Cultural Differences in Managing Cloud Computing Service Level Agreements

Cultural Differences in Managing Cloud Computing Service Level Agreements

Stefan Balduf (University of Bayreuth, Germany), Tina Balke (University of Bayreuth, Germany) and Torsten Eymann (University of Bayreuth, Germany)
DOI: 10.4018/978-1-61520-883-8.ch001
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Software as a service and cloud computing are new buzzwords in the Internet-based economy. Their idea is to provide software, computing and storage capacity in large, but yet unknown numbers. The legal basis of offering such services is provided by service level agreements (SLAs). In a global economy, these SLAs are often made between companies based in different countries, thus between individuals with different cultural backgrounds. This study explains to what extent, how and why the management of SLAs may differ due to cultural differences among participants. Starting from Hofstede’s seminal work, expert interviews show that some of his findings still hold in the cloud computing world, while others have to be revised.
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With the ongoing evolution of the Internet and the steady increase of computational power, information technology (IT) and its importance have risen dramatically within the last decades. This changed the business world (Weiss, 2007), and in addition leads to a discussion whether, how and why this technological development has an impact on social phenomena, especially culture (Held, 2004). Several books and articles have been published predicting a steady globalisation of culture (Bolton, 1995). However, some authors argue that despite this increase of IT and the resulting coalescence of the world, the assumption that cultural borders are dissolving is wrong. On the contrary, they claim cultural aspects to become even more important with respect to IT and its usage (Lash & Lury, 2007).

Following on this discussion, this book chapter presents the outcome of an empirical qualitative survey, which investigates the cultural differences in IT. We concentrate on one specific area of application that is not only of a high relevance with regard to future IT trends, but in addition exhibits a high degree of standardization coupled with an enormous potential for cultural adaptations: service level agreements (SLAs) for IT services in the context of cloud computing.

The term “cloud” can be seen as a high-level metaphor for the Internet and an abstraction for the complex technical infrastructure it conceals. It is a style of computing in which IT-related capabilities are provided “as a service”, allowing users to access technology-enabled services from the Internet (“in the cloud”) without knowledge of, expertise in, or control over the technology infrastructure that supports them (Eymann, 2008). The “services” that can be accessed thereby reach from mere infrastructural components like CPU or disk space (Infrastructure as a service – IaaS) over software applications (Software as a Service – SaaS) to whole platforms or portals (Platform as a Service – PaaS)1. This shows the broadness and potential of the cloud computing concept that has been identified be large IT companies such as Google, IBM, or Amazon for example, who are driving forces in the cloud context. One of the most cited definitions of cloud computing was proposed by Buyya et al. who explain the term as follows:

A Cloud is a type of parallel and distributed system consisting of a collection of interconnected and virtualised computers that are dynamically provisioned and presented as one or more unified computing resources based on service-level agreements established through negotiation between the service provider and consumers. (Buyya, Yeo, & Venugopal, 2008, p. 2)

Thus, in addition to the existing technological basis and in order for cloud computing to be relevant, a common communicational and contractual basis needs to be ensured. This is done with service level agreements (SLAs) that are a technologically standardized analogy of a service contract, where the level of service is formally defined. SLAs enable providers to specify their service offers formally, which generates planning reliability for all transaction participants. A cloud computing SLA can for example contain a specified level of service, support options, enforcement or penalty provisions for services not provided, a guaranteed level of system performance relating to downtime or uptime, a specified level of customer support as well as information on what software or hardware will be provided and for what fee (Ludwig, 2003). A SLA is defined as follows:

A service level agreement is an agreement regarding the guarantees of a web service. It defines mutual understandings and expectations of a service between the service provider and service consumers. The service guarantees are about what transactions need to be executed and how well they should be executed. (Jin, Vijay, & Sahai, 2002, p. 3)

Key Terms in this Chapter

Expert (in Expert Interview): An expert is a person with a superior and comprehensive knowledge and/or skill in a specific well distinguished domain. In the case of this survey, the experts are top management representatives working for a multinational computer technology and IT consulting corporation in the area of high performance computing (especially cloud computing SLAs).

Cloud Computing: Cloud Computing is a term which is rooted in the area of computing architectures. It describes a concept which is closely linked to the grid-computing technology, however in contrast to grid-computing which is used in a more technical context, cloud computing describes an architectural concept where computational services in form of applications, platforms, data and infrastructures are no longer situated on local systems but can be accessed on demand in a far-away cloud of interconnected computers and servers. To access this remote system, which connects supplier and consumer, as well as entities of different clouds run by different providers, defined interfaces or standard applications such as a web browser are used with the internet functioning as the access base (Hayes, 2008). In cloud computing three possible forms of the cloud can be distinguished, depending on what form of service is offered. The first one is Software as a Service (SaaS). As the name implies, SaaS-providers focus on offering software to their customers, who neither know about the underlying infrastructure, nor do they gain control over it. The second form is named Platform as a Service (PaaS), a further development of the SaaS-model, where PaaS-providers offer computing platforms or portals. The idea behind PaaS is that developers don’t write their own home page etc. running on someone else’s servers. Instead, they programme web-based software applications, which they can then operate without having to buy, set up and maintain servers. These, on the one hand, streamline the access to software and, on the other hand, facilitate combinations of services, so called mash-ups. In addition, PaaS’ platforms and portals drastically affect software service sales through their network effects. As a counterpart to SaaS on the software side, the third form of the cloud is Infrastructure as a Service (IaaS). IaaS-providers sell storage or processing capacities to their customers, which are placed at the disposal of the higher layers SaaS and PaaS. A well-known example of IaaS is Amazon’s Elastic Compute Cloud (EC2), where customers can buy instances, paying on an hourly basis.

Case (in Multiple Case Study): A case is a single instance or event of in-depth, longitudinal examination conducted for acquiring scientific knowledge.

Culture: Culture is a central concept of human life for which a nearly unmanageable amount of definitions exists in literature, ranging from very wide views (Tayeb, 2000, p. 311) to more specific ones as provided by Newman & Nollen. However, as focusing on Hofstede and his 5-D Model in this book chapter, in the work presented here, we use Hofstede’s definition, who sees culture as “the collective programming of the mind that distinguishes the members of one group or category of people from another” (Hostede, 2002, p. 9). The basis of his definition of culture is a pyramid of mental programming. This construct divides culture into three levels. The base of the pyramid is human nature, i.e. what is inherent to all humans. It is universal. Culture forms the second layer, which is something that is learned — akin to “mental programming” — and therefore is not universal, but specific for a certain group or category. Each individual’s personality constitutes the pyramid’s top. Personality is partially learned as well as partially inherited. In other words, it is influenced by both of the lower layers. Analogous to IT, human nature is the operating system, which determines the physical and psychical functions of a human being. Culture then is determined as the software learned in one’s social environment, which determines how for example, the emotion “fear” is expressed properly in a given socio-cultural context. Summarizing this, in general culture influences people’s thought patterns. These patterns are reflected in the meaning humans attach to various aspects of life and which are solidified in the institutions of a society. However, this does not imply that every individual of a particular society is programmed in the same mode. For that reason, statements about culture may not be seen as invariably true. Rather, they are general and relative and not assignable to every individual of a culture the same way.

Trust: The term trust in this work is defined as a “social institution that enables the involved parties to reduce the complexities of their relationship”. Thereby trust consists of two components: trusting behaviour and trusting expectation. In general, trusting behaviour stands for actions, which lead to increased vulnerability of oneself to another; whose behaviour is not under one’s control. This trust must be instilled despite the possible detriment one might receive if the other abuses that vulnerability. This risk may outweigh the possible benefits if the partner behaves in a non-opportunistic way (Zand, 1972, p. 230). In our economical context the trusting action represents the voluntary delivery of risky advance performances by the provider, without gaining full information about the business partner and abstaining from explicit contractual security and controlling measures. Trusting expectation means that the party receiving this trust is expected to act in an honest way. In other words, the party providing the advance performances expects its contracting party to not exhibit opportunistic behaviour (Ripperger, 1998, p. 60).

Service Level Agreement (SLA): An SLA is a part of a service contract, i.e. it characterises the contractual interface between a service consumer and a service provider for recurring services. The goal of an SLA is to promote service transparency by recording mutual understandings and expectations of about services, priorities, responsibilities, guarantees and warranties, including specific service level objectives (SLO) such as the service scope, the delivery and reaction time etc.

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