Do you need Cloud? An info session for a Belgian financial institution

Cloud demystifiedInformation Session for a Belgianfinancial institutionGabriele Bozzi @gabrielebozzi25/10/2011 © Gabriele Bozzi 1

What is CloudComputing? Cloud Computing is an operating model! © Geek and Poke © Gabriele Bozzi 2

What makes the Clouda utility service?You heard it “ad nauseam” • The modern Utility Computing model:  Scalability (theoretically: infinite)  Elasticity (don’t waste resources)  Accessibility (everybody, on demand, no lock-in)  API (no API, no party!)  Unlimited storage (better if file-oriented)  Automation (if runs more than once: automate!) John Mc Carthy predicted in 1964 that computing: « will eventually become an utility service in the future ». It took more than 40 years to make it happen. © Gabriele Bozzi 3

Why “Cloud”? FOOTBALL COMPUTING ON DEMAND SOCCER CLOUD The author takes full responsibility of his views © Gabriele Bozzi 4

Surprise: the Cloud isan enabler! • The Cloud is an operating model (again) • It allows IT to react and act faster • It doesn’t make save you money, rather spend it better* • It doesn’t require disruptive investments in terms of assets *This will be explained later (Jevons Paradox) © Gabriele Bozzi 5

Resistance is futile Strategic importance of information technology in business has diminished as IT has become more commonplace, standardized and cheaper* *See Nicholas G. Carr references © Gabriele Bozzi 6

IT is a commodity This is the zone Ubiquity Utility Services where ROI is maximised Commodity Demand The curve’s slope represents the Product investment impact Custom built Innovation Improvement Certainty Computing, as a product, has become so widespread and improved so much that is now transitioning to the utility service model Thanks to Simon Wardley for mapping the “S” curve to Cloud Computing © Gabriele Bozzi 7

The marketer’s party:Private Clouds You have heard so much bad marketing from vendors about Private Cloud systems and Private Cloud storage that arent really cloud, now you have bad connotations about the whole thing. Why limit it to “Private”? Why not call it (and use it as) Enterprise Cloud? Apparently “Private” is a misnomer: in the initial Cloud-hype cycle, many vendors were worried of the “control” issue of Cloud, therefore “Private” sounded more sellable © Gabriele Bozzi 8

The posture againstEnterprise Cloud • The promise is to increase level of efficiency by building your own abstraction layers • Cloud administrators run an entire data-center, instead of being responsible for just one technology • It is the evolutionary mid-term technology to bridge Enterprise IT to full commoditisation • Be it IaaS, PaaS, SaaS: the objective is to raise competitiveness by adopting standard practices © Gabriele Bozzi 9

Risks • Of course the Cloud has risks: Transitional risks: governance issues, security of supply, general security Outsourcing risks: lock-in, price competition, loss of strategic control Disruption risks: non-commodity products falling victim of the change The truism of the day is:”Don’t put all your eggs in one basket” © Gabriele Bozzi 10

So: Do I need Cloud? Market Ubiquity Competitive gap You The Red Queen Hypothesis*: "It takes all the running you can do, to keep in the same place." CertaintyNo, but consider those activities that are becoming less strategic; byignoring commoditisation you are likely to create a competitivedisadvantage for yourself as anyone else is racing for ubiquitous benefits *Originally proposed by Leigh Van Valen (1973) © Gabriele Bozzi 11

The Jevons Paradox “Technological progress that increases the efficiency with which a resource is used, tends to increase the rate of consumption of that resource”* In Cloud terms: Expect no significant reduction in spending by adopting Cloud, because it opens more William Stanley Jevons opportunities to generate competitive IT consumption *The Coal Question, 1865 © Gabriele Bozzi 12

Are there Quick-wins toachieve with EnterpriseCloud? • Yes! Here are some areas to watch out: Extreme load variation Storage, information management Big Data Commoditise procurement Non strategic activities © Gabriele Bozzi 13

Extreme load variationAn unfair comparison • SEPA DD platform on • SEPA DD platform on Open Systems mainframe • Elastically allocated VMs, • Monolithic code on EJB 3 mainframe • In-memory caching • File transfers • 24m bulk transactions per • 5m bulk transactions per run (< 8hrs) day • 3.800 Man-days to • 6.100 Man-days to production production • Up to 50% of processing • Mips cost affects TCO comes from unused CPU (typically 2000m) © Gabriele Bozzi 14

Storage, informationmanagement • Press editors and news providers deploy a unified online store for their publications • Proposed architecture: Object storage supports ingestion and content storage/distribution on the same support (55TB of publications and semantic indexes) • Keep back-office processes in-house 3 yrs estimate 145% 140% 140% 135% 130% 125% 126% 121% 122% Monthly TCO Cloud (%) 120% 115% 116% Monthly TCO in-house (%) 110% 112% N.B. TCO takes in account: 105% Depreciation of IT and turn-over of 100% equipment. 250k 500k 1m 2m 4m 8m Depreciation of Cloud prices on 3yrs span In-house storage and content distribution has higher TCO than Cloud storage © Gabriele Bozzi 15

BigData goes publicClouds (1) Up to 3000 CPUs • Bank Of America uses Map-Reduce (Hadoop) to cope with cross product risk management: from home loans to online banking Baseline 300 CPUs • Bankinter in Spain uses Amazon cloud computing as an integral part of their credit-risk simulations. Reduces process times from 23hrs to 20min • Capture and deliver near-real time Wed Thu Fri Mon Tue results! • Use innovative data imaging (R, Typical Duty Cycle of CPU utilization for Risk Management Systems a financial Tableau) institution runs on Amazon’s public Cloud Courtesy of Amazon AWS® Europe © Gabriele Bozzi 16

Assisted DesktopVirtualization • DaaS: Desktop as a Service, no CapEx (e.g. Citrix Farm) • Good for provisional procurement, home working, outsourced workforce • Shares economies of scale of the Cloud with the customer • Decrease 3 to 5 times the yearly TCO of a Virtual Desktop (e.g. 360 US$ vs 1.200 US$)* *Prices are exclusive of application procurement (just Windows) © Gabriele Bozzi 17

Appendix A: vendors,technologies • Microsoft Azure (PaaS) is coming to a datacenter near you (yours) • Amazon AWS, the public Cloud is becoming more enterprise • OpenStack, the linux of Open Source • Piston Cloud Computing , Enterprise-grade, high security OpenStack implementation • Citrix CloudStack , agnostic cloud infrastructure platform • RightScale, manages multiple Clouds unlocking your infrastructure • Dell Boomi, IT management on the Cloud • Rackspace, the “other” public Cloud, acquired CloudKick, great Cloud monitoring tool • Puppet, Chef, are two well established automation tools • Hadoop, on the way to become a standard for highly scalable distributed batch jobs • VMWare Octopus, the Cloud file exchange for the Enterprise • VBlock, Cisco, Vmware EMC to bridge Cloud with existing operational models • Nirvanix, simply the best object storage on the market: now partnering with IBM • Fujitsu Global Cloud Platform, offers a Cloud infrastructure in Belgium • Thales, making the Cloud more secure by dispersing information • CA, acquired 3Tera and delivers Cloud IT management software • IBM SmartCloud, the integrated application platform • Nolio, is application release automation for development and dev-Ops • Desktone, desktop PCs as a service! © Gabriele Bozzi 19

Appendix B: references • The Enterprise Cloud Leadership Council http://www.tmforum.org/EnterpriseCloudLeadership/8009/home.html • Van Valen “The Red Queen Hypothesis” http://en.wikipedia.org/wiki/The_Red_Queen_hypothesis • Simon Wardley (Lef.csc.com) “Situation Normal, everything must change” http://www.youtube.com/watch?v=5Oyf4vvJyy4 • William Stanley Jevons: “The Coal Question” http://en.wikipedia.org/wiki/The_Coal_Question • Nicholas G. Carr: Does IT Matter? Information Technology and the Corrosion of Competitive Advantage (Harvard Business School Press) © Gabriele Bozzi 20

Appendix C: Useful links • IBM Implements secure Government Cloud: http://bit.ly/aRjEWp • Thales and Layer 7 to make Cloud more secure: http://bit.ly/pDp7Ac • 90 Cloud companies to watch in 2011: http://bit.ly/fvGbci • Cloud Computing use cases newsgroup: http://bit.ly/p9yGga • CloudScaling builds Clouds, Google-class Clouds: http://cloudscaling.com/ • TibCo Silver Cloud platform: http://bit.ly/qkEfCi • Enstratus, Cloud governance utilities and consulting: http://bit.ly/8geaNf • Cloud functional and performance testing from Soasta: http://www.soasta.com/ • The Belgian Cloud marketplace, IaaS, DaaS: http://bit.ly/q196mo © Gabriele Bozzi 21

Appendix D: On theinevitability of theCloudThis cartoon appeared on Geek & Pokein March 2011It was meant to be humoristicAmazon presented on October 2011“Silk”; a browser that runs on their Cloudand is accessible by a rendering engineon Amazon Kindle FireResistance is futile… © Gabriele Bozzi 22

Appendix E: EnterpriseCloudsMarket Ubiquity PaaS integration levels MS • Strong Hyper-V • Competitive Azure Demand OpenStack • Evolving Citrix Gigaspaces HP, Dell, Vblock Likely sell-out Fujitsu, IBM Cloud Foundry HP, Dell, CA Fujitsu Applogi c Oracle Exalogic Nimbul a Strategic control Agnosticiy The selection is not exhaustive of the current market’s status © Gabriele Bozzi 23

Do you need Cloud? An info session for a Belgian financial institution

by Gabriele Bozzi

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Do you need Cloud? An info session for a Belgian financial institution Presentation Transcript