Cloud economics
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Cloud economics

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What is Microsoft's cloud and why do the new economics of Microsoft's cloud make sense for businesses today

What is Microsoft's cloud and why do the new economics of Microsoft's cloud make sense for businesses today

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    Cloud economics Cloud economics Presentation Transcript

    • Economics of the cloud
      Slide 1
      Michel N’Guettia
      Business Group Lead
      micheln@microsoft.com
    • TransformatiE van IT
      Today | Cloud
      2000s | Web
      1990s | Client / Server
      1970s and 80s | Mainframe
    • HOW MICROSOFT VIEWS THE CLOUD
      Nieuwe Principe's
      Hoge beschikbaarheid
      Betalen naar gebruik
      Schaalbaarheid
      Multi-tenancy
      Keuze
      Locatie
      On premises
      Off premises
      Infrastructuur
      Heterogeneen
      Homogeneen
      OpEx
      CapEx
      Business model
      Lease/Rented
      Koop
      Eigendom
      3e partij
      Zelf
      Management
    • Supply side economics of scale
      Larger datacenters have almost 50% lower TCO per server
      ANNUAL TCO/SERVER DECLINES W/SCALE
      MAIN DATA CENTER COST BUCKETS
      Server hardware costs (~45%)
      Facility & operations (~25%)
      Hardware labor costs (~15%)
      Power costs (~15%)
      47% Savings
    • De Microsoft Cloud
    • De Microsoft Cloud
      Microsoft has more than 10 and less than 100 DCs worldwide
      Amsterdam
      Dublin
      Chicago
      Quincy
      Japan
      Hong Kong
      Boydton
      Des Moines
      San Antonio
      Singapore
      Multiple global CDN locations
      "Datacenters have become as vital to the functioning of society as power stations."
      The Economist 
    • Sustainable economics
      Improved Efficiency  Energy savings and Sustainable Environment
      Reduced TCO for supply of cloud services
      Relentless focus on PUE reduction
      Lower cost passed on to customers
      Competitive Advantage
      Less Raw Materials
      Less Wasted Power
      Less Idle Equipment
      Less e-Waste
      Less Carbon
      Less Empty Space
      Satisfied Customers
      PUE Ojective: 1.125
    • shift to ultra-modularity
      Pre-manufacture the entire datacenter
      Low initial capital investment
      ITPAC  Modular Server Building Block
      Airside Economization PAC with adiabatic cooling
      Extremely efficient  PUE of 1.05 - 1.2
      400 to 2500 servers at a time
    • DEMAND SIDE ECONOMIES OF SCALE
      Average server utilization rates are 5-10%
    • UNCERTAIN GROWTH
      Uncertainty about future demand requires overprovisioning of resources. Pooling uncertainty dramatically reduces this inefficiency
      Server Demand
      Overprovisioning
    • MULTI-TENANCY benefits
      Multi-tenant applications share resources between users and organizations
      SINGLE-TENANT APPLICATION
      Client
      Client
      Instance
      Instance
      Instance
      Client
      • Each client has a dedicated instance
      • Instances separately administrated
      • Dedicated resources
      • Costs grow with scale
      Admins
      Admins
      Resources
      Resources
      Resources
      Admins
    • MULTI-TENANCY benefits
      Multi-tenant applications share resources between users and organizations
      MULTI-TENANT APPLICATION
      Client
      Client
      Client
      Instance
      Instance
      Instance
      • One instance for all clients
      • One group of administrators
      • Fixed resources are shared
      • Costs go towards zero with scale
      Resources
      Resources
      Resources
      Admins
      Admins
      Admins
    • Cloud operating system
      Multi-tenant Cloud OS
      Developer ExperienceUse existing skills and tools
      Relational data
      Management
      Compute
      Storage
      Flexible APIs
      Data Market Marketplace
      Connectivity
      Access control
      Management
      Information Marketplace
      Reporting & BI
      Billing & Payments
      Marketplace
      Infrastructure
      Data Management
      Connectivity
    • PUBLIC vs. PRIVATE CLOUDS
      CLOUD SCALE BENEFIT
      40x cost benefit for SMBs
      Private Cloud
      Public Cloud
      10x cost benefitfor Enterprises
      Public Cloud Cost at Scale
    • Service models
      Service Categories
      (On-Premise)
      Infrastructure
      (as a Service)
      Platform
      (as a Service)
      Software
      (as a Service)
      You manage
      You manage
      Applications
      Applications
      Applications
      Applications
      Data
      Data
      Data
      Data
      Managed by vendor
      Runtime
      Runtime
      Runtime
      Runtime
      Managed by vendor
      You manage
      Middleware
      Middleware
      Middleware
      Middleware
      Managed by vendor
      O/S
      O/S
      O/S
      O/S
      Virtualization
      Virtualization
      Virtualization
      Virtualization
      Servers
      Servers
      Servers
      Servers
      Storage
      Storage
      Storage
      Storage
      Networking
      Networking
      Networking
      Networking
      Lower Cost & Higher Agility
      Higher Control & Higher Cost
    • PLATFORM
      BUSINESS USERS
      BUSINESS APPS
      CLOUD SERVICES
      BUSINESS APPS
      COLLABORATION
      COMMUNICATIONS
      IDENTITY
      DESKTOP MGMT
      PLATFORM
      DATABASE
      PRODUCTIVITY
      ON-PREMISES & HOSTERS
      CLOUD SERVICES FOR BUSINESSES
    • The Value of Cloud Computing
      Source: http://www.mckinseyquarterly.com/Business_Technology/BT_Strategy/How_IT_is_managing_new_demands_McKinsey_Global_Survey_results_2702?gp=1
    • THE HORSELESS CARRIAGE SYNDROME
    • THE HORSELESS CARRIAGE SYNDROME
      "If I had asked my customers what they wanted, they would have said a faster horse."
      Customers
      - Henry Ford
      “The horse is here to stay but the automobile is only a novelty, a fad.”
      Analysts
      - Bank analyst
      …designed whip holders into the automobiles for the first 6-7 years, even though there was no horse…
      Engineers
      “There will never be more than 1 million units because of the limited availability of good drivers”
      Forecasters
      - Daimler Company
      (there were 8 million by 1918, over 600 million today)
    • © 2010 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries.
      The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentation. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.
    • DEMAND SIDE Economies of scale
      Time of Day Variance
      Query Volume