Section C Operating Online

Question 1

Question: Evaluate the impact of cloud computing on businesses, considering benefits and risks. Structure:

Define cloud computing

Explain advantages: flexibility, cost savings

Explain risks: security, dependency

Provide examples

Conclude

Answer 1

Mark Scheme for the Question

Total Marks: 20

1. Definition of Cloud Computing (3 Marks)
   
   • Clear and accurate definition of cloud computing (2 marks)
   • Mention of key characteristics (e.g., on-demand access, resources, internet-based) (1 mark)
2. Explanation of Advantages (6 Marks)
   
   • Explanation of flexibility with examples (3 marks)
   • Explanation of cost savings with examples (3 marks)
3. Explanation of Risks (6 Marks)
   
   • Explanation of security risks with examples (3 marks)
   • Explanation of dependency risks with examples (3 marks)
4. Examples to Support Claims (2 Marks)
   
   • Relevant examples illustrating both benefits and risks (2 marks)
5. Conclusion (3 Marks)
   
   • Summary of key points discussed (1 mark)
   • Personal evaluation of the overall impact of cloud computing on businesses (2 marks)

Example Answer

Definition of Cloud Computing:
Cloud computing refers to the delivery of computing services over the internet, allowing businesses to access and store data on remote servers rather than on local machines. Key characteristics of cloud computing include on-demand access to a range of services such as storage, processing power, and applications, as well as scalability and the ability to pay for what you use.

Explanation of Advantages:
One major advantage of cloud computing is its flexibility. Businesses can easily scale their resources up or down according to fluctuating needs. For instance, a retail company may require additional server capacity during peak shopping seasons, which can be quickly adjusted through a cloud service without the need for significant physical infrastructure investment.

Another significant advantage is cost savings. By utilizing cloud services, businesses can reduce or eliminate the costs associated with purchasing and maintaining on-premises hardware. For example, small startups can leverage platforms like Amazon Web Services (AWS) or Google Cloud Platform (GCP) to access advanced technologies without incurring high upfront capital expenditures. This pay-as-you-go model allows for predictable budgeting and reduced financial risk.

Explanation of Risks:
Despite its advantages, cloud computing also presents several risks, particularly concerning security. Data stored in the cloud can be vulnerable to breaches, as sensitive information is often targeted by cybercriminals. For example, the 2020 data breach at a major provider exposed sensitive customer information, raising concerns about data integrity and confidentiality.

Another significant risk is dependency on cloud service providers. Businesses may rely heavily on their chosen provider for critical operations, which can lead to issues if the provider experiences downtime or service disruptions. An example is the widespread outages experienced by cloud giant Microsoft Azure in early 2021, which impacted numerous businesses that depended entirely on their services for operations.

Examples to Support Claims:
To illustrate the advantages, a company like Dropbox offers flexible storage solutions for users. It can expand its storage capacity based on individual user needs without requiring long-term commitments. Conversely, the security risk of cloud computing was highlighted in the 2019 Capital One data breach, where a misconfigured firewall led to the exposure of over 100 million customer records.

Conclusion:
In conclusion, cloud computing has a significant impact on businesses, providing essential benefits such as flexibility and cost savings while also posing risks related to security and dependency. Businesses must carefully evaluate these aspects when considering the adoption of cloud solutions. Overall, while the advantages of cloud computing can lead to enhanced efficiency and lower costs, it is crucial for organizations to implement robust security measures and assess their dependency on cloud services to mitigate potential risks effectively.