Web 2.0 and Cloud Computing

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Web 2.0 and Cloud Computing

• Impact, Examples, and Analysis for
• Accountants and IT Audit Professionals
• Presented By
• Michael W. Pinch, CISA, CISM, PMP
• PricewaterhouseCoopers
• 2/20/2009

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Why are we talking Web 2.0?

• Web 2.0 has evolved as a major buzzword over
  the last year and is considered one of the most
  important concepts for the future of e-commerce
• Misunderstanding of what web 2.0 really is
• Companies are implementing web 2.0 solutions for
  internal productivity and external business
• Web 2.0 creates new (and unorthodox) revenue
  streams that we as accounting professionals need
  to understand

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Agenda

• Learn the true meaning of web 2.0
• Discuss some examples of 2.0 projects
• Code our very own 2.0 mashup project
• 2.0 revenue streams and profit models
• Impact on accounting and auditing
• Cloud Computing

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Defining Web 2.0

• Web 2.0 is the business revolution in the
  computer industry caused by the move to the
  Internet as a platform, and an attempt to
  understand the rules for success on that new
  platform.
• Super connectivity, broken down barriers, and
  creativity, not skill, that creates value

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Corporate Adoption
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Examples of Web 2.0

• Amazon API (Application Programming Interface)?
• Amazon opened up its internal databases to
  programmers with the intention of allowing them
  to create applications that will drive sales of
  Amazon products. Amazon has a profit sharing
  mechanism for developers whose applications
  result in sales.
• As the service became more popular, Amazon
  started adding additional features to their API
  tools to help developers create more rich
  applications.

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Amazon 2.0

• Great example of an Amazon application
• www.liveplasma.com
• Uses Amazon Those who purchased this also
  purchased that data to create a 3D world to link
  and recommend media purchases based on what you
  already like
• LivePlasma.com has expanded its system to use the
  same data to also drive sales to iTunes as well

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Demo LivePlasma.com

• www.liveplasma.com

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Payments
Insert Screenshot of ShootandHook.com's payment
page
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Mashups

• Enhancing Web 2.0 services by merging them (hence
  the term mashup), or extending them with custom
  programming
• Example www.shootandhook.com
• Example www.isacawny.org

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Corporate Projects

• Companies with traditional business models are
  looking at the technology to provide more
  valuable reporting and knowledge sharing
  capabilities
• Opening up data warehouses to internal users and
  allowing them to mashup any data they desire
• Often integrated with knowledge sharing tools
  such as Wiki to provide better insight into
  operations elsewhere in the company
• Ex Two individuals working on similar projects
  independently in different parts of the company

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Corporate Mashups
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Technology Examples

• Javascript
• Programmer gets javascript from web 2.0 provider
  and copies/pastes into site. Provider controls
  what it displays
• Example
• REST/XML
• Web 2.0 application makes request to data servers
  for structured data
• Web 2.0 application then processes that data
  however it chooses to create new functions and
  features
• Example

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Making our own Mashup

• Walking through the development process for ISACA
  Western New York site, www.isacawny.org
• Mashup page consisting of CareerBuilder jobs in
  the field of IT, Accounting, Auditing, and
  Security, mashed over top of a Google Map
• Example

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Popular APIs in Web 2.0

• Amazon
• Google Maps
• CareerBuilder
• Ebay
• CafePress
• MANY more...

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Accounting Treatments

• Case Internet Advertising Company
• Provides javascript ads to websites
• Advertiser buys a credit to run their ads with
  the company, on a pay-per-click basis
• Revenue can only be recognized when the ad has
  been priced, placed, clicked on, displayed, and
  screened for fraud.
• Each ad may be as little as .01 or as much as
  5.00-20.00
• Auditing this process takes extensive process
  analysis and testing

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Bottom Line

• Auditing these companies requires deep
  understanding of automated processes, control
  points, and testing of all potential process
  flows.

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Cloud Computing

• Cloud computing is a buzzword commonly used
  alongside Web 2.0, but is not necessarily linked
• Cloud computing is the centralization of
  computerized resources, with the provisioning of
  tools to access these resources
• Cloud types could include types of data, data
  centers themselves, or just processing power
• Very much bleeding edge and still evolving

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Cloud Examples

• Amazon Elastic Compute Cloud (EC2)?
• This is a centralized storage engine of virtual
  machines, mainly operating systems providing web
  applications or data
• Called elastic because you can dynamically
  increase or decrease computing power, and/or
  increase or decrease number of servers being used
• Example You run an E-Commerce business and you
  know that the lunch hour on M-F is peak traffic
  for your site. You can automatically stand up
  redundant application servers to serve the
  additional requests and take them down after the
  lunch hour. You only pay for what you use!

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EC2

• Pay by the hour
• Pre-configured Software available such as Sun or
  Oracle systems
• Different virtual machine types available
• High Storage
• High Processing Capacity
• Prices range from .10.80/hour, or
  72600/month

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Google Data Cloud

• Google is currently sponsoring computer science
  programs to teach programming for the data cloud
• Encourages students to design programs that do
  not rely on local resources

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Amazon S3

• Simple Storage Solution
• Another Amazon cloud service
• Dedicated to providing a simple, robust, and
  powerful service for mass data storage and
  retrieval
• Pay by the GB
• 0.150 per GB first 50 TB / month of
  storage used
• 0.140 per GB next 50 TB / month of storage
  used
• 0.130 per GB next 400 TB /month of storage
  used
• 0.120 per GB storage used / month over 500
  TB

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Potential Effect?

• How much longer will this be cost effective?
• Insert Photo of Old Data Center

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Questions / Comments

• Sources / Influences
• PwC Technology Forecast Summer 2008
• www.amazon.com
• www.shootandhook.com
• www.isacawny.org
• www.liveplasma.com
• Web 2.0 A Strategy Guide O'Reilly