What’s Going on in the Cloud? Brandon Watson Director, Azure Services Platform [email_address] www.manyniches.com twitter.com/brandonwatson

Today’s Topics Who am I? Re-tread at Microsoft Ex-private equity guy Entrepreneur on loan to MSFT after my last exit – “wifestyle” reasons My last company ( IMSafer ) was an exit for cash Why cloud? Continuing trend of simplifying app creation & service delivery Further reducing friction in creating new opportunities for business Concentration of IT dollars Who are we talking about today? Amazon Web Services, Google App Engine, Microsoft Azure Not VMWare, Salesforce.com or multitude of startups Future directions? Investment whitespace and needs

Who am I?

Re-tread at Microsoft

Ex-private equity guy

Entrepreneur on loan to MSFT after my last exit – “wifestyle” reasons

My last company ( IMSafer ) was an exit for cash

Why cloud?

Continuing trend of simplifying app creation & service delivery

Further reducing friction in creating new opportunities for business

Concentration of IT dollars

Who are we talking about today?

Amazon Web Services, Google App Engine, Microsoft Azure

Not VMWare, Salesforce.com or multitude of startups

Future directions?

Investment whitespace and needs

First, Some Definitions There’s a lot of aaS’s out there Infrastructure as a Service (IaaS) The ability to manage and launch virtual machines on hardware that you do not own Platform as a Service (PaaS) A more abstracted view of the development platform, where all facilities required to support app life-cycle are available via network Software as a Service (SaaS) The delivery of an experience to a customer, on demand, generally using the web as a delivery mechanism Software Plus Services (S+S) Using the best of software and services to deliver the right experience to customers at the right time on the end point of their choosing Brandon as a Service (BaaS) Rare Seattle fish, known for bloviating and biting

Infrastructure as a Service (IaaS)

The ability to manage and launch virtual machines on hardware that you do not own

Platform as a Service (PaaS)

A more abstracted view of the development platform, where all facilities required to support app life-cycle are available via network

Software as a Service (SaaS)

The delivery of an experience to a customer, on demand, generally using the web as a delivery mechanism

Software Plus Services (S+S)

Using the best of software and services to deliver the right experience to customers at the right time on the end point of their choosing

Brandon as a Service (BaaS)

Rare Seattle fish, known for bloviating and biting

Cloud Computing Platforms My themes for today Functionality How much can you do with what you have? Familiarity Do you instinctively know how to use it? Scalability How easy is it to handle more inputs and workloads?

My themes for today

Functionality

How much can you do with what you have?

Familiarity

Do you instinctively know how to use it?

Scalability

How easy is it to handle more inputs and workloads?

The Trouble With Big Large scale deployments generally get one of these two reactions Cloud to the rescue!

Large scale deployments generally get one of these two reactions

Amazon Web Services Service Types Infrastructure | Payments Elastic Compute On-demand, resizable compute Elasticity is not automated Supports Linux & Windows server Very easy to get started, and use Simple DB Core DB functions (index and query) Schema-less DB, much like BigTable Limited primitive types Optimized for CRUD operations S3 Storage Simple web services for storing arbitrary amounts and types of data Data store is unlimited (objects to 5GB) It’s about availability over consistency Dev Pay Billing as a service Ensures authorized app access Flexible Payment Service Payment system built on top of AMZN’s infrastructure Customers can use AMZN credentials for payment Simple Queue Service for storing and passing messages between computers Queue messages are durable CloudFront Web service for global content delivery Targeting Akami with lower cost

Elastic Compute

On-demand, resizable compute

Elasticity is not automated

Supports Linux & Windows server

Very easy to get started, and use

Simple DB

Core DB functions (index and query)

Schema-less DB, much like BigTable

Limited primitive types

Optimized for CRUD operations

S3 Storage

Simple web services for storing arbitrary amounts and types of data

Data store is unlimited (objects to 5GB)

It’s about availability over consistency

Dev Pay

Billing as a service

Ensures authorized app access

Flexible Payment Service

Payment system built on top of AMZN’s infrastructure

Customers can use AMZN credentials for payment

Simple Queue

Service for storing and passing messages between computers

Queue messages are durable

CloudFront

Web service for global content delivery

Targeting Akami with lower cost

Datacenters Are Spendy Best to share that risk if possible Source: AMZN 10Qs & 10Ks

Best to share that risk if possible

5 Theoretical Whys of AMZN Why is our CapEx so high? Because we have to buy a lot of servers. Why are we buying a lot of servers? Because we need to support the traffic needs of our business and our partners’. Why aren’t we able to support them with fewer servers? Because traffic patterns and server utilizations require more servers. Why do traffic and utilization patterns have an impact on number of servers? Because the traffic spikes in Nov and Dec create a need for peak load. Why does the traffic have massive spikes in Nov and Dec? Because AMZN and all of it’s partners are in the same business – retail. Resolution – attract customers onto your technology platform who have different patterns, and no longer are major traffic component in own system

Why is our CapEx so high?

Because we have to buy a lot of servers.

Why are we buying a lot of servers?

Because we need to support the traffic needs of our business and our partners’.

Why aren’t we able to support them with fewer servers?

Because traffic patterns and server utilizations require more servers.

Why do traffic and utilization patterns have an impact on number of servers?

Because the traffic spikes in Nov and Dec create a need for peak load.

Why does the traffic have massive spikes in Nov and Dec?

Because AMZN and all of it’s partners are in the same business – retail.

Resolution – attract customers onto your technology platform who have different patterns, and no longer are major traffic component in own system

Amazon Web Services Hosting++ is more expensive than you think My last company as an example Hosting with AMZN would have cost $4,500 / month 3 front end servers, 1 dev front end server 2 database servers, 1 dev database server 2TB of storage Bandwidth 10U of hosting cost us $750/month Hardware is cheap and getting “free-er” Net out Scalable – Scales nodes, not algorithms Functional – Good UI with lots of services available for building apps and services Familiar – Use the server apps and OS that you already know No real developer DNA, and no support for partners

Hosting++ is more expensive than you think

My last company as an example

Hosting with AMZN would have cost $4,500 / month

3 front end servers, 1 dev front end server

2 database servers, 1 dev database server

2TB of storage

Bandwidth

10U of hosting cost us $750/month

Hardware is cheap and getting “free-er”

Net out

Scalable – Scales nodes, not algorithms

Functional – Good UI with lots of services available for building apps and services

Familiar – Use the server apps and OS that you already know

No real developer DNA, and no support for partners

Google App Engine Service Types Infrastructure Compute Highly scalable and built on top of GOOG infra Elasticity is automated No concept of an OS or a virtual machine GOOG limits the actual scalability BigTable Storage Entity relationship storage Built on top of GOOG’s database for their site No tools for data management

Compute

Highly scalable and built on top of GOOG infra

Elasticity is automated

No concept of an OS or a virtual machine

GOOG limits the actual scalability

BigTable Storage

Entity relationship storage

Built on top of GOOG’s database for their site

No tools for data management

5 Theoretical Whys of GOOG Why are we making money? Because we sell advertisements against pageviews. Why aren’t we selling more advertisements? Because there is a lack of usage of online services globally. Why is the growth of online services stalling? Because there is a lack of content, not connectivity. Why is there a lack of content? Because there is no cheap and easy way to build and host dynamic, big scale applications for the web. Why is there no easy way to build dynamic, big scale applications? Because hosting can be expensive, and setting up servers for large scale can be extremely difficult. Resolution – release a low cost, highly scalable hosted application programming framework with a very specific target application type in mind – to create content against which to sell ads.

Why are we making money?

Because we sell advertisements against pageviews.

Why aren’t we selling more advertisements?

Because there is a lack of usage of online services globally.

Why is the growth of online services stalling?

Because there is a lack of content, not connectivity.

Why is there a lack of content?

Because there is no cheap and easy way to build and host dynamic, big scale applications for the web.

Why is there no easy way to build dynamic, big scale applications?

Because hosting can be expensive, and setting up servers for large scale can be extremely difficult.

Resolution – release a low cost, highly scalable hosted application programming framework with a very specific target application type in mind – to create content against which to sell ads.

Google App Engine My First Web App My last company as an example Could not have handled the load – too many transactions per second Could not have handled any of the background processing Complete re-write of data-access layer Complete re-write to Python Net out Scalable – Rate limited by GOOG with little visibility into what resources are in use Functional – Very limited by features made available Familiar – Language, framework and database all new concepts No SLAs, but marketplace is coming for GAPE plug-ins

My First Web App

My last company as an example

Could not have handled the load – too many transactions per second

Could not have handled any of the background processing

Complete re-write of data-access layer

Complete re-write to Python

Net out

Scalable – Rate limited by GOOG with little visibility into what resources are in use

Functional – Very limited by features made available

Familiar – Language, framework and database all new concepts

No SLAs, but marketplace is coming for GAPE plug-ins

Azure Services Platform Build Apps & Services Using What You Know

Azure Services Platform Service Types Infrastructure | Connectivity | Security Elastic Compute On-demand, resizable stateless application and service hosting environment Elasticity is automated and managed by fabric Supports multiple programming models Simple queue built in Very easy to get started, and use SQL Data Services Core DB functions (index and query) Relational in the cloud Built on top of Microsoft SQL Table/Blob Storage Simple storage for the compute layer Data store limited and not meant for heavy DB Tables and blobs for storing many data types Service Bus Easy connectivity thru firewalls Passing messages between apps and services Queue messages are durable Multiple connectivity options Access Control Standards based Claims based authentication for connecting users to apps and services Live Services Easy synchronization of files, folders and applications Access to MSFT social graph Great developer services and monetization engine

Elastic Compute

On-demand, resizable stateless application and service hosting environment

Elasticity is automated and managed by fabric

Supports multiple programming models

Simple queue built in

Very easy to get started, and use

SQL Data Services

Core DB functions (index and query)

Relational in the cloud

Built on top of Microsoft SQL

Table/Blob Storage

Simple storage for the compute layer

Data store limited and not meant for heavy DB

Tables and blobs for storing many data types

Service Bus

Easy connectivity thru firewalls

Passing messages between apps and services

Queue messages are durable

Multiple connectivity options

Access Control

Standards based

Claims based authentication for connecting users to apps and services

Live Services

Easy synchronization of files, folders and applications

Access to MSFT social graph

Great developer services and monetization engine

Azure Services Platform Breadth and depth to deliver solutions My last company as an example Ruby & Rails support is “coming” Might still need a RDBMS local to Ruby code (depends on SQL Data Services issue) Message queuing would have helped immensely SQL Data Services would have solved our database sharding challenges Much easier to connect to on-premise deployments (our B2B solution) Net out Scalable - Easier to build scalable apps and DB, and costs look like they will be lower due to utilization optimization Functional - Many of the core on-premise developer features which customers depend on are available Familiar – Standards based and can leverage existing developer skills Deep support for ISVs and partners to build a business

Breadth and depth to deliver solutions

My last company as an example

Ruby & Rails support is “coming”

Might still need a RDBMS local to Ruby code (depends on SQL Data Services issue)

Message queuing would have helped immensely

SQL Data Services would have solved our database sharding challenges

Much easier to connect to on-premise deployments (our B2B solution)

Net out

Scalable - Easier to build scalable apps and DB, and costs look like they will be lower due to utilization optimization

Functional - Many of the core on-premise developer features which customers depend on are available

Familiar – Standards based and can leverage existing developer skills

Deep support for ISVs and partners to build a business

Ideal Cloud Scenario Deploying on the cloud should feel like this…

Deploying on the cloud should feel like this…

Whitespace What’s interesting, and what’s missing Essential Services Very hard for a startup to compete in building out a new operating system or development platform layer Building Block Services Developers will need plug and play pieces for services they are building – PHP is a great proxy for how this could shake out Billing, data management, business intelligence, application bridges Finished Services Plenty of SaaS applications are being created – estimated $20B in revenues already Lots of opportunity for bridging on and off-premise enterprise applications Interesting Private Companies Infrastructure – AppNexus, Rackspace, GoGrid, Flexiscale Platform Specific – Heroku, Engine Yard, Blue Box Group, Joyent Connectivity – Cloudswitch, Cohesive FT’s Management – Rightscale, Elastra Dev Services – BrowserMob, Soasta, LiebSoft

What’s interesting, and what’s missing

Essential Services

Very hard for a startup to compete in building out a new operating system or development platform layer

Building Block Services

Developers will need plug and play pieces for services they are building – PHP is a great proxy for how this could shake out

Billing, data management, business intelligence, application bridges

Finished Services

Plenty of SaaS applications are being created – estimated $20B in revenues already

Lots of opportunity for bridging on and off-premise enterprise applications

Interesting Private Companies

Infrastructure – AppNexus, Rackspace, GoGrid, Flexiscale

Platform Specific – Heroku, Engine Yard, Blue Box Group, Joyent

Connectivity – Cloudswitch, Cohesive FT’s

Management – Rightscale, Elastra

Dev Services – BrowserMob, Soasta, LiebSoft