Ima Cloud Computing Mar2010 V8

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Presented to the Institute of Management Accountants on March 18, 2010.

Presented to the Institute of Management Accountants on March 18, 2010.

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  • 1. Tony Pearson – IBM Senior Managing Consultant 18 March 2010 An Introduction to Cloud Computing © 2010 IBM Corporation
  • 2. Introduction to Cloud Computing Agenda Why is everyone excited about Cloud Computing? How did we get here? What exactly is Cloud Computing? Who is leading the Cloud Computing revolution? Where is this all going? 2 © 2010 IBM Corporation
  • 3. Introduction to Cloud Computing Agenda Why is everyone excited about Cloud Computing? Business Benefits How did we get here? What exactly is Cloud Computing? Who is leading the Cloud Computing revolution? Where is this all going? 3 © 2010 IBM Corporation
  • 4. Introduction to Cloud Computing Why the CxO is interested in cloud computing? • Innovation for competitive advantage • Faster, broader, more uncertain change • Strategic alignment CEO •Improved growth & profitability • Flexible, adaptable, Cloud computing extendable systems •Governance, risk & is a key catalyst compliance CFO for these CIO • Reliability •Transparency, visibility changes • User adoption & & control empowerment 4 © 2010 IBM Corporation
  • 5. Introduction to Cloud Computing Capacity versus Usage Usage/Demand Traditional IT approach waste Computing power waste Provisioning delay dissatisfaction time • Not enough capacity – dissatisfaction • More capacity than needed – waste 5 © 2010 IBM Corporation
  • 6. Introduction to Cloud Computing Capacity versus Usage Usage/Demand Traditional IT approach Computing power Cloud services time • Not enough capacity – dissatisfaction • More capacity than needed – waste • Capacity matches need – just right 6 © 2010 IBM Corporation
  • 7. Introduction to Cloud Computing So what’s different about Cloud? Capability From To Server/Storage Cloud is a synergistic fusion which 10-20% accelerates business value across a 70-90% Utilization wide variety of domains. Self service None Unlimited Test Weeks Minutes Provisioning Change Days/Hours Months Management Release Minutes Weeks Management Fixed cost Granular Metering/Billing model Payback period Months Years for new services Legacy Cloud enabled environments enterprise 7 © 2010 IBM Corporation
  • 8. Introduction to Cloud Computing Preliminary TCO Analysis Traditional Data Center Cloud Computing Services Compares traditional model vs. Cloud Computing service Includes acquisition, management, power/cooling, floor space Also includes network circuit cost, with full redundancy Circuit costs are offset by economies of scale, reduced operational costs Initial modeling shows 43% savings over 4 years, and 73% in year 1 Source: IBM 8 © 2010 IBM Corporation
  • 9. Introduction to Cloud Computing ROI Analysis – Internal IBM Project for 100,000 users Reduced Capital Expenditure New New Reduced Operations Expenditure 100% Development Development Liberated Liberated funding for new Additional Benefits funding for new Software Costs development, Strategic Reduced risk, less idle time, more efficient development, transformation Change use of energy, acceleration of innovation transformation investment or Capacity projects, enhanced customer service investment or direct saving direct saving Power Costs Current Deployment (1-time) Deployment (1-time) IT Labor Costs Spend (Operations and Business Case Results: Maintenance) Software Costs Annual savings: $3.3M (84%) from $3.9M to $0.6M Power Costs Hardware, labor & (- 89%) power Payback Period: 73 days Hardware Hardware Labor Costs Labor Costs savings Net Present Value (NPV): $7.5M Costs Costs (( -- 81%) 81%) reduced Internal Rate of Return (IRR): 496% ((annualized)) annual cost annualized Hardware Costs Hardware Costs Return On Investment (ROI): 1039% of operation (( -- 89%) 89%) by 84% Source: IBM 9 © 2010 IBM Corporation
  • 10. Introduction to Cloud Computing Avoid the “Heavy Lifting” involved with running a Data Center Traditional on-premises IT Approach Cloud-Based Infrastructure Source: IBM software available in the Cloud with Amazon Web Services, April 2009 10 © 2010 IBM Corporation
  • 11. Introduction to Cloud Computing Agenda Why is everyone excited about Cloud Computing? How did we get here? History of Cloud What exactly is Cloud Computing? Who is leading the Cloud Computing revolution? Where is this all going? 11 © 2010 IBM Corporation
  • 12. Introduction to Cloud Computing History of Cloud Computing – Time-Sharing “ If computers of the kind I have advocated become the computers of the future, then computing may someday be organized as a public utility just as the telephone system is a public utility... The computer utility could become the basis of a new and important industry. „ Cloud Computing —John McCarthy, MIT Centennial in 1961 Application Service Provider Grid Computing Time-Sharing In the 1960s and 70s, several companies provided time-sharing services as service bureaus, including IBM, GE, and Bolt, Beranek, and Newman (BBN). 12 © 2010 IBM Corporation
  • 13. Introduction to Cloud Computing Telephone System as Public Utility In the beginning, telephone companies had to manually connect callers with recipients 13 © 2010 IBM Corporation
  • 14. Introduction to Cloud Computing History of Cloud Computing – Grid Computing Grid computing is the combination of geographically distributed computer systems, interconnected by a network, applied to a common task, usually to a scientific, technical or business problem that requires a great number of computer processing cycles or the need to process large Cloud Computing amounts of data. Application Service Provider Grid Computing Time-Sharing 14 © 2010 IBM Corporation
  • 15. Introduction to Cloud Computing Networks connected many locations together Telephone companies switched to a grid of network switches to automate what human switchboard operators once did 15 © 2010 IBM Corporation
  • 16. Introduction to Cloud Computing History of Cloud Computing – Application Service Provider An Application Service Provider (ASP) is a company that offers individuals or companies access over the Internet to applications and related services that would otherwise have to be located in their own computers. Cloud Computing Application Service Provider Grid Computing Time-Sharing Subscription fees were often monthly, by the number of employees or users 16 © 2010 IBM Corporation
  • 17. Introduction to Cloud Computing Cloud – The Symbol for all networks, including the Internet Networks were cumbersome to draw, so engineers represented them as an oval, amoeba, or cloud shape. The cloud shape was adopted as the symbol for all networks, including the Internet 17 © 2010 IBM Corporation
  • 18. Introduction to Cloud Computing Cloud Computing – A Disruptive New Paradigm? “Clouds will transform the information technology (IT) industry… profoundly change the way people work and companies operate.” 2009 Cloud computing is a pay-per-use model for enabling network access to a pool of computing resources that can be provisioned and released rapidly with minimal Cloud Computing management effort or service provider interaction. Application Service Provider Grid Computing Time-Sharing Pay-per-use Network access Pool of Resources Rapid Elasticity Self-service 18 Source: National Institute of Standards and Technology (NIST) © 2010 IBM Corporation
  • 19. Introduction to Cloud Computing Agenda Why is everyone excited about Cloud Computing? How did we get here? What exactly is Cloud Computing? Enabling Technologies Who is leading the Cloud Computing revolution? Where is this all going? 19 © 2010 IBM Corporation
  • 20. Introduction to Cloud Computing Cloud Computing - Explained 20 © 2010 IBM Corporation
  • 21. Introduction to Cloud Computing “People do not want quarter- inch drills. They want quarter-inch holes.” Professor Emeritus Theodore Levitt, Harvard Business School 21 © 2010 IBM Corporation
  • 22. Introduction to Cloud Computing An Analogy – Transportation Alternatives Traditional Approach: Buy a car, drive it yourself, have a place to park it, take care of maintenance and insurance. Rental with or withouth Chauffer: Rent a car by the day or week. Drive it yourself, or hire a chauffer to drive the car for you. Transportation as a Service: Hop in the back seat of a taxi andtell driver where you would like to go. Pay by the mile. 22 © 2010 IBM Corporation
  • 23. Introduction to Cloud Computing An Analogy – Transportation as Someone Else’s Problem Traditional Weekly Rental Taxi You Decide where to go You Decide where to go You Decide where to go You Drive You Drive (or hire someone) Someone else Parking / Storage Weekly Parking Drives Parking / Storage You Purchase Vehicle Someone else Purchases Vehicle, Ongoing Maintenance purchases Vehicle Ongoing Maintenance Ongoing Maintenance 23 © 2010 IBM Corporation
  • 24. Introduction to Cloud Computing The Many Shades of Cloud Computing Use Application Use Application Use Application Traditional IT Datacenters Traditional Outsourcing Build or Buy Build or Buy Build App App App Platform Platform Platform Hardware Hardware Hardware Facilities Facilities Facilities Infrastructure Platform as a Software as a as a Service (IaaS) Service (PaaS) Service (SaaS) 24 © 2010 IBM Corporation
  • 25. Introduction to Cloud Computing Understanding Cloud Computing 25 © 2010 IBM Corporation
  • 26. Introduction to Cloud Computing The Many Shades of Cloud Computing – IaaS You Manage: Use Application You manage the operating system platform and application software Build or Buy App Virtual Machine (VM) Platform Server – Storage - Network Hardware They Manage: IaaS provider manages the data center building Facilities facilities, owns and configures all of the computer servers, storage and networks, providing clients “Virtual Machines” Infrastructure as a Service (IaaS) 26 © 2010 IBM Corporation
  • 27. Introduction to Cloud Computing Server Virtualization Traditional Approach: • Single Operating System (OS) • One application (multiple apps might conflict with each other) • Hardware resources underutilized Server Virtualization Approach: • Encapsulate OS+Application into a “Virtual Machine” (VM) image • Partition physical machine to support multiple VMs • Isolate each VM from each other for multi-tenancy • Better utilization of underlying physical hardware Source: VMware 27 © 2010 IBM Corporation
  • 28. Introduction to Cloud Computing Hypervisor Example: VMware ESX Virtual Machine (VM) Guest Operating System Virtual Resources Hypervisor Host or “Host Machine” Physical Resources Source: VMware 28 © 2010 IBM Corporation
  • 29. Introduction to Cloud Computing Server Farms With a Hypervisor, you typically have 5 to 20 virtual machines per host VMware – Market Leader for Intel/AMD x86 hosts XEN --- Open Source, available commercially as Citrix XenServer PowerVM – Hypervisor for POWER-based servers Hyper-V – Contender from Microsoft KVM – part of the Linux operating system Source: VMware 29 © 2010 IBM Corporation
  • 30. Introduction to Cloud Computing The Many Shades of Cloud Computing -- PaaS You Manage: Use Application You manage the application software, pre-packaged software and/or applications Build or Buy your company develops internally App Platform Platform Stack LAMP - .NET – J2EE Hardware They Manage: PaaS provider manages the Operating Facilities Systems, Databases, Web servers and programming languages needed to provide clients a “Platform Stack” to run applications Platform as a Service (PaaS) 30 © 2010 IBM Corporation
  • 31. Introduction to Cloud Computing Three Popular “Platform Stacks” LAMP .NET J2EE PHP ASP.net Java IBM DB2, MySQL SQL Server Oracle Internet WebLogic, Apache Information WebSphere Services (IIS) UNIX (AIX, z/OS, Linux Windows HP-UX, Solaris) 31 © 2010 IBM Corporation
  • 32. Introduction to Cloud Computing The Many Shades of Cloud Computing -- SaaS You Manage: Use Application You manage employee access to applications and data Build App Login Credentials Platform userid/password They Manage: Hardware SaaS provider develops, tests and manages the application software, providing login credentials Facilities to clients and balancing the number of users on each virtual machine Software as a Service (SaaS) 32 © 2010 IBM Corporation
  • 33. Introduction to Cloud Computing Cloud Providers do not need to be Vertically Integrated A team of application designers and Client software engineers A team of system, database and backup administrators Software as a Service (SaaS) Platform as a A team of server, Service (PaaS) storage and network administrators Infrastructure as a Service (IaaS) 33 © 2010 IBM Corporation
  • 34. Introduction to Cloud Computing Cloud Economics are Real Infrastructure, Labor, and Re-Engineering IT Business and Delivery Processes Drive Cloud Economics Virtualization of Infrastructure Drives lower capital Hardware Leverage requirements Virtualized environments get Utilization of benefits of scale when they Infrastructure are highly utilized Clients who can “serve Self Service themselves” require less support and get services Leverage Automation of Take repeatable tasks and Labor Management automate Less complexity = Standardization of more automation possible = Workloads fewer people needed 34 © 2010 IBM Corporation 34
  • 35. Introduction to Cloud Computing Cloud Computing Alternatives Private cloud… Public cloud… •Privately owned and Service provider owned and managed. Public Cloud managed. •Access limited to client and its partner network. •Access by subscription. •Drives efficiency, •Delivers select set of standardization and best Private Cloud standardized business practices while retaining process, application and/or greater customization and infrastructure services on a control pay-per-usage basis. Hybrid cloud … •The combination of public and private .…Security, privacy models for the greatest .…Standardization, capital customization & control efficiencies and broadest preservation, flexibility and workload support. time to deploy Cloud solutions can be implemented behind client firewall in managed or un-managed configurations and as a hosted offering. 35 35 © 2010 IBM Corporation
  • 36. Introduction to Cloud Computing Standardization and optimization by workload enables economies of scale. Unit cost Traditional Infrastructure Private Service Cloud Provider Public Cloud Scale Enterprises can significantly reduce costs for some workloads compared with traditional IT 36 Source: IBM On a Smarter Planet – New ideas for Smarter IT © 2010 IBM Corporation
  • 37. Introduction to Cloud Computing Agenda Why is everyone excited about Cloud Computing? How did we get here? What exactly is Cloud Computing? Who is leading the Cloud Computing revolution? The Major Players Where is this all going? 37 © 2010 IBM Corporation
  • 38. Introduction to Cloud Computing Is Cloud Computing a Revolution? Source: http://www.andybudd.com/presentations/dcontruct05/ 38 © 2010 IBM Corporation
  • 39. Introduction to Cloud Computing Cloud Computing enables innovative business models by providing IT services from a dynamic infrastructure faster, simpler and cheaper Clients Business Value: New combinations of services create differentiating value at INNOVATIVE BUSINESS MODELS lower cost in less time Cloud Services delivered from a Dynamic Infrastructure: Cloud Computing Open standards-based Cloud Common components and Services processes Flexible scaling Dynamic Request driven provisioning Infrastructure 39 © 2010 IBM Corporation
  • 40. Introduction to Cloud Computing Software as a Service (SaaS) Providers AthenaHealth Microsoft – Physician billing, practice management – Office, Sharepoint, Exchange Online and Electronic Health Records NetSuite Google – Business accounting software, ERP, – Gmail, GoogleDocs for spreadsheet, CRM and ecommerce documents and presentations IBM LotusLive™ RightNow Technologies – Web, social, and call center support – Web conferencing, collaboration and Lotus Notes e-mail Salesforce.com – Customer Relationship Management Intuit (CRM) for sales professionals – Small Business Web Design, Invoice, Payroll and Tax services 40 © 2010 IBM Corporation
  • 41. Introduction to Cloud Computing Infrastructure and Platform Service Providers – Major Players 41 © 2010 IBM Corporation
  • 42. Introduction to Cloud Computing Amazon Web Services (AWS) Elastic Compute Cloud (EC2) Amazon SimpleDB 8.5¢ per hour – Linux IBM DB2,Informix 12¢ per hour – Windows Oracle, MySQL SQL Server No cost transfers Simple Queue Service (SQS) between EC2 and S3 1¢ per 10,000 Send/Receive Simple Storage Service (S3) 15¢ per GB/month Data Transfer In PUT (submit form) 10¢ per GB 1¢ per 1,000 requests Data Transfer Out Clients GET (show web page) 15¢ per GB 1¢ per 10,000 requests Source: aws.amazon.com/ 42 © 2010 IBM Corporation
  • 43. Introduction to Cloud Computing IBM’s Five co-existing cloud delivery models Private Cloud Shared Private Cloud Public Cloud Customer/IBM owned IBM owned and IBM owned and Enterprise owned Enterprise owned; and IBM operated operated operated 1 and operated 2 IBM operated 3 (single tenant) 4 (multi-tenant) 5 (multi-tenant) Enterprise Enterprise Enterprise Enterprise A User User User Data Center Data Center Enterprise B A B C Private Managed User User Enterprise C Cloud Private D … Cloud IBM Operated Hosted Shared Private Cloud Public Cloud Private Cloud Hosting Center Hosting Center Cloud Cloud Cloud Services Cloud Services delivered privately to delivered publicly to Enterprises / virtual end users / secure, separation of tenants enterprise-class Customer owns and pays for infrastructure IBM owns infrastructure and customer has and has unlimited exclusive access shared access and pays by usage 43 © 2010 IBM Corporation
  • 44. Introduction to Cloud Computing IBM Cloud Services and Systems Portfolio Analytics Collaboration Development Desktop and Infrastructure Infrastructure Business and test devices compute storage services IBM Cloud IBM Lotus Live Smart Business IBM Smart Business IBM Computing IBM Information BPM BlueWorks Standardized services Development Desktop Cloud on Demand Protection (design tools) on the IBM cloud IBM Lotus® and Test on Smart Business Services Smart business iNotes® the IBM End User expense Cloud (beta) IBM Support Smart reporting on the Business IBM cloud Customized IBM Smart IBM Lotus® IBM Smart IBM Smart Storage Cloud Solutions Analytics Cloud Foundations Business Test Cloud Business Desktop Private cloud services, Cloud IBM Grid behind your firewall, built Medical Archive and/or managed by IBM Solution (GMAS) IBM Smart IBM IBM Smart Business Analytics CloudBurst Information for Small or Integrated System ™ family Archive Midsize Systems Business Preintegrated, workload- (backed by the IBM Scale- optimized systems IBM Cloud) Out NAS 44 © 2010 IBM Corporation
  • 45. Introduction to Cloud Computing Cloud Component Suppliers -- “The Arms Dealers” 45 © 2010 IBM Corporation
  • 46. Introduction to Cloud Computing Cloud Computing – Consumers A quantum improvement in access, efficiency and convenience. Projected savings in software licensing costs of up to 75 percent. 150 percent North Carolina State University increase in students served. Cloud computing helped reduce the data center footprint by 50 percent, energy costs by 30 percent. Recover from any failure within 4 hours, Ocean containerized shipping including complete data center fail-over. Kantana consolidated their fragmented islands of information into a global, infinitely scalable, heterogeneous grid, operating the most resilient, high performance environment that meets most Kantana Animation Studios challenging business needs. 46 Source: IBM © 2010 IBM Corporation
  • 47. Introduction to Cloud Computing Agenda Why is everyone excited about Cloud Computing? How did we get here? What exactly is Cloud Computing? Who is leading the Cloud Computing revolution? Where is this all going? Future predictions 47 © 2010 IBM Corporation
  • 48. Introduction to Cloud Computing 48 © 2010 IBM Corporation
  • 49. Introduction to Cloud Computing Cloud Economics CLOUD COMPUTING VIRTUALIZATION + STANDARDIZATION + AUTOMATION = Cost Flexibility …leveraging virtualization, standardization and automation to free up operational budget for new investment. 49 © 2010 IBM Corporation
  • 50. Introduction to Cloud Computing Cloud Prediction from Sun CTO Greg Papadopoulos A "neutron star collapse of data centers" – It won't make sense for businesses to build their own data centers. Hosting providers will bring "brutal efficiency" for utilization, power, security, service levels, and idea- to-deploy time. – A half dozen very large cloud infrastructure providers and a hundred or so regional providers Look more like the banking world – Customers will trust service providers with their private data as they do banks with their money. 50 © 2010 IBM Corporation
  • 51. Introduction to Cloud Computing Co-existing delivery models are emerging… Service Consumers Services Services Services Service Integration Service Integration Service Integration Traditional Public Private Cloud Enterprise IT Clouds Enterprise Hybrid Clouds Mission Critical Virtual Desktop Variable Storage Packaged Apps Test/Development Software as a Service High Compliancy/Security Data Mining/Analytics Archive/Disaster Recovery Proprietary Platforms Service/Help Desk Web Hosting/Conferencing 51 © 2010 IBM Corporation
  • 52. Introduction to Cloud Computing Cloud Computing can be seen as a threat or opportunity for the CIO. Some CIOs worry that Cloud will bring about disruptive change to IT Operations Line-of-business units going to “public cloud providers” for IT instead Disintermediation of the traditional IT team As some have said, it is “Client / Server all over again” CIOs need to embrace the change, not resist it Understand the benefits of cloud, as well as its drawbacks Understand the public cloud providers capabilities and include these services in IT offerings as it makes sense With an IT strategy that embraces Cloud, CIOs can better satisfy their customers Improves visibility of IT use, more responsive, simpler, cheaper Requires an overall strategic vision with pragmatic, evolutionary approach Increases range of services, applications, and capabilities available to clients 52 © 2010 IBM Corporation
  • 53. Introduction to Cloud Computing Getting Started in Cloud Computing Try out Public Cloud Computing Today! – SaaS provide free trial memberships – IaaS/PaaS offer hourly rates with no long-term commitment, free uploads, test/development images, and other promotions Build your own Private or Hybrid Cloud! – Free trial versions of Hypervisors – Ubuntu Linux has KVM and XEN, full LAMP stack, and Eucalyptus cloud management software – FREE! – Consider Hardware-Assisted servers • Intel VT • AMD-V 53 © 2010 IBM Corporation
  • 54. Introduction to Cloud Computing Learning Points – Cloud Computing Cloud computing is a new IT consumption and delivery model based on standard network protocols and interfaces Resource pooling, virtualization and automation allows for economies of scale Rapid elasticity and pay-per-use billing can offer workload-optimized systems with low barrier of entry and reduced cycle time Business leaders, governments, and non- profits can all benefit from Cloud Computing 54 © 2010 IBM Corporation
  • 55. Introduction to Cloud Computing Questions and Answers (Q&A) 55 © 2010 IBM Corporation
  • 56. Introduction to Cloud Computing Thank you! For more information, please visit: ibm.com/cloud Tony Pearson’s blog: http://bit.ly/1YyMNg 56 © 2010 IBM Corporation
  • 57. Introduction to Cloud Computing Trademarks and Disclaimers © IBM Corporation 1994-2010. All rights reserved. References in this document to IBM products or services do not imply that IBM intends to make them available in every country. Permission granted to The Institute of Management Accountants (IMA®) to provide copies of this presentation to its members. IBM, the IBM logo, Dynamic Infrastructure, and ibm.com are registered trademarks, and other company, product or service names may be trademarks or service marks of International Business Machines Corporation in the United States, other countries, or both. A current list of IBM trademarks is available on the Web at http://www.ibm.com/legal/copytrade.shtml. Intel, Intel logo, Intel Inside, Intel Inside logo, Intel Centrino, Intel Centrino logo, Celeron, Intel Xeon, Intel SpeedStep, Itanium, and Pentium are trademarks or registered trademarks of Intel Corporation or its subsidiaries in the United States and other countries. Linux is a registered trademark of Linus Torvalds in the United States, other countries, or both. Microsoft, Windows, Windows NT, and the Windows logo are trademarks of Microsoft Corporation in the United States, other countries, or both. UNIX is a registered trademark of The Open Group in the United States and other countries. Java and all Java-based trademarks are trademarks of Sun Microsystems, Inc. in the United States, other countries, or both. Other company, product, or service names may be trademarks or service marks of others. Information is provided "AS IS" without warranty of any kind. The customer examples described are presented as illustrations of how those customers have used IBM products and the results they may have achieved. Actual environmental costs and performance characteristics may vary by customer. Information concerning non-IBM products was obtained from a supplier of these products, published announcement material, or other publicly available sources and does not constitute an endorsement of such products by IBM. Sources for non-IBM list prices and performance numbers are taken from publicly available information, including vendor announcements and vendor worldwide homepages. IBM has not tested these products and cannot confirm the accuracy of performance, capability, or any other claims related to non-IBM products. Questions on the capability of non-IBM products should be addressed to the supplier of those products. All statements regarding IBM future direction and intent are subject to change or withdrawal without notice, and represent goals and objectives only. Some information addresses anticipated future capabilities. Such information is not intended as a definitive statement of a commitment to specific levels of performance, function or delivery schedules with respect to any future products. Such commitments are only made in IBM product announcements. The information is presented here to communicate IBM's current investment and development activities as a good faith effort to help with our customers' future planning. Performance is based on measurements and projections using standard IBM benchmarks in a controlled environment. The actual throughput or performance that any user will experience will vary depending upon considerations such as the amount of multiprogramming in the user's job stream, the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be given that an individual user will achieve throughput or performance improvements equivalent to the ratios stated here. Photographs shown may be engineering prototypes. Changes may be incorporated in production models. 57 © 2010 IBM Corporation