Virtual enterprise model for enabling cloud computing for SMMEs

Abstract

Although technology is a significant aspect for most businesses, it has also proven to increase productivity, reduce other costs and eventually improve a company's bottom line. Small, Medium and Micro enterprises (SMMEs) do not usually have adequate funds to acquire ICT infrastructure. They do not require the infrastructure on a daily basis. Therefore it is not economically viable for them to purchase their own infrastructure. It is for this reason that they have to take advantage of Cloud computing capabilities. Cloud computing is a style of computing in which dynamically scalable resources are provided as a virtualised service. The Cloud is an emerging concept derived from a service-centric view. All capabilities and resources of a Cloud are provided to users as a service to be accessed through the Internet without any knowledge, expertise, or control over the underlying technology infrastructure that supports them. Users are billed on a pay-per-use basis or through subscription. To provide on demand service, the Cloud adopts virtualisation, a service-oriented architecture, infrastructure scalability, the web and utility computing as the underlying concepts.This paper focuses on the implementation of virtual enterprises (VE), to enable SMMEs to respond quickly to customers' demands and market opportunities. The virtual enterprise model is based on the ability to create temporary co-operations and to realise the value of a short term business opportunity that the partners cannot (or can, but only to a lesser extent) capture on their own. The duration of the alliances vary depending on the actual goal. There are alliances made for a single business opportunity and which are dissolved at the end of such process, and long-term alliances that last for an indefinite number of business processes or for a specified time span.The model of virtual enterprise is made possible by means of virtualisation technology which is one of the building blocks of Cloud computing. To achieve a common goal, enterprises integrate resources, organisational models, and process models. Through a virtual business operating environment offered by Cloud computing, the SMMEs will be able to increase productivity and gain competitive advantage due to the cost benefit incurred.We propose a virtual enterprise enabled cloud enterprise architecture based on the concept of virtual enterprise at both business and technology levels. The business level comprises of organisational models, process models, skills, and competences while technology level comprises of IT resources.