UNIT II CLOUD SERVICES STRATEGY

Cloud Strategy Fundamentals, Cloud Strategy Management Framework, Cloud Policy, Key Driver for
Adoption, Risk Management, IT Capacity and Utilization, Demand and Capacity matching, Demand
Queueing, Change Management, Cloud Service Architecture.

Strategic Management Framework

Strategic Management is the process of formulating, implementing, and evaluating cross functional
decisions that enable an organization to achieve its objectives. The strategic management model
entails strategy assessment, formulation / planning, execution and evaluation.

The strategic management process plays a vital role when an organization is undergoing significant
change, for example when a startup company is transitioning to scale up its business or when a
company has been bought by another competitor. It helps to realign decisions to ensure your business
has the competitive advantage needed to be successful.

The Strategic Management framework has multiple phases and I think the picture below helps to
detail out the various core elements.

There are other SM frameworks and all contain similar core elements.

1. Every Strategic Management framework starts with an Assessment. This is the phase
of gathering data and information to understand the needs of the business, the
company's strategic direction, and the initiatives that will assist in growth and
expansion.

2. Environmental Assessment is the phase to evaluate the internal and external

factors influencing the business. The internal analysis looks at organizational
structure, internal processes and core competencies of the employees. It also
reviews employee interaction with each other and the management layer. The
external analysis helps to identify industry and socio-economic factors that impact
the competitive position of the business. Analytical tools, such as SWOT analysis,
are helpful during this phase.

3. Based on the results of the analysis, the business can then formulate a strategy.
Strategy Formulation is the phase of deciding the best course of action for
accomplishing the business's objectives and purpose. This is the stage to develop
a vision and mission, long term objectives, generate alternative strategies and
choose which strategies to pursue.

4. Strategic planning is the process of converting the strategies into an integrated

plan of action that can be implemented. It also involves creating a strategic plan
which summarizes the time-phased outputs and drivers.
 5. Strategy execution (implementation) is the phase of putting the strategy into
action. It includes designing the organization’s structure, distributing resources,
setting policies, developing decision making process, and managing human
resources.

6. Strategic management doesn't just end with a successful implementation, it

continues into Strategy Evaluation which reviews the internal and external factors
impacting the strategy, measures performance, and takes corrective actions which
can lead to potentially revising the business strategy over time.

The bottom line is that there is not one prescription that fits all. Businesses have to create and
adapt a strategic management process that works best for their them and those that they
serve. If done right, it helps to align and connect the dots between the big picture strategy to
the more operational elements, targets and initiatives within the business.

Cloud Policies

Cloud policies are the guidelines under which companies operate in the cloud. Often
implemented in order to ensure the integrity and privacy of company-owned information, cloud
policies can also be used for financial management, cost optimization, performance
management, and network security.
The cloud is not inherently insecure

With regard to the risk of data loss, the cloud is not inherently insecure. Cloud service
providers build their platforms focusing more on security and governance than companies who
build on-premises IT infrastructures that are protected by a firewall. It is the way the cloud is
used that often creates an issue, with developers sometimes failing to take the appropriate
precautions when deploying resources.
Company’s should take advantage of cloud service providers´ tools to encrypt data and control
who has access to it, and to implement cloud policies that address the issue of inappropriately-
protected deployments. To ensure these policies are
enforced, companies can use cloud management platforms that collect and analyze logs and
create audit trails in order to identify and correct policy violations.

Cloud policies for financial management

Cloud policies for financial management not only help control operational budgets and monitor
cost trends, but can be useful in identifying sudden increases in cloud spend that could be
indicators of a bigger security problem—for example hackers obtaining login credentials and
launching Virtual Machines on the company’s cloud account that are then used for
cryptocurrency mining.

Several security reports have claimed “crypto-jacking” is catching up with ransomware as a

preferred attack vector. Although the consequences of cryptocurrency mining malware are not
as instantly devastating as ransomware, the long term costs can be far greater. Cloud policies
for financial management can identify unexpected increases in costs due to unauthorized CPU
or bandwidth usage.

Additionally, establishing a Cloud Financial Management practice can also help cost
optimization process. Cloud Financial Management (CFM), also known as FinOps or Cloud Cost
Management, is a function that helps align and develop financial goals, drive a cost-conscious
culture, establish guardrails to meet financial targets, and gain greater business efficiencies.

Cost optimization cloud policies

In recent years there has been a growth in software solutions for optimizing cloud costs. These
are available from cloud service providers or—if your business operates in a multi-cloud or
hybrid cloud environment—third party software solutions are available from multiple vendors.
These solutions often have the capability to apply cost optimization cloud policies to assets
across multiple platforms.

What some software solutions lack is the capability to manage Reserved Instances, Reserved VM
Instances and Committed Use discounts. The benefit of being able to apply cloud policies to
Reserved Instances is that you will be able to identify when cost savings can be made by
purchasing more Reserved Instances, or when your existing Reserved Instance purchases are not
being fully utilized.

Cloud policies for performance management

Cloud policies for performance management enable you to specify performance thresholds for
Virtual Machines and storage volumes so you can monitor for underutilized and overutilized
assets. Underutilized Virtual Machines and storage volumes should be downgraded for cost
efficiency, while overutilized assets should be upgraded to avoid performance headaches.

It is important to remember the application of cloud policies for performance management will
affect the policies put in place for financial management and cost optimization. For example, if
you upgrade assets to increase their performance, this will have an impact on operational
budgets and cost optimization. If you downgrade assets, the reverse will apply.

Network security cloud policies

Maintaining a secure perimeter to allow only legitimate traffic onto your network is critical in
the cloud and the leading cloud service providers acknowledge this by supplying tools to
determine which users or group identities should have access to hosted services and
applications. Amazon and Microsoft both call their tools “Security Groups”, Google offers the
“Identity-Aware Service”.

Within each of these tools, the capability exists to apply network security cloud policies that
define what inbound traffic is allowed. As well as using cloud policies for access control, best
practice is to apply policies to alert you to Security Group misconfigurations, when new Security
Groups are created, when Security Groups exist that are not being used, and when assets have
too many rules applied to them.

Automating the enforcement of cloud policies

Prior to creating cloud policies, it is essential to have total visibility over your cloud
environment in order to fully understand what assets your company has deployed in the cloud
and how they are being used. CloudHealth gives you the total visibility required and tools to
analyze costs, usage, performance, and security to enable you to make informed choices when
applying cloud policies.

CloudHealth then automates governance of your cloud policies to provide continuous

monitoring – alerting you to events that require your attention or that may require you to revisit
your policies as your presence in the cloud evolves and grows.

Key Drivers for Adoption

In recent years, Cloud migration has progressed beyond development and testing, and there has
been a tremendous upsurge in adoption of Cloud services among IT organizations. Enterprises,
all over the world, have unique requirements and challenges when it comes to Cloud
computing. Especially for startups and small and midsize businesses (SMBs), Cloud has emerged
extremely advantageous as personnel and financial resources are limited. Cloud provides
enterprises the flexibility to focus on their core competencies and reduce cost to a great extent.
Although there are security concerns associated with Cloud adoption, the rapid adoption of
enterprise-class cloud computing implies that the concerns are being met. This becomes more
convincing when we look at IDG Enterprise’s Cloud Computing Study, which says that 24% of IT
budgets will be allocated to cloud solutions in 2015, with the highest percentage being
allocated to Software as a Service (SaaS) models.
With the amount of interest Cloud has managed to build up among startups, SMBs, and Chief
Information Officer (CIOs), we have tried to analyse and compile the most important drivers of
Cloud services adoption.
1. Increasing business agility – Business agility is undoubtedly the main benefit and key driver
behind Cloud adoption among enterprises. It has been found that enterprises who have
adopted Cloud have gained competitive advantage by reducing complexity and increasing
business agility. Even for SMBs and independent software vendors (ISVs), business agility has
been the main reason for moving to Cloud. Enterprises that have adopted Cloud have observed
improved agility due to on-demand self-service and rapid elasticity. Moreover, IT resources can
be acquired and deployed more quickly and, once deployed, they can be increased or
decreased as needed to meet the demand.
2. Reducing cost – This is definitely one of the key drivers behind Cloud adoption. Many
enterprises have witnessed a considerable reduction in license and services spend by adopting
Cloud services, compared to legacy systems. In many cases it has been found that the cost of
replatforming to the cloud is actually much lower than the license renewal of their legacy apps.
For SMBs, this benefit leads to a very healthy return on investment (ROI) after year 1. Cloud
computing enables organizations to reduce cost through server consolidation, thin clients and
community cost sharing.
3. Enforcing mobility – An increasing number of enterprises are driven towards Cloud
technology, because it is ubiquitous, self-configurable and cost effective. With remote working
gaining popularity among organizations, Cloud computing is enabling employees to work at any
place, at any time, and on any device. In recent years, the way smart mobile devices market has
matured and got acceptance has made mobility a key driver behind Cloud adoption. In the days
ahead, more and more enterprises are expected to join the race to launch new Cloud
computing solutions of all sizes to be more efficient and gain competitive advantage.
4. Improving productivity – Every organization is concerned about improving productivity
and Cloud computing is seen as an ideal option by many organizations. Use of Cloud-based
tools for email, instant messaging, voice communication, information sharing and
development, event scheduling, and conferencing is becoming an increasingly common
feature of business life.
5. Creating new business avenues – An enterprise can get new business opportunities as a
provider of cloud services or added services. Organizations that have good track record of its
own IT can become a public Infrastructure - as-a- Service (IaaS) or Platform-as-a-Service (PaaS)
provider. One business opportunity could be, if a company implements a private cloud and has
spare capacity, it can sell that additional capacity as public Cloud to another company. On the
other hand, software companies can expand their market by providing cloud services in the
form of Software-as-a-Service (SaaS).
The drivers discussed above will impact enterprises at different levels. Any organization will only
benefit largely from Cloud adoption, if it is considered, planned and implemented strategically.

Risk Management

Cloud computing services have seen exponential growth by individuals, businesses, and
organisations over the past few years. Though cloud services provide a boost to the business
and have immense advantages,

cloud-based information systems are exposed to threats that can have adverse effects on
organisational operations, assets, and individuals. Therefore, risk management plans in cloud
computing are implemented by organisations to mitigate cloud-based risks, improve system
security, and expedite business growth.
Cloud computing is a technology that allows its user to access resources such as storage,
memory, network, and computing; these resources are physically present at any geographical
location, but can be accessed over the internet from anywhere in the globe.

This advancement in technology has revolutionized the working of businesses and

organizations. More and more organizations are investing in cloud deployment infrastructure
rather than on-premise infrastructure. This mobilization of technology introduces new risks
associated with cloud computing, which needs to be treated with foresight. To manage these
risks, risk management plans are implemented by organizations.

Risk management is the process of identifying, assessing, and controlling threats to an

organization’s system security, capital and resources. Effective risk management means
attempting to control future outcomes proactively rather than reactively. In the context of
cloud computing, risk management plans are curated to deal with the risks or threats
associated with the cloud security. Every business and organization faces the risk of
unexpected, harmful events that can cost the organization capital or cause it to permanently
close.

Risk management allows organizations to prevent and mitigate any threats, service disruptions,
attacks or compromises by quantifying the risks below the threshold of acceptable level of risks.

Process of Risk Management

Risk management is a cyclically executed process comprised of a set of activities for

overseeing and controlling risks. Risk management follows a series of 5
steps to manage risk, it drives organizations to formulate a better strategy to tackle upcoming
risks. These steps are referred to as Risk Management Process and are as follows:

• Identify the risk

• Analyze the risk
• Evaluate the risk
• Treat the risk
• Monitor or Review the risk
Now, let us briefly understand each step of the risk management process in cloud
computing.

• Identify the risk

• The inception of the risk management process starts with the identification of the risks
that may negatively influence an organisation's strategy or compromise cloud system
security. Operational, performance, security, and privacy requirements are identified.
The organisation should uncover, recognise and describe risks that might affect the
working environment. Some risks in cloud computing include cloud vendor risks,
operational risks, legal risks, and attacker risks.

• Analyze the risk - After the identification of the risk, the scope of the risk is analyzed. The
likelihood and the consequences of the risks are determined. In cloud computing, the
likelihood is determined as the function of the threats to the system, the vulnerabilities,
and consequences of these vulnerabilities being exploited. In analysis phase, the
organisation develops an understanding of the nature of risk and its potential to affect
organisation goals and objectives.

• Evaluate the risk - The risks are further ranked based on the severity of the impact they
create on information security and the probability of actualizing. The organisation then
decides whether the risk is acceptable or it is serious enough to call for treatment.

• Treat the risk - In this step, the highest-ranked risks are treated to eliminate or modified to
achieve an acceptable level. Risk mitigation strategies and preventive plans are set out to
minimise the probability of negative risks and enhance opportunities. The security
controls are implemented in the cloud system and are assessed by proper assessment
procedures to determine if security controls are effective to produce the desired outcome.

• Monitor or Review the risk - Monitor the security controls in the cloud infrastructure on
a regular basis including assessing control effectiveness, documenting changes to the
system and the working environment. Part of the mitigation plan includes following up
on risks to continuously monitor and track new and existing risks.

The steps of risk management process should be executed concurrently, by individuals or

teams in well-defined organisational roles, as part of the System Development Life Cycle
(SDLC) process. Treating security as an addition to the system, and implementing risk
management process in cloud computing independent to the SDLC is more difficult process
that can incur higher cost with a lower potential to mitigate risks.
Types of Risks in Cloud Computing

This section involves the primary risks associated with cloud computing.

1. Data Breach - Data breach stands for unauthorized access to the confidential data of
the organisation by a third party such as hackers. In cloud computing, the data of the
organisation is stored outside the premise, that is at the endpoint of the cloud service
provider(CSP). Thus any attack to target data stored on the CSP servers may affect all
of its customers.

2. Cloud Vendor Security Risk - Every organisation takes services offered by different
cloud vendors. The inefficiency of these cloud vendors to provide data security and risk
mitigation directly affects the organisation's business plan and growth. Also, migrating
from one vendor to another is difficult due to different interfaces and services provided
by these cloud vendors.

3. Availability - Any internet connection loss disrupts the cloud provider's services,
making the services inoperative. It can happen at both the user's and the cloud
service provider's end. An effective risk management plan should focus on availability
of services by creating redunadancy in servers on cloud such that other servers can
provide those services if one fails.
4. Compliance - The service provider might not follow the external audit process,
exposing the end user to security risks. If a data breach at the cloud service provider's
end exposes personal data, the organisation may be held accountable due to improper
protection and agreements.

Apart from these risks, cloud computing possesses various security risks bound under 2 main
categories.

• Internal Security Risks

• External Security Risks

Internal Security Risks

Misconfiguration of settings - Misconfiguration of cloud security settings, either by the

organisation workforce or by the cloud service provider, exposes the risk of a data
breach

1. Malicious Insiders - A malicious insider is a person working in the organisation and

therefore already has authorized access to the confidential data and resources of the
organization. With cloud deployments, organisations lack control over the underlying
infrastructure; making it very hard to detect malicious insiders.

External Security Risks

External security risks are threats to an organisation arising from the improper handling
of the resources by its users and targeted attacks by hackers.
 1. Unauthorized Access - The cloud-based deployment of the organisation's
infrastructure is outside the network perimeter and directly accessible from the public
internet. Therefore, it is easier for the attacker to get unauthorized access to the server
with the compromised credentials.
2. Accounts Hijacking - The use of a weak or repetitive password allows attackers to
gain control over multiple accounts using a single stolen password. Moreover,
organizations using cloud infrastructure cannot often identify and respond to such
threats.
3. Insecure APIs - The Application Programming Interfaces(APIs) provided by the cloud
service provider to the user are well-documented for ease of use. A potential
attacker might use this documentation to attack the data and resources of the
organisation.

Benefits of Risk Management

Risk management enables organisations to ensure any potential threats to cloud- deployments
security, assets, and business plans are identified and treated before they derail the
organisation's goals. It has far-reaching benefits that can fundamentally change the decision
making process of the organisation. Here are some benefits of robust risk management:

1. Forecast Probable Issues - The risk management process in cloud computing identifies
all the possible risks or threats associated with the cloud service provider, the cloud
vendor, the organisation, and the users. It helps an organisations to mitigate risks by
implementing appropiate control strategies and create a better business plan.

2. Increases the scope of growth - Risk management in cloud computing forces

organisations to study the risk factors in detail. Thus, the workforce is aware of all the
possible catastrophic events; and the organisation creates a framework that can be
deployed to avoid risks that are decremental to both the organisation and the
environment. Hence, risk management enables organisations to take a calculated risks
and accelerate their growth.

3. Business Process Improvement - Risk Management requires organisations to collect

information about their processes and operations. As a result, organisations can find
inefficient processes or the scope for improvement in a process.

4. Better Budgeting - Organisations implementing risk management strategies often have

clear insights into the finances. Thus, they can create more efficient budgets to
implement risk management plans and achieve the organisational goals.

Capacity and Utilization Capacity

The capacity, in regards to organizational resource capacity, is the maximum amount of output
that can be produced in a given period of time through effective
management of an organization’s resources. It refers to the potential of organization
to be effective and productive. The capacity of an organization depends on the
effective allocation of resources and their management.

Organizational resources refer to all the assets that are available at an organization’s
disposal for use during the production process. The four major types of resources used by
organizations around the world are human, financial, physical and information resources.

The aim of effective capacity planning is to make usable capacity match the product
demands and any mismatch between the capacity and demand will result in unhappy
customers and underused resources. So, an effective strategy is required to ensure that

Utilization

Utilization, in regards to resource utilization, refers to the production and manufacturing

capabilities of an organization being effectively utilized at any given period of time. It is a key
performance indicator that measures the extent to which the potential output levels of an
organization are being used or met. It ensures how well an organization uses its production
capacity at a given point of time with the existing stock of capital. It is actual production as a
percentage of estimated capacity and cannot exceed 100% except in the short run. It is
actually the relation between the potential or theoretical maximum output and the actual
production output.

From an operations point of view, actual production in any industry is typically less than the
effective capacity and it varies based on how efficiently the workforce is involved, the degree of
disruptions, the product quality, efficiency of the equipment, and a number of other factors.
This leads to the related measure of utilization, which represents the proportion of designed
capacity that is actually being used.

Utilization = amount of capacity used/designed capacity

Matching demand and capacity
When an organization has a clear grasp of its capacity constraints and an understanding of
demand patterns. It is in a good position to develop strategies for matching supply and
demand.

There are two general approaches for accomplishing demand and capacity.

The first is to smooth the demand fluctuations themselves by shifting demand to

match the existing supply.

The second general strategy is to adjust capacity to match fluctuations in demand.

Shifting demand and capacity

By shifting demand and capacity an organization seeks to shift customers away from periods
in which demand exceeds capacity. Perhaps by convincing them to use the service during
periods of slow demand. This may be possible for some customers but not for others.

Vary the service offering

One approach is to change the nature of the service offering, depending on the season of the
year, day of the week, or time of day. For example, Whistler Mountain, a ski resort in
Vancouver, Canada, offers its facilities for executive development and training programs during
the summer when snow skiing is not possible.
Communicate with customers
Another approach for shifting demand and capacity is to communicate with the customers. It
helps them know the times of peak demand so that they can choose to use the service at
alternative times and avoid crowding or delays.
Modify the timing and location of service delivery
Some firms adjust their hours and days of service delivery to more directly reflect
customer demand. Historically, U.S. banks were open only during “bankers’ hours” from 10
A.M. to 3 P.M. every weekday. Obviously, these hours did not match the times when most
people preferred to do their personal banking. Now U.S. banks open early, stay open until 6
P.M. many days, and are open on Saturdays, better reflecting customer demand patterns.
Differentiate on price
A common response during slow demand is to discount the price of the service. This strategy
relies on the basic economics of supply and demand. To be effective, however, a price
differentiation strategy depends on a solid understanding of customer price sensitivity and
demand curves. For example, business travellers are far less price sensitive than families
travelling for pleasure.
For any hotel, airline, restaurant or other service establishment all of the capacity could be
filled with customers if the price were low enough. But the goal is always to ensure the
highest level of capacity utilization without sacrificing profits.
Flexing capacity to meet demand
A second strategic approach to matching demand and capacity focuses on adjusting or flexing
capacity. The fundamental idea here is to adjust, stretch and align capacity to match customer
demand. During periods of peak demand, the organization seeks to stretch or expand its
capacity as much as possible. During periods of slow demand, it tries to shrink capacity so
as not to waste resources.

Stretch existing capacity

The existing capacity of service resources can often be expanded temporarily to match
demand. In such cases, no new resources are added. Rather people, facilities, and equipment
are asked to work harder and longer to meet demand.

• Stretch time: It may be possible to extend the hours of service temporarily to

accommodate demand. A health clinic might stay open longer during flu season.
Retailers are open longer hours during the Christmas shopping season. And
accountants have extended appointment hours (evenings and Saturdays) before tax
deadlines.

• Stretch labour: In many service organizations, employees are asked to work longer
and harder during periods of peak demand. For example, consulting organizations
face extensive peaks and valleys with respect to demand for their services. During
peak demand, associates are asked to take on additional projects and work longer
hours. And front-line service personnel in banks, tourist attractions, restaurants and
telecommunications companies are asked to serve more customers per hour during
 busy times.

• Stretch facilities: Theaters, restaurants, meeting facilities and classrooms can

sometimes be expanded temporarily by the addition of tables, chairs, or other
equipment needed by customers. Or as in the case of a commuter train, a car can hold
a number of people seated comfortably or can “expand” by accommodating standing
passengers.

• Stretch equipment: Computers, telephone lines and maintenance equipment can

often be stretched beyond what would be considered the maximum capacity for short
periods to accommodate peak demand. In using these types of “stretch” strategies, the
organization needs to recognize the wear and tear on resources. The potential for the
inferior quality of service may go with the use. These strategies should thus be used
for relatively short periods in order to allow for later maintenance of the facilities and
equipment.

Align capacity with demand fluctuations

This basic strategy is sometimes known as a “chase demand” strategy. By adjusting service
resources creatively, organizations can in effect chase the demand curves to match capacity
with customer demand patterns. Time, labour, facilities, and equipment are again the focus,
this time with an eye toward adjusting the basic mix and use of these resources.

• Use part-time employees: In this case, the organization’s labour resource is being
aligned with demand. Retailers hire part-time employees during the holiday rush, tax
accountants engage temporary help during tax season, and tourist resorts bring in
extra workers during peak season. Restaurants often ask employees to work split shifts
(work the lunch shift, leave for a few hours, and come back for the dinner rush) during
peak mealtime hours.

• Outsourcing: Firms that find they have a temporary peak in demand for a service that
they cannot perform themselves may choose to outsource the entire service. For
example, in recent years, many firms have found they don’t have the capacity to fulfil
their own needs for technology support, Web design, and software-related services.
Rather than try to hire and train additional employees, these companies look to
firms that specialize in outsourcing these types of functions as a temporary (or
sometimes
long-term) solution.

Rent or share facilities or equipment

For some organizations, it is best to rent additional equipment or facilities during periods of
peak demand.

Sometimes organizations with complementary demand patterns can share facilities.

 Queuing Theory

Queuing theory refers to the study comprising a queue’s features, functions, and
imperfections. This mathematical study is very relevant in operations research since its
appropriate application helps in eliminating operational bottlenecks and service failures.

• Queuing theory is primarily the analysis of various aspects of a queue or waiting

line.
• Its analysis helps the businesses handle a queue more productively without hurting
the customers’ interest, optimizing cost and customer satisfaction.
• The theory involves multiple factors. It starts with the customer or entity entry, then
their movement, services rendered to them, and finally, the expression about the service.
• It helps in developing various queuing models. Examples of its application include a
virtual queue management system.

• Arrival: The process starts with the arrival of a single individual or a group of
individuals. They may come in different intervals, and it may influence the operations. Check
on the formation of the queue and note down any variation in the arrival. Track every aspect
of the process at this stage.
• Movement: This part mainly focuses on the movement of the queue and the
individual’s behavior. It’s like monitoring their activities and looking at whether the customer is
impatient or is habituated with the situation. Take feedback and see how they react to it.
Please note down where they want any changes. Many times, it is observed huge gatherings in
a small place tend to develop negative attributes towards a business. In such a case, the
customer might choose a different option. Adapt necessary arrangements or alternative
procedures to keep the customer and increase efficiency.
• Service: It is one of the vital parts of the process. If more time is taken to solve the
query, it will increase the line. In addition, it may cause boredom and frustration in
customers. A better understanding and application of the theory is important in reducing
the negative impacts of the long waiting line and long response time.
• Expression: It is the final step of the process. It is important to note that the person
leaving the queue makes an impression on the people standing next to him. An individual’s
negative feedback is bound to affect the business. Therefore, preference should be given to
every person and worked with full diligence. An ideal expression speaks a lot of the services
offered to him.
Let’s look into the basic queuing theory formula for a queuing system explained by
Little’s Law.

L= λ*W

Or

Number of items in the queue = Arrival rate × Average time spent in the queue

L: Average number of items or customers in the system,

λ: Average arrival rate,
W: Average time an item spends in the system

Another formula based on the queuing system model by Erlang derived from Little’s
Law is the following:

L = (λ – σ )/ μ

L: Average number of items or customers in the system (Length of the

queue)
λ: Arrival rate

σ: Dropout rate
μ: Departure rate

Application of Queuing Theory

The application of queuing theory is not inherent to any specific sector. It is

predominantly applied in industries like retail, logistics, and hospitality. The relevance
hit its peak during the Covid 19 pandemic period. Dealing with long lines and
resolving issues during the emergence of the COVID-19 pandemic is very hectic.
Businesses have introduced different queue management systems keeping public
safety as a priority. Its use is evident in the following cases where changes are made,
keeping in mind the customers’ safety.

Cloud change management

Cloud change management is the methodology and processes used by organizations

to plan and manage these changes. Through change management, you can protect
your company from some of the typical pitfalls and challenges associated with
moving to the cloud.
1. Cloud environments facilitate faster change processes
Cloud environments are designed for agility—facilitating speed when it comes to
change. Components and licenses are available on demand. Apart from financial
constraints, there is no delay that determines when you can spin up an environment
with the requisite capacity and software you need for your solution. This means that
changes can be made using a few clicks and operations, taking minutes rather than
days.

2. New solution development approaches require a shift from control to

enablement
Because approaches such as Agile and DevOps are now the mainstay of solution
development in the cloud, change management needs to move from a control
perspective to one of enablement. These new approaches are self-managed in nature;
as such, they repel any attempts to impose bureaucratic control—a hallmark of change
management. These approaches prefer iterative and regular deployment of new
features and modifications, which can be delivered
through continuous integration, delivery, and deployment processes. (No wonder the
ITIL 4 publication quickly evolved the name of the change management practice from
change control to change enablement.)

3. Change authority perspectives need adjusting

Traditionally, there are multiple change authorities dependent on the type of change.
A change of significant cost and risk could go all the way to the board for approval,
while a low-level change might just require the data center manager.

Cloud Service Architecture

Cloud Service Architecture is a process that defines how cloud services should be
delivered and managed. It includes the design of the service, the selection of the
appropriate delivery model, and the definition of operational processes and
procedures.

The goal of cloud service architecture is to ensure that cloud services are reliable,
secure, and meet the needs of the business. It also helps to ensure that costs are
controlled, and that service levels are met.

Cloud architecture requires close collaboration between IT and business units to

ensure that the business requirements are properly captured and that the service
meets their needs.

Cloud Architecture Layers

The layers of a cloud architecture include,

Application layer

Developers create and manage end users’ cloud-based applications at the application
layer.

Services layer

The services layer includes various services that are utilized by applications to power
their functionality.

Runtime layer

This layer provides a virtual machine’s runtime and execution

Storage layer

The storage layer is responsible for storing and managing data, including
structured and unstructured information.
Infrastructure layer

The infrastructure layer manages the underlying hardware infrastructure of the cloud,
including compute, network, and storage resources.

Security and management layer

The security and management layer ensures that data is protected from unauthorized
access and that the cloud environment is properly monitored and managed.

Other key components of a cloud architecture include,

Client layer

The client layer, which enables users to access applications and services from any
location,

Front-end layer

The front-end layer provides the user interface for accessing cloud services.

Back-end layer

The back-end layer of a cloud architecture handles all the behind-the-scenes work,
including managing data storage, network communication, and server resources. It
also includes the cloud controller, ensuring the entire system operates efficiently and
securely.