Cloud Computing Potentials
Discussion Document
Raphael Volz, Abraham Taherivand
June 2009
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www.volzinnovation.com

Executive summary
 Cloud computing applies best practices of enterprise
computing of last decades
 Cloud services (IT-Services operated by IT-vendor)
particularly attractive for SMEs
 Cloud infrastructure only cheaper, if inhouse infrastructure
utilization is low
 Becoming a cloud infrastructure provider requires high
resource utiliziation and tight control of KPIs
 Applying cloud computing architecture principles makes
inhouse IT-infrastructure more controllable
 Building own cloud platform possible through available
Open Source platforms
 Open Source platforms successfully used in many
application
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Agenda
 Genesis of Cloud Computing
 IT-demand perspective (of a SME)
 IT-supply perspective
 ... cost view
 ... engineering view
 Summary
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Virtualization is experiencing a renaissance
and is the basis of cloud computing
Evolution of enterprise computing
1960 1980 2000 2008
Cloud
Mainframe Client/Server Virtualization
Computing
 Mainframe is the  Large number of  One server hosts  „Cloud“ as one
platform for all servers for multiple virtual abstract resource
applications specific machines combining all server
 Client access via applications  Virtual machines capacity
terminal  Distributed share server  Dynamic utilization
 Increasing capacity access via resources of "cloud“
eventually means to network  More efficient use of resources (on
buy new, larger protocols server resources demand)
mainframe  Usually: low  Cloud is the
 IBM invents utilization per platform for all
virtualization to server applications
optimize mainframe
performance
Source of pictures: Wikimedia Commons, Mainframe IBM 704 by LLNL 4

Amazon and Google commercialize their
infrastructure
Genesis of cloud computing – Amazon und Google
 Consumer internet providers require
high availability
 Amazon offer:
 Downtime = lost sales  Storage
(S3/CloudFront/Simple DB)
 Google: ~40k US$ per minute
 Virtual Server
 Amazon: ~35k US$ per minute (EC2, Elastic MapReduce)
 Yahoo: ~10k US$ per minute  Messaging System
(SQS)
 Big providers requirements unmet by  Google offer:
market offer
 Own application platform
 Big providers invest massively into (Java/Python)
own platforms and infrastructure  Price model:
 Standardized I. CPU hours
(Amazon by power,
 Solid parallelized Google by use)
 Fail-over and load-balanced II. Data transfer
Notes: revenue / minute from annual reports 2008 III. Storage space
Assumption: total systems failure worldwide
IV. No. of requests (Amazon)
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IT vendors not only build but also „run“
their solution
Examples for cloud services
<SalesForce>
CRM
ERP for SME
Budgeting
Usual price model:
No. of users + resource consumption
Collaboration
CRM
Invoicing
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IT vendors not only build but also „run“
their solution
Examples cloud services Motivation IT vendors
<SalesForce>
CRM  Economies of scale
Run through standardized
ERP for SME
multi-tier operation
Budgeting
 Increased margins by
eliminating middle-
Build men in distribution
channel
Collaboration
 Simplification of
CRM engineering by control
of platform
Plan
Invoicing
Note: Shift of value generation: today future
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Agenda
 Genesis of Cloud Computing
 IT-demand perspective (of a SME)
 IT-supply perspective
 ... cost view
 ... engineering view
 Summary
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Discuss with us !
Full version available at:
http://www.raphaelvolz.de/shop/106.html
Contact:
the-cloud@volzinnovation.com
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