2.Cloud Value Proposition

Enterprise Cloud Computing

By Dr. Atanu Rakshit

Email: [email protected] [email protected]


• Text Book: – ‘Cloud Computing Bible’ by Barrie Sosinsky, 2/e,

Wiley Publication, 2013

• Reference Material: – ‘Building Applications in the Cloud’ by Christopher

M. Moyer, Pearson, 2013 – ‘Cloud Computing – Automating the Virtualized

Data Center’ by Venkata Josyula, Malcolm Orr and Greg Page, Pearson, 2012

– ‘Cloud Computing Implementation, Management and Security’ by John W. Rittinghouse and James F. Ransome, CRC Press, 2010

• Sessions Plan – Introduction to Cloud Computing – Assessing the Value Proposition – Cloud Computing Architecture – Service and Application Types – Abstraction and Virtualization – Capacity Planning and Resource Optimization – Understanding Service Oriented Architecture – Moving Applications and Application Framework in Cloud – Cloud Security – Mobile Cloud Computing


Cloud Value Proposition


Cloud Value Propositions

• The Main attributes like scalability, elasticity, low barrier to entry, and a utility type of delivery are completely change how applications are created, priced, and delivered

• It shifts capital expenditures into operating expenditures.

• Decoupling growth from cash on hand or from requiring access to capital

• Service Level Agreements (SLAs) are an important aspect of cloud computing


• Cloud computing presents new opportunities to users and developers of a shared multitenant utility.

• The ability to access pooled resources on a pay-as-you-go basis provides a number of system characteristics that completely alter the economics of information technology infrastructures

• Any application or process that benefits from economies of scale, commoditization of assets, and conformance to programming standards benefits from the application of cloud computing.

• The various service models benefits the users of varies type


• Profit: The economies of scale can make this a profitable business.

• Optimization: The infrastructure already exists and isn't fully utilized.

• Strategic: A cloud computing platform extends the company's products and defends their franchise.

• Extension: A branded cloud computing platform can extend customer relationships by offering additional service options.


• Presence: Establish a presence in a market before a large competitor can emerge.

• Platform: A cloud computing provider can become a hub master at the center of many ISV's (Independent Software Vendor) offerings.


• Due to its scalability, cloud computing provides a means to do high-performance parallel batch processing that wasn't available to many organizations before.

• The relative ubiquity of cloud computing systems also enables emerging classes of interactive mobile applications.

• Cloud computing also can provide access to multiple data sets that can support layered forms of information, the types of information you get when you view a mashup

Early Adopters and New Applications

• Messaging and team collaboration applications

• Cross enterprise integration projects • Infrastructure consolidation, server, and

desktop virtualization efforts • Web 2.0 and social strategy companies • Web content delivery services • Data analytics and computation

Early Adopters and New Applications

• Mobility applications for the enterprise • CRM applications • Experimental deployments, test bed labs, and

development efforts • Backup and archival storage

Challenges and Obstacles Subject Area Captive Cloud Challenge

Compliance

Policy-based

Proprietary

Compliance to laws and policies varies by

geographical area. This requires that the cloud

accommodate multiple compliance regimes.

Data Privacy

Bounded

Shared with cloud

To ensure data privacy in the cloud, additional

security methods such as private encryption,

VLANs, firewalls, and local storage of sensitive

data is necessary.

Monitoring

Variable but

under control

Limited

For private systems, any monitoring system the

organization wishes to deploy can be brought to

bear. Cloud computing models often have limited

monitoring because it is vendor-defined.

Challenges and Obstacles Subject Area Captive Cloud Challenge

Security

Restricted

Federated

The different trust mechanisms require that applications

be structured differently and that operations be modified

to account for these differences.

Service Level

Agreements (SLAs)

Customized

Cloud specific

Cloud SLAs are standardized in order to appeal to the

majority of its audience. Custom SLAs that allow for

multiple data sources are difficult to obtain or

enforce.Cloud SLAs do not generally offer industry

standard chargeback rates, and negotiations with large

cloud providers can be difficult for small users. Business

risks that aren't covered by a cloud SLA must be taken

into account. Software

Stack

Customized

Commoditized

The cloud enforces standardization and lowers the ability

of a system to be customized for need.

Measuring Cloud Computing Cost

The cost of a cloud computing deployment is roughly estimated to be CostCLOUD = Σ(UnitCostCLOUD x (Revenue – CostCLOUD)) where the unit cost is usually defined as the cost of a machine instance per hour or another resource

Depending upon the deployment type, other resources add additional unit costs: storage quantity consumed, number of transactions, incoming or outgoing amounts of data, and so forth. Different cloud providers charge different amounts for these resources

Measuring Cloud Computing Cost

The costs associated with the cloud model are calculated rather differently. Each resource has its own specific cost and many resources can be provisioned independently of one another. In theory, therefore, the CostCLOUD is better represented by the equation: CostCLOUD = 1nΣ(UnitCostCLOUD x (Revenue – CostCLOUD))INSTANCEn +1nΣ(UnitCostCLOUD x (Revenue – CostCLOUD))STORAGE_UNITn +. 1nΣ(UnitCostCLOUD x (Revenue – CostCLOUD))NETWORK_UNITn + … In practice, cloud providers offer packages of machine instances with a fixed relationship between a machine instances, memory allocation (RAM), and network bandwidth. Storage and transactions are unbundled and variable.

Quality of Service

• Everything in cloud computing is delivered as service

• So quality of service is inevitable • QoS has multiple aspects such as:

– Response time – Throughput – Availability – Reliability – Security

QoS requirements for a Cloud - ideal

• The QoS must system be able to manage several simultaneous services with a specific response time limitation for each service

• The QoS system must supply service differentiation in the service provider to the consumer – consumer category

• The QoS system must support the grouping of interactions in sessions.

• The QoS system should not require modification in the system software of the servers

QoS requirements for a Cloud - ideal

• The QoS system should be easy to configure • The QoS system must be scalable to operate

in both a single server and a cluster of servers • The QoS system must provide protection

against overloads and low utilization • The QoS system may support dynamic

negotiation of parameters

Service Level Agreement (SLA)

• A Service Level Agreement (SLA) is the contract for performance negotiated between client and a service provider.

• Today with the advent of large utility-like cloud computing providers, most SLAs are standardized until a client becomes a large consumer of services.

• Some SLAs are enforceable as contracts, but many are really agreements that are more along the lines of an Operating Level Agreement (OLA) and may not have the force of law

Service Level Agreement, SLA

• The SLA is a contract negotiated and agreed between a customer and a service provider

• Service provider is required to execute service requests from a customer within negotiated quality of service requirements for a given price

• Due to variable load, dynamically provisioning computing resources to meet an SLA and allow for an optimum resource utilization will not be an easy task

Service Level Agreement (SLA)

• Availability of the service (uptime) • Response times or latency • Reliability of the service components • Responsibilities of each party • Warranties

Industry Relevance

IT has fallen behind the evolution curve of the business…

* PricewaterhouseCoopers’ 11th Annual Global CEO Survey

• Business Agility is Threatened: –Of 1,150 global CEO’s, 76% say the ability to adapt will

be a key source of strategic advantage in 2009* • Complexity is growing:

–CIO’s see complexity as a threat to the very survival of their business

• Operation Costs Exceed HW Costs: –CEO’s view growth as a key focus area –Operational costs far exceed the budgets for new

hardware

…resulting in serious challenges for IT today…

IT has been driven by cost instead of value!

•Many applications are proprietary, slow, siloed & exhibit single points of failure but are too expensive to remand

•Complex, heterogeneous infrastructure create resource & data silos and recovery nightmares

•Enterprise data is largely distributed and rife with errors • Infrastructure resources are highly underutilized

–PCs/Servers < 10% –Storage < 50%

•Change is a cost prohibitive and time consuming process

Why does the market care - Drought and dry fields

Importance

• Increases business responsiveness • Accelerates creation of new services via rapid prototyping

capabilities • Reduces acquisition complexity via service oriented approach • Uses IT resources efficiently via sharing and higher system

utilization • Reduces energy consumption • Handles new and emerging workloads • Scales to extreme workloads quickly and easily • Simplifies IT management • Platform for collaboration and innovation • Cultivates skills for next generation workforce

Why should we care - The gathering storm

Possibilities of Cloud Computing

• Next evolutionary step in computing with >30yrs of momentum

• Requires a new way of thinking, new processes, new skills, and new tools

• Enables the business to work around IT departments who are seen as part of the problem

• Companies will reduce IT operating costs and improve agility • Clients should consider cloud computing as part of their

blueprint refresh, application rationalization, and outsourcing activities

• Client should investigate cloud strategies with their systems management, application and outsourcing vendors

What is the Cloud Computing opportunity?


What IT must do to compete

• Adopt a service provider mentality • Inform the business without involving them in issues • Realign teams to present a unified relationship model to customers

People

Process

Technology • Pool technology resources • Manage the resources to deliver the required service • Automate wherever possible • Incorporate technology resources beyond the company data center

• Provide services with appropriate service levels • Support the user from their point of view • Respond quickly, act efficiently


What disruptions will Cloud cause?

• Alignment of roles & responsibilities to service delivery

• Staff training • Reorganizatio

n to adopt a service focus

• Update of success metrics

• Knowledge management

• Utility Computing architecture

• Identity management

• Data security • Data

management • Systems

management strategy

• Vendor evaluation & implementation

Cloud Computing is a disruptive technology which will transform how IT does business

People Process Technology Strategy Structure

• Project planning

• Capacity planning and compute resource procurement

• Application prioritization

• Developing & managing service levels

• Technology Adoption (PoC, Pilot, Deploy)

• End-user support

• Defining a Cloud enabled IT strategy

• Budgeting and project funding

• Standards and guidelines

• Reference architectures for SaaS, PaaS, and IaaS

• Enterprise architecture

• Governance model

• Defining and implementing controls

• Identifying audit procedures


What new capabilities/models will IT gain?

• Ability to overflow workload to external compute resources as needed when internal resources are maxed out

• Adopting in-network redundancy with automated recovery to eliminate disaster recovery risks and costs

• Data as a Service built on the concepts of Master Data Management and the Semantic Web

• Rapid deployment (SaaS) or development (PaaS) to meet the immediate needs of the business

• New models and tools for improving & evolving internal IT

Additional capabilities will emerge as more Cloud Computing gains momentum


Cloud Capabilities

Cloud Computing Success Stories •GE - Global procurement hosting 500k suppliers and 100k users in six languages on SaaS platform to manage $55B/yr in spend •Bechtel - Reduced infrastructure cost by 30% in part by achieving 70% server utilization •Washington DC - Google Apps used by 38k employees reducing costs to $50/user per year for email, calendaring, documents, spreadsheets, wikis, and instant messaging •Eli Lilly - Using Amazon Web Services can deploy a new server in 3min vs 50days and a 64-node Linux cluster in 5min vs 100days •NASDAQ - Using Amazon Storage to store 30-80GB/day of trading activity

Cloud cover

Others leaders include Hasbro, ESPN, Major League Baseball, New York Times and British Telecom

Cloud Computing Success Stories Cloud cover

New services will emerge Cloud cover

• Data Warehousing & Business Intelligence as a Service • Today companies are challenged to find and build in-house expertise in both

technologies, and expertise directly correlates with value. A service would obviate the large investment in people and technology focusing expenditures on results

• Business Process Outsourcing as a Service • Outsourcing business processes requires adoption for the outsourcer or

migration for the customer. Service enablement obviates the need for platform changes focusing instead on pushing data through the process in a seamless stream

• Business Continuity & Disaster Recovery as a Service • Clouds break the link between applications and hardware enabling lightening

fast responses to outages and disasters without disruption. Billions of dollars spent provisioning “just in case” environments can be saved while improving service.

Where To Start

As part of an IT transformation adopting cloud would look something

like this… 1. Rationalize infrastructure & applications

– Reduce the complexity by identifying redundant, outdated, or underperforming components and consolidate servers.

2. Define the cloud architecture – Create a cloud architecture leveraging SOA for applications, utility

computing for infrastructure, and ESB for integration with appropriate standards, governance, and reference architectures

3. Build cost profiles for each application – Identify the costs to support, update, and operate each application on a

per user basis 4. Identify and assess SaaS alternatives

– Target SaaS alternatives offering a better economic model than internal hosting. If not available target SOA alternatives.

…and this… 5. Migrate infrastructure to a cloud bursting model

– Further consolidate servers from just-in-case to average load provisioning using the internal pool of servers left over or an external IaaS provider to handle peak loads

– Identify systems management gaps and discuss with vendors 6. Build new applications on a SOA foundation

– Applications requiring significant development or new applications should be constructed on a SOA foundation with a particular focus on application virtualization

7. Create cloud enablement roadmap for retained applications – Define a development roadmap which migrates retained applications to a

cloud model through outsourcing (SaaS), replacement (SaaS or SOA), or development (SOA).

Where do we start - the weather forecast

…but there are many onramps to Cloud Computing:

• Driver • Quickly gain new

capabilities • Select best in

class point solutions with already well defined integration methods (EDI)

• Requires • Nothing • Challenges • Governance • Data security,

privacy, and ownership

• 3rd party SLA’s • Integrated

support

• Driver • Development

of external facing web solutions

• Requires • Understanding

of SaaS application and data models

• Challenges • Integration to

backend systems

• Data security, privacy and ownership

• 3rd party SLA’s

External SaaS External IaaS PaaS Internal IaaS Internal SaaS

Driver

• Cloudbursting – overflowing from internal to external compute resources

• Storage on demand

• New compute intensive services

Requires

• Scheduler to move jobs to cloud

• Internet bandwidth

Challenges

• Security

Driver

• Agility

• Maximize efficiency

• Maximize ROA

Requires

• Server virtualization

• Service level agreements

• Automated infrastructure provisioning and orchestration

• Integrated systems management suite

• Challenges

• Application silos

Driver

• Agility

• Maximize reuse

• SOA

Requires

• Internal IaaS

• Application virtualization

Challenges

• Application monitoring tools

2.Cloud Value Proposition

Documents

Transcript of 2.Cloud Value Proposition