to feed with two pizzas) could
add new features faster and more easily, Amazon initiated a new product development effort to
provide cloud computing to external customers, and launched Amazon Web Services (AWS) on a
utility computing basis in 2006.
In early 2008, Eucalyptus became the first open-source, AWS API-compatible platform for
deploying private clouds. In early 2008, OpenNebula, enhanced in the RESERVOIR European
Commission-funded project, became the first open-source software for deploying private and
hybrid clouds, and for the federation of clouds. In the same year, efforts were focused on providing
quality of service guarantees (as required by real-time interactive applications) to cloud-based
infrastructures, in the framework of the IRMOS European Commission-funded project, resulting to
a real-time cloud environment. By mid-2008, Gartner saw an opportunity for cloud computing "to
shape the relationship among consumers of IT services, those who use IT services and those who
sell them" and observed that "organizations are switching from company-owned hardware and
software assets to per-use service-based models" so that the "projected shift to computing ... will
result in dramatic growth in IT products in some areas and significant reductions in other areas."
On March 1, 2011, IBM announced the IBM SmartCloud framework to support Smarter
Planet. Among the various components of the Smarter Computing foundation, cloud computing is a
critical piece.

3. SIMILAR SYSTEMS AND CONCEPTS

Cloud Computing is the result of evolution and adoption of existing technologies and
paradigms. The goal of cloud computing is to allow users to take benet from all of these
technologies, without the need for deep knowledge about or expertise with each one of them. The
cloud aims to cut costs, and help the users focus on their core business instead of being impeded by
IT obstacles. [2]
The main enabling technology for cloud computing is virtualization. Virtualization generalizes
the physical infrastructure, which is the most rigid component, and makes it available as a soft
component that is easy to use and manage. By doing so, virtualization provides the agility required
to speed up IT operations, and reduces cost by increasing infrastructure utilization. On the other
hand, autonomic computing automates the process through which the user can provision resources
on-demand. By minimizing user involvement, automation speeds up the process and reduces the
possibility of human errors.
Users face difficult business problems every day. Cloud computing adopts concepts from
Service-oriented Architecture (SOA) that can help the user break these problems into services that
can be integrated to provide a solution. Cloud computing provides all of its resources as services,
and makes use of the well-established standards and best practices gained in the domain of SOA to
allow global and easy access to cloud services in a standardized way.
Cloud computing also leverages concepts from utility computing in order to provide metrics
for the services used. Such metrics are at the core of the public cloud pay-per-use models. In
addition, measured services are an essential part of the feedback loop in autonomic computing,
allowing services to scale on-demand and to perform automatic failure recovery.
Cloud computing is a kind of grid computing; it has evolved by addressing the QoS (quality of
service) and reliability problems. Cloud computing provides the tools and technologies to build
data/compute intensive parallel applications with much more affordable prices compared to
traditional parallel computing techniques.

Cloud computing shares characteristics with:

Clientserver model Clientserver computing refers broadly to any distributed

application that distinguishes between service providers (servers) and service requestors
(clients).

Grid computing "A form of distributed and parallel computing, whereby a 'super and
virtual computer' is composed of a cluster of networked, loosely coupled computers acting
in concert to perform very large tasks."

Mainframe computer Powerful computers used mainly by large organizations for

critical applications, typically bulk data processing such as: census; industry and consumer
statistics; police and secret intelligence services; enterprise resource planning; and financial
transaction processing.

Utility computing The "packaging of computing resources, such as computation and

storage, as a metered service similar to a traditional public utility, such as electricity."

Peer-to-peer A distributed architecture without the need for central coordination.

Participants are both suppliers and consumers of resources (in contrast to the traditional
clientserver model).

Cloud gaming Also known as on-demand gaming, is a way of delivering games to

computers. Gaming data is stored in the provider's server, so that gaming is independent of
client computers used to play the game.

4. ADVANTAGES
Cloud computing relies on sharing of resources to achieve coherence and economies of scale
similar to a utility (like the electricity grid) over a network. At the foundation of cloud computing is
the broader concept of converged infrastructure and shared services.
The cloud also focuses on maximizing the effectiveness of the shared resources. Cloud
resources are usually not only shared by multiple users but are also dynamically re-allocated per
demand. This can work for allocating resources to users. For example, a cloud computer facility,
which serves European users during European business hours with a specific application (e.g.
email) while the same resources are getting reallocated and serve North American users during
North America's business hours with another application (e.g. web server). This approach should
maximize the use of computing powers thus reducing environmental damage as well since less
power, air conditioning, rackspace, etc. is required for a variety of functions.
The term "moving to cloud" also refers to an organization moving away from a traditional
CAPEX model (buy the dedicated hardware and depreciate it over a period of time) to the OPEX
model (use a shared cloud infrastructure and pay as you use it).
Proponents claim that cloud computing allows companies to avoid upfront infrastructure costs,
and focus on projects that differentiate their businesses instead of infrastructure. Proponents also
claim that cloud computing allows enterprises to get their applications up and running faster, with

improved manageability and less maintenance, and enables IT to more rapidly adjust resources to
meet fluctuating and unpredictable business demand.

Figure 3. Top cloud computing providers [7]

Some of the most popular services which is based on cloud computing technology are: Gmail,
YouTube, Yahoo, Hotmail, SkyDrive, Google Apps, Amazon, Windows Live, DropBox.
In just a few short years, cloud computing has become a tech that affects everyone's daily
lives.
Our personal files are stored in the cloud. We maintain our friendships via apps in the cloud.
Mobile phones and tablets run powerful apps via the cloud, giving rise to new devices like tablets,
and killing off others, like the netbook and, perhaps one day, the PC.
IT departments went from distrusting the cloud to allocating billions of dollars to spend on
using it. Instead of buying every app and server they need, they will rent them.
But none of this is happening on its own. It's all being figured out right now by the companies
building clouds.[8]
Depending on that what company want to rent and what to maintain on companys own there
are several levels responsibilities, as shown in Figure 4.

Figure 4. Separations of Responsibilities in Cloud Computing

Data from Information Week Analytic State of Cloud Computing Survey of 607 business
technology professionals, since October 2010 are presented on Figure 5.

Figure 5. Survey What Share of IT Services Will Be Delivered From The Cloud In 24 months
Cloud vendors are experiencing growth rates of 90% per annum.[9]
The infographic is interesting in that it not only outlines the growth rate of cloud services by
segment but also predicts growth. For example, by 2014, 60% of server workload will be
virtualized, meaning more businesses will be utilizing cloud services. Of all the cloud computing
revenues, about 50% comes from the US and currently, 40% of the customer relationship
management (CRM) systems sold globally are cloud-based. Additionally, IT organizations in 30%
of Global 1000 companies will likely broker two or more cloud services for internal and external
users by 2014. That is up from todays current figure of 5%.
These stats and figures provide more than an overview of the cloud computing industry. They
reveal opportunities for businesses looking to grow their revenue by adding cloud services to their
product line. A quick glance at the infographic shows that the market size of Enterprise Cloud
Based Services will increase from $18.3 billion in 2012 to $31.9 billion in 2017; the SaaS
Applications and Services market will rise from $27 billion in 2012 to $67 billion in 2016; and the

Public Cloud Storage market will increase from a 2012 figure of $5.6 billion to $12.2 billion in
2016. Still considered in its infancy, these impressive figures for the cloud computing industry will
only continue to increase as more businesses understand its potential.

Figure 6. Cloud Segments Growth Rates [13]

5. THE POSSIBLE DEPLOYMENT MODELS

Private cloud: The cloud infrastructure is owned or leased by a single organization

and is operated solely for that organization (Private Clouds are also known as
Internal Clouds, and Public Clouds as ExternalClouds).
Community cloud: The cloud infrastructure is shared by several organizations and
supports a specific community that has shared concerns (e.g., mission, security
requirements, policy, and compliance considerations).
Public cloud: The cloud infrastructure is owned by an organization selling cloud
services to the general public or to a large industry group.
Hybrid cloud: The cloud infrastructure is a composition of two or more clouds
(internal, community, or public) that remain unique entities but are bound together
by standardized or proprietary technology).

Figure 7. Predicted Market Shares [13]

6. WHY SHOULD WE CARE?

Business managers know that in spite of the benefits of every new technology/business model,
there are also risks and issues like trust, loss of privacy, regulatory violation, data replication,
coherency and erosion of integrity, application sprawl, and dependencies, among others.
Therefore they realize that rushing things when it comes to Cloud Computing can be a very
bad decision. However, ignoring Cloud Computing all together, because of a belief in your ability
to secure your own environment better than a service provider ever could, or jumping rapidly into it
because the many claims made about Cloud Computing have led you to the point of "irrational
exuberance" and unrealistic expectations, isn't smart either.
This Paper contains useful information even if your company (either private company or
public organization) has already decided not to use Cloud Computing in the near future. It is likely
that unbeknownst to you, some of your departments are already using Cloud Computing, and you
will need to define a Cloud Governance Program and make it available to all your internal
customers.
For instance, if company has an IT department, one must agree that it is very tempting for
software developers, pressed to demonstrate a proof of concept, to use a Cloud Computing service
provider and configure the servers there (in minutes or hours), instead of waiting days or months
for new server acquisitions to be approved, delivered, set up by IT, have the network configured,
and so on.
Or maybe it is company`s sales department that decides to go to a Cloud Computing service
provider and start using their Cloud Computing CRM immediately, instead of waiting months to
have an onpremise CRM program, and company will only become aware of this initiative when
they ask to integrate it with the billing and finance programs.
After all, all they need is a credit card (if the cost is low it may well be within the discretionary
budget of the department, and in some situations not even a credit card is required because some
Cloud offerings are free), to start using any Cloud Computing service immediately, and in true
agile fashion, instead of asking permission to use it, they may be asking for forgiveness after they
have already done so...

Also, a relatively young company, without a huge IT infrastructure, will tend to move more
quickly to the Cloud, be able to enter and build new "markets" more rapidly, and thus achieve
competitive advantages over more traditional businesses. [5]

Figure 8. Pro et Contra Cloud computing [5]

6.1. FIVE REASONS TO EMBRACE AN EXTERNAL CLOUD AND FIVE

REASONS TO STAY AWAY
On the upside:
1. Fast start-up
"Cloud computing is really a no-brainer for any start-up because it allows to test business plan
very quickly for little money. Every start-up, or even a division within a company that has an idea
for something new, should be figuring out how to use cloud computing in its plan," says Brad
Jefferson, CEO of Animoto, a New York company that creates full-motion videos out of customer
selected photos and music. "Cloud computing has changed the game for entrepreneurs - the
greatest part about it is that on launch day, user have the confidence that he scale to the world."
2. Scalability
To figure out if you're a good cloud service prospect, first consider the variability of the
resource utilization of your own IT structure, says Tom Nolle, CEO of CIMI, a high-tech
consulting firm. "If you've got enormous peaks and valleys, you're forced to oversupply IT
resources to address the peaks. It may be significantly less costly for you to outsource the peaks,"
he says.
3. Business agility.
"Your mind really changes quickly when you can solve problems using IT resources but you
don't need a long-term commitment and you don't have to wait a long time to get them," says
Michael Crandell, CEO of RightScale, a cloud management and support company. "Cloud
computing changes the whole pattern of agility at a much lower cost."

4. Faster product development

Since moving some applications and data to Amazon's cloud last April, Eli Lilly & Co. has
seen provisioning time drop from weeks to minutes, says Dave Powers, associate information
consultant at the Indianapolis company. "If I can give scientists eight weeks back on their research,
that's a huge value there," he adds. "This is really starting to impact how we do business. We're
starting to reduce cycle times in research, which is critical for us. That's a trickle-down effect of
technology that we can make available to the scientific community."
5. No capital expenditures
Are you out of space in your data center? Have your applications outgrown the infrastructure?
Cloud computing services allow a company to shift from capital to operational expenses even in
do-or-die cases, says Bernard Golden, CEO of HyperStratus, a consulting firm specializing in
advanced IT technologies.
On the downside:
1. Bandwidth could bust your budget
Such was the case at Sony Pictures Image Works, which considered then ruled out an external
cloud service to address storage scalability challenges, says Nick Bali, senior systems engineer at
the Culver City, Calif., company. Every day, Sony animators access and generate between 4 and 12
terabytes of data. "The network bandwidth we'd need to put that into someone's cloud and to read it
back is tremendous, and the cost would be so large that we might as well buy the storage ourselves
rather than paying someone else for it," he says. Now Sony is evaluating a private storage cloud,
using ParaScale's cloud storage software.
2. App performance could suffer
A private cloud might, but a public cloud definitely wouldn't lead to improved application
performance - not when taking network latency into account, says Tony Bishop, CEO of
Adaptivity, a consulting firm specializing in next-generation IT infrastructure.
"I couldn't see an investment bank putting a latency-sensitive application on an external
cloud," adds Steve Harriman, a vice president at NetQoS.
3. Data might not be cloud-worthy
"On Day 1, we probably had eight to 10 applications that we would have loved to take into the
cloud," says Eli Lillys Powers. "But, knowing the type of data we had and the classification [of
who could see it], we decided going through internal governance and rigor around taking care of
that data would be appropriate." And, definitely don't put an application that provides competitive
advantage or contains customer-sensitive information in the public cloud, Bishop adds.
4. Too big to scale
"The bigger you are, the bigger your IT resource pool. And the bigger your IT resource pool,
the less likely it is that you'll see any enormous financial advantage in outsourcing to the cloud,"
CIMI's Nolle says. "Cloud computing promotes better resource utilization, but the gains are
greatest when moving from relatively small consumption of resources upwards. If you're a very
large enterprise, you might find you can achieve better economy by doing your own cloud than
going to an outsourced one."
5. Human capital may be lacking
Exploring next-generation IT models requires an adventuresome spirit and technical
astuteness, says HyperStratus' Golden. "If you don't have the human capital that's willing to stretch
and learn new things, taking on cloud computing can be very frustrating."

7. ERP in the Cloud

Since the occurrence of Enterprise Resource Planning (ERP) systems in the early 90s, the
company struggled to balance the high cost and complexity of the system versus the need for
custom features and flexibility. Recently appeared third model system in which ERP system is
distributed from the cloud, and the end user can access it via a web browser. This solution offers
significant advantages, including capital expenditures, lower overall costs and faster
implementation. Before making a final decision on the use of ERP systems in the cloud, there are
several approaches that IT leaders should consider. Further study provides an analysis of the
strengths and challenges of these systems. [15]

Figure 9 . ERP in the cloud [16]

7.1. Benefits of ERP in the Cloud

A brief history of ERP system is marked by significant achievements, but is also notorious
failures which include, above all, the cost and complexity of implementation. For this reason, the
aim is that the cloud to a new method for solving the ERP notorious of these characteristics.
Unlike the cost of purchasing the ERP system, the fee for the use of ERP in the cloud is paid
through a subscription model, which typically includes software, hosting costs and support. So that
the initial capital required for the implementation of spending significantly less than traditional
systems, and operating costs can often be lower. [14] Based on the cloud providers can enhance
their offerings with relative ease depending on the needs and growth of the organization. Sellers are
responsible for maintaining the hardware and software, including all updates and updates. They
also provide the necessary backup, system monitoring and customer support. Transferring this

responsibility should allow companies reduce the size of their IT organization and freeing up
resources for other activities. The total cost of the company for a solution based on the Web can be
50 to 60 percent less than the traditional solution, over a period of 10 years.
Fast implementation One of the major shortcomings of ERP system is its implementations in
the enterprise. For it usually takes months and sometimes years. Solution based on the Web, on the
other hand, provides a basic configuration with a limited range of options that are designed to meet
the requirements of most companies - an approach that can significantly reduce the time for solving
the most critical needs of the organization. [14] How long does it take to implement the ERP
system in the cloud, is determined depending on the size of the organization, but also the time
required to update all affected business processes and transform the relevant data. In other words,
companies need to alter their business practices to suit the abolition of the system of traditional
ERP applications and significantly reduce complexity. Despite the limitations of configuration
systems in the cloud are designed to enable business functions. [14]
Flexibility and scalability are dealers for companies that use the services of ERP in the cloud
enable new ways of acquiring new software and features without going through the usual
cumbersome process of buying and delivery software. For example. SAP and Salesforce com., A
range of new applications for advanced analytics, collaboration, financial management through
web stores such as iTunes Store.
7.2 Limitations of ERP in the Cloud
Services ERP in the cloud are still new in the market and are insufficiently tested, so it's one of
the main reasons concerns of most companies. Other major problems include limited functionality
and customization, and the perceived risk of data.
7.3. Limited functionality and Availability
ERP systems to the cloud for now are focused on providing core ERP functionality, such as
general accounting, procurement, receivables and payables. During the development of new
functions such as statistical forecasts, planning, production management, etc.., To offer
functionality in the cloud, now is poorer compared to the advanced functions of traditional ERP
systems. In addition, the ERP in the cloud is limited geographically, so for the most part can not
support the demands of each region in which the company operates. [14]
7.4. Increased customization and integration
Compared to traditional solutions in the cloud offers a limited range of options for
configuration. The option of using ERP in the cloud is best suited for companies that use highly
standardized business processes in areas such as sales, purchasing and receivables. ERP in the
cloud may not be able to cope with the needs of businesses with highly customized business
processes or highly developed architecture specific applications. [14] For example, SAP on demand
ERP systems for small and medium businesses offers a standard connection via NetVeaver and
integration with common applications such as Salesforce.com.
7.5. The perceived risks of data
Companies that choose the ERP system in the cloud must be willing to trust an independent
service provider and they share information companies, such as financial data or customer purchase
orders. It is important to note that for this purpose there are certain regulatory requirements, such
as the United States International regulation of arms transfers and specific business needs, which
includes storing highly sensitive data and intellectual property. [14] With regard to the measures
that can be taken against the service provider business in the cloud, which aims to provide security,

the perception of increased risk tends to be based more on ignorance of these new features, but the
real security risks.
7.6. Organizational Resistance
IT organizations that use traditional ERP systems are in most companies already formed teams
and develop the skills needed to work in ERP environment, including data, hosting, support,
maintenance and ongoing development of the application, so you will probably feel threatened by
the proposal to launch ERP applications in the cloud.

8. CLOUD COMPUTING IN SERBIA

Individual users in Serbia still does not have to think about Cloud Computing, unless someone
plan to open a portal or web media with a daily refresh, where rent Cloud infrastructure can greatly
facilitate the expansion of the required capacity.
Labor costs in Serbia is still very small, and the question of financial feasibility of the
introduction of Cloud Computing in the company. It is likely many still cheaper to develop
software for themselves (by paying small monthly wage for developers), that the data held on the
hard drives and to manage, at least as financially stronger. [17]
Positive examples of some companies in Serbia that have passed into the "cloud", such as the
portal of RTS, however, point out that in our country can create a functional project that saves
money (and one that is pumped out of the pockets of citizens) and facilitates the use of . So it is not
surprising that it plans to introduce Cloud services geared towards public companies and parts of
the public and the Government sector, where savings guaranteed by the Cloud mean a reduction in
costs from the budget, which certainly helps in the difficult economic situation in the country.
In Serbia you can find a wide range of services in this area. In this field the importance of
cooperation and Telecom companies Coming Computer Engineering, based on VMWare solutions.
Telekom Serbia (thanks to the presence in the region, Montenegro and Bosnia and Herzegovina)
has about 9 million subscribers and as a signal of mobile telephony, and broadband Internet, is the
ideal partner company Coming Computer Engineering from Belgrade, which for 20 years engaged
in the development and implementation of IT system. There was a business need for public and
private cloud solutions that offer flexible use of virtual infrastructure, rental virtual server or server
and client applications or the entire platform. Elements of these services include connecting to the
site system infrastructure and Cloud Computing companies, access to virtual destop and / or server
devices, creation and setup of virtual elements in the user's wishes, as well as install and configure
the appropriate applications. Service, naturally, monitor and support systems data security, as well
as mechanisms for disaster recovery.
The partnership of these two great companies guarantees the security and control of the data
center to the highest standards, secure VPN connectivity, virtual firewalls, data encryption and antivirus protection. A Cloud Computing infrastructure directed by the duo come through several
levels of support - from basic (nine hours, five days a week), through three additional packages that
offer 24/7 support with added monitoring, administration of all subsystems, as well as performance
optimization. Business support to small and medium-sized enterprises extends through renting
infrastructure only for the purpose of backing up or failure of the primary site, as well as for the
provision
of
seasonal
and
peak
capacity
to
meet
customer
needs.
Also, offer Cloud services in Serbia offers a well-known company EUnet. The internet provider is
renting Telenor Tier 3 data center in Belgrade, as well as those in London and Miami, provided a
functional infrastructure to support computing in the clouds. Solutions of the company are based on
AppLogic platform CA3 and emphasize the agility and scalability in terms of the creation,

deployment, management and monitoring applications in the cloud. Services that offers a variety of
EUnet are covering all aspects of business - from renting a Cloud Server (offered in four variants)
to private cloud server (also in four variants) and applications in the "cloud" dedicated to the
development and management of complex portals (Web Cloud server, LAMP server with firewall
and load balancing support). EUnet offers various web services in the field of "clouds" in the form
of standard for audio streaming, server e-mail and mailing lists, through a system of telephone
exchanges and FTP server, up to document management, SugarCRM and Jira (project / problem
management) system. We would especially praise the existence of high-quality video files that
explain aspects of computing in the "cloud" and further facilitate the selection of appropriate
services.

CONCLUSION
Computing in the Cloud is clearly defined as a set of web services intended providing a variety
of computer services, from digital data storage to complete software solutions, which are
characterized by the following features: based on availability standard information and
communication by technology, founded on a computer virtualization, scalability, fee per use (pay
as you go or pay per use) and usage and scaling on demand. Explained the service paradigm IaaS ,
PaaS and SaaS and the reasons why it is best used in right through the computer clouds. There are
huge benefits of using cloud computing, economic and technical. Economic benefits reduce the
profitability caused by elasticity and optimal procurement. Elasticity means that computing
resources can be engaged when needed and release when need disappears, while the optimal supply
means that we should not pre-purchase computing resources (which in everyday situations are not
needed) just to cover peak loads.[12]
However, there are some disadvantages, and the main are: data security, privacy, and
depending on the service provider.
Cloud vendors are experiencing growth rates of 90% per annum, and this fact shows that all in
all there are much more advantages than disadvantages of using cloud computing.
Cloud computing without strategy can be a threat but with strategy is a huge opportunity!
Computing in the clouds and in Serbia is not yet sufficiently developed, or at least not to the
extent that it should be a view of all the benefits and savings of which is written in this work.

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