A virtual enterprise model for enabling cloud computing for SMMEs

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University of Zululand
Information Technology (IT) is a major aspect of most businesses. It has proven to increase productivity, reduce costs and improve a company's bottom line. This is also the case for Small, Medium and Micro Enterprises (SMMEs), which are usually family-owned businesses, and due to their nature they cannot afford to purchase ICT (Information and Communication) infrastructure. It is therefore not economically viable for SMMEs to acquire their own ICT infrastructure. However, they have the option of taking advantage of cloud computing capabilities instead. In cloud computing, dynamically scalable resources are provided as a virtualised service. Cloud computing is patterned after a utility business model where you use only what you require. The cloud is an evolving concept derived from a service-centric point of view. All the resources and capabilities of a cloud are offered to users in the form of service that can be accessed through the Internet. Users are billed on a pay-per-use basis or through subscription. The cloud adopts virtualisation, a service-oriented architecture, infrastructure scalability, the web and utility computing as the underlying concepts to provide on-demand services. This research work is an attempt to use the virtual enterprise (VE) concept to enable SMMEs to respond quickly to market opportunities and customer demands. Cost is a key constraint for African users of technology, thus our business model addresses such challenges. The largest percentage of users of the proposed VE model use mobile devices, because its design addressed challenges associated with generic cloud and mobile cloud. These are some of the ways in which the design of the proposed VE model is atypical. Our VE-enabled cloud enterprise architecture for SMMEs is evaluated against the Amazon EC2 pricing model to prove that our pricing model is more suitable for SMMEs. This model is based on the realisation that it is not economically viable for SMMEs to acquire their own private cloud infrastructure or even subscribe to public cloud services as a single entity. The pricing model obtained from our proposed business model shows the benefits that are derived from using the VE cloud model over subscription to a public cloud as a single business enterprise. The pricing structure of our VE cloud model is up to 17.82 times more economical compared to the equivalent Amazon EC2 instance type pricing model. The results obtained show the benefits that are derived by integrating the VE alliance concept with the cloud computing concept. This is shown by evaluating our architecture through one of the open access cloud platforms.
Submitted in partial fulfilment of the requirements for the degree of Master of Science in Computer Science in the Department of Computer Science in the Faculty of Science and Agriculture at the University of Zululand, South Africa, 2014.
Cloud computing