Cloud Computing 101 Workshop Sample

Cloud Computing 101SAMPLEIssue 2April 28th 2012www.alanquayle.com/blog

Outline: Part 1: Introduction to Cloud Computing• Confusion and Cloud-Washing• Cloud Consolidation• History• Vision• Definitions – focus on NIST• Cloud computing reference architecture• Actors, Brokers, Consumers, Auditors,• Cloud Types: Public, Private, Community and Hybrid• Orchestration and Management• Business support, security and privacy• Cloud Benefits and Issues• Cloud Misconceptions• The Open Group Survey 2011 2

Outline: Part 2: Getting into the Details• Mapping suppliers and technologies in Cloud Computing• Understanding the economics behind the benefits• Quantifying the benefits• Cloud market taxonomy and market size• CSPs and Cloud Computing o AT&T, BT, DT, NTT, Orange, SingTel, Verizon• Mapping the workloads• SOA and the Cloud• Cloud Computing in Asia 3

Outline: Part 3: Understanding the Components• Summary: Web 2.0, SaaS, Utility Computing, Virtualization, SLAs, Autonomic computing, Grid technology, Web Services, Service Oriented Architectures, Free and Open Source Software• Deep Dive: Virtualization o History o Issues and Trends o Supplier review: Citrix, IBM, Linux, Microsoft, Novell, Symantec, Oracle, VMWare• Deep Dive: Data Centers o History and the drive for efficiency and availability o Changes and pressures on DC – drive for DC management o Capex and opex DC costs o DC economics drives cloud computing• Deep Dive: Force.com, Google, Microsoft and Amazon o Force.com o Google App Engine o Microsoft Azure o Amazon Web Services • Netflix deep dive • AWS walk-through 4

Outline: Part 4: Implementation• Survey - what workloads others are moving into the cloud• Summary o Key points in cloud migration o Industry : Workload : Cloudability Space• Project Plan – example from IBM• Decision Tree for implementing Cloud Computing o The Open Group decision tree• Security o Reviewing SAS70, PCI DSS, ISO27001, NIST, HIPAA, FISMA, CoBIT, Data Protection Directive, practical aspects• Architectural Review• Concluding Remarks 5

Cloud ComputingIntroduction 6

Outline: Part 1: Introduction• Confusion and Cloud-Washing• Cloud Consolidation• History• Vision• Definitions – focus on NIST• Cloud computing reference architecture• Actors, Brokers, Consumers, Auditors,• Cloud Types: Public, Private, Community and Hybrid• Orchestration and Management• Business support, security and privacy• Cloud Benefits and Issues• Cloud Misconceptions• The Open Group Survey 2011 7

What is cloud computing? 8

Gartner view: hype cycle 9

We Live in Hyped Times!• “Amazon and PSN outages wont halt cloud revolution.” source The Register• “SURVEY: Future-proofing the cloud.” source Network World• “Virtualization, cloud computing to dominate Interop.” source Network World• “Is Your Data Center Ready for Cloud Computing?” source Web Buyers Guide• “Demystifying the Cloud – A Conversation with Dell’s CIO and CTO!” source Baseline Briefing• “Cloud-enabled Wi-Fi: Less Dollars, More Sense” source Network World• “Apple’s new services are expected to include a "digital locker" solution enabling consumers to store their iTunes music, movie and television libraries on Apple servers for access on multiple iOS-based devices.” source Fierce Mobile Content.• “Brocade Unveils CloudPlex cloud architecture, an open framework for building virtualized data centers, and offered a look at new technologies coming up in the near future to help make such data centers possible. “ source CRN• “CenturyLink goes from local to global player with Savvis acquisition.” source Fierce Free Software Foundation founder Richard Stallman called cloud computing, “worse than stupidity.” Bottom-line: If you’re systems are down or you loose customer data its not the Cloud Provider that suffers / goes out of business – they just issue a credit for the disruption. 11

First Phase of Cloud Consolidation• Verizon acquired Terremark, a Infrastructure / Platform as a Service (I/PaaS) provider, for $1.4 billion, to provide IT infrastructure services targeting the enterprise market.• Dell spent more than $2 billion in six months acquiring cloud technologies, including PaaS provider Boomi, and is investing another $1 billion in a group of global data centers.• IBM acquired Cast Iron, Boomi’s competitor.• Time Warner Cable acquired NaviSite.• CenturyLink acquired Savvis• Microsoft and Toyota forged a strategic partnership to build a global platform for Toyota Telematics Services using Windows Azure.• CA Technologies and Unisys entered into a joint venture that combines CA’s virtualization and service management products with Unisys’ virtualization and cloud advisory, planning, design and implementation services.Likely see further consolidation as Telcos realizes their weaknesses in selling Cloud into 12 enterprise – particularly small medium enterprise

Evolution• Cloud computing has evolved through a number of phases which include grid and utility computing, application service provision (ASP), and Software as a Service (SaaS).• But the overarching concept of delivering computing resources through a global network is rooted in the sixties. Those Sixties!!! 13

John McCarthy (1927-2011), 1961“computation maysomeday beorganized as apublic utility.” 14

• One of the first milestones for cloud computing was the arrival of Salesforce.com in 1999, which pioneered the concept of delivering enterprise applications via a simple website. 15

• The next development was Amazon Web Services in 2002, which provided a suite of cloud-based services including storage, computation and even human intelligence through the Amazon Mechanical Turk. 16

• Then in 2006, Amazon launched its Elastic Compute cloud (EC2) as a commercial web service that allows small companies and individuals to rent computers on which to run their own computer applications. 17

• Another big milestone came in 2009, as Web 2.0 hit its stride, and Google and others started to offer browser- based enterprise applications, though services such as Google Apps.Purelyrepresentationalpurposes only! 18

• 2009 also saw the advent of Microsoft into the cloud computing game with its product Windows Azure• Azure as an operating environment "designed to manage extremely large pools of computational resources." The simple explanation is that Microsoft wants customers to run their Windows-based applications over the Internet using Microsofts data centers, with Azure being the system that organizes resources and handles spikes in demand. 19

And Now…….• Many IT professionals recognize the benefits cloud computing offers in terms of increased storage, flexibility and cost reduction• Considerations such as security, data privacy, network performance and economics are likely to lead to a mix of cloud computing centers both within the company firewall and outside of it 20

The Dream of Cloud Computing Integrated Circuit Utility Computing Foundries • Semiconductor Fabs Expensive • New Datacenters Very Expensive – Typically > $1 Billion – Only a Few Companies Can – Too Much for Most Designers Afford Huge Datacenters • Fabs Take Outside Work • Utility Computing  Datacenter – Fabs Amortize Cost Owners Amortize Costs – Other Designers Make Chips – Utility Computing Users Get Advantages of Elasticity • Allowed Explosion of Designs – Datacenter Resources Shared – More Players Afford Rented Fab Across Many Users But a private cloud doesn’t deliver scale? 21

The NIST Definition of Cloud Computingo Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction. This cloud model promotes availability and is composed of five essential characteristics, three service models, and four deployment models. Characteristics 1. On-demand self-service Service models 2. Broad network access 1. Cloud Software as a Service (SaaS) 3. Resource pooling 2. Cloud Platform as a Service (PaaS) 4. Rapid elasticity 3. Cloud Infrastructure as a Service (IaaS) 5. Measured service Deployment models 1. Private cloud 2. Community cloud 3. Public cloud 4. Hybrid cloud 22

Why Now? From T-Systems, who has delivered SAP dynamic services since 2004 23

NIST 3 Cloud Service Models• Cloud Software as a Service (SaaS) o Use provider’s applications over a network• Cloud Platform as a Service (PaaS) o Deploy customer-created applications to a cloud• Cloud Infrastructure as a Service (IaaS) o Rent processing, storage, network capacity, and other fundamental computing resources• To be considered “cloud” they must be deployed on top of cloud infrastructure that has the key characteristics 24

Service Model Architectures Cloud Infrastructure Cloud Infrastructure Cloud Infrastructure IaaS Software as a Service PaaS PaaS (SaaS) SaaS SaaS SaaS Architectures Cloud Infrastructure Cloud Infrastructure IaaS Platform as a Service (PaaS) PaaS PaaS Architectures Cloud Infrastructure IaaS Infrastructure as a Service (IaaS) Architectures 25

NIST Reference Model: Background• The NIST cloud computing definition is widely accepted as a valuable contribution toward providing a clear understanding of cloud computing technologies and cloud services.• It provides a simple and unambiguous taxonomy of three service models available to cloud consumers: cloud software as a service (SaaS), cloud platform as a service (PaaS), and cloud infrastructure as a service (IaaS).• It also summarizes four deployment models describing how the computing infrastructure that delivers these services can be shared: private cloud, community cloud, public cloud, and hybrid cloud.• Finally, the NIST definition also provides a unifying view of five essential characteristics that all cloud services exhibit: on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service.• These services and their delivery are at the core of cloud computing. In the cloud computing model, the primary focus is a more economic method of providing higher quality and faster services at a lower cost to the users.• In the traditional IT service delivery model, there is a large emphasis on procuring, maintaining and operating the necessary hardware and related infrastructure. The cloud computing model enables CIOs, IT project managers and procurement officials to direct their attention to innovative service creation for the customers. 26

NIST Reference Model: Background• The NIST cloud computing reference architecture focuses on the requirements of “what” cloud services provide, not a “how to” design solution and implementation.• The reference architecture is intended to facilitate the understanding of the operational intricacies in cloud computing.• It does not represent the system architecture of a specific cloud computing system; instead it is a tool for describing, discussing, and developing a system-specific architecture using a common framework of reference.• The design of the NIST cloud computing reference architecture serves the following objectives: o to illustrate and understand the various cloud services in the context of an overall cloud computing conceptual model; o to provide a technical reference to USG agencies and other consumers to understand, discuss, categorize and compare cloud services; and o to facilitate the analysis of candidate standards for security, interoperability, and portability and reference implementations. 27

NIST Cloud Computing Reference Architecture• The NIST cloud computing reference architecture defines five major actors: o cloud consumer, o cloud provider, o cloud carrier, o cloud auditor and o cloud broker.• Each actor is an entity (a person or an organization) that participates in a transaction or process and/or performs tasks in cloud computing.• A cloud consumer may request cloud services from a cloud provider directly or via a cloud broker.• A cloud auditor conducts independent audits and may contact the others to collect necessary information. 28

NIST Reference Model 29

Actors in Cloud Computing 30

Cloud Benefits & Issues 31

Benefits• Shorter provisioning times: The provisioning of servers, applications, and application environments is far quicker and cheaper to do leading to quicker time-to-market for new products and services, shorter project timescales, and faster benefit realization.• Reduced capital outlay: The ability to buy computing resources, whether applications or infrastructure on a pay-as-you-go basis reduces the need for capital investment in hardware and software. This in turn may make it easier to finance projects, which can rely upon revenue generation to finance project outlay far sooner than would otherwise be the case. The burden of upfront investment and thereafter capital depreciation and the risk of stranded investments should a project fail is reduced.• Allows more use of “try before you buy”: The ability to try a new product or service is enhanced through the use of Cloud Computing services where the investment in trials and proof-of-concept activities is much reduced. Trialing also reduces the risk of later implementations.• Reduces the cost of “one-off” activities: One-off activities which would otherwise be extremely costly to finance with purchased or traditionally leased computing resources can be more cheaply provisioned using Cloud Computing; e.g., migration or data cleansing/conversion activities. 32

Cloud Misconceptions 33

SaaS is not dependent on PaaS which is not dependent on IaaS – They’re independent• This illustration implies a relationship between IaaS, PaaS, and SaaS and gives rise to the idea that the three service models are necessarily layered one upon the other. Although both software and platform services will rely upon some elements of infrastructure (the fundamental “plumbing” of IT; e.g., servers, network, storage), to infer that all SaaS is founded upon a PaaS and that in turn upon IaaS is an extrapolation which will not stand closer analysis.• Were this true, then for the service model and characteristics of Cloud Computing to apply then each layer would have to be separately deliverable as a service with all the attendant components allowing metering, account management, billing, self-service, etc.• In reality, in a given purchase or consumption of Cloud Computing services, the interaction is with one of these layers. One is either buying or consuming software, platform, or infrastructure. That the means by which the provision of this service is achieved is invisible and of no concern is one of the founding concepts of Cloud Computing. Although it is tempting to assume that all sellers of SaaS services have reached extremely high levels of maturity in their provision of infrastructure, that they employ sophisticated and highly effective virtualization, for example, may not actually be the case. At the level of service interaction of a consumer of SaaS it will not be apparent and nor should it be. 34

The OpenGroup CloudComputing Survey 2011 35

Part 2: Getting into theDetails 40

Outline: Part 2: Getting into the Details• Mapping suppliers and technologies in Cloud Computing• Understanding the economics behind the benefits• Quantifying the benefits• Cloud market taxonomy and market size• CSPs and Cloud Computing o AT&T, BT, DT, NTT, Orange, SingTel, Verizon• Mapping the workloads• SOA and the Cloud• Cloud Computing in Asia 41

One More Look at the Cost Model How Much You Make Total in a “Pay How Much You Make The Compute Cost as You Go” Cloud Per User Hour in a of the Work in a “Pay as You Go” Cloud DatacenterUserHourscloud × (revenue – Costcloud) ≥ Costdatacenter UserHoursdatacenter × (revenue – ) Utilization But You Pay for the Whole Utilization Datacenter Even When It Is Assumptions Make How Much You Make Underutilized! a Big Difference in Total in a Datacenter the Costs of Cloud Implementation of Your App Have to Increase the Charge for versus Datacenter! the Work You Do to Make Up for Underutilization 42

Cloud’s goal: flip this equation 30% 70%On-Premise Your Managing All of theInfrastructure Business “Undifferentiated Heavy Lifting” ConfiguringCloud-Based More Time to Focus on Your CloudInfrastructure Your Business Assets 70% 30% 44

Companies have different motivations for leveraging cloud Analytics & Time to Value Employee Risk & Security Productivity ComplianceOperations support 9major commands, Creates an Enable collaboration 34,000-employeenearly 100 bases, & ecosystem for PayPal across 300K global bank deploying a700,000 active military 3rd Party developers employees as well as its private cloud frompersonnel around the network of customers, IBM to centralizeworld. Design secure Reduces developer partners and suppliers. management ofcloud infrastructure for effort to deploy a work Saving 30 minutes per desktops via andefense & intelligence environment with day or 120hr per year enterprise class datanetworks; insights seamless PayPal Test per person. center rather than atabout cyber attacks, Sandbox access the user stations,network, system or IBM LotusLive has 18 Gets greater remoteapplication failures, million users in 99 flexibility withoutwhile automatically countries sacrificing control topreventing disruptions. improve efficiency. 45

IBM Cloud Business Model ROI Analysis Impact: Reduction of Total Cost of Ownership of Data Center Infrastructure New100% Development Liberated Reduced Capital Expenditure funding for - Improved utilization reduces requirement for Software new new capital purchases Costs development, Strategic transformatio Change Reduced Operations Expenditure n investment Capacity - Lower facilities, maintenance, energy, IT Power or direct service delivery and labor costs Costs saving Additional Benefits Deployment (1- - Reduced risk, less idle time, more efficientCurren time) use of energy, acceleration of innovation t IT Labor Costs projects, enhanced customer service Spend (Operations Software and Costs Maintenance) Business Case Results Power Costs Hardware, labor & Annual savings: $3.3M (84%) (88.8%) power from $3.9M to $0.6M Hardware Labor Costs savings Costs ( - 80.7%) reduced Payback Period: 73 days (annualized) annual cost Hardware Costs of operation Net Present Value (NPV): $7.5M ( - 88.7%) by 83.8% Internal Rate of Return (IRR): 496% Note: 3-Year Depreciation Period with 10% Discount Return On Investment (ROI): 1039% Rate

Full Cloud Taxonomy Level Of SharingPublic IaaS PaaS SaaS BPaaS PURECloud CLOUD@ Global MARKETProviderVirtualPrivate Dynamic Integration- Dynamic DynamicCloud Infrastructure as-a-Service Apps BPO@Dedicated Services Services ServicesProvider EXTENDED CLOUD Infrastructure Middleware Apps BP MARKETPrivateCloud Virtualization Virtualization Virtualization Virtualization@ In-house Tools Tools Tools ToolsData Center Infrastructure Middleware Applications Business Business Processes Value 47

Cloud market size 2012 Level Of Sharing Public PURE Cloud @ Global ~$15b Market CLOUD Provider MARKET Virtual Private Cloud @ ~$28b Market Dedicated Provider EXTENDED CLOUD Private MARKET Cloud @ In-house ~$11b Market Data Center Infrastructure Middleware Applications Business Business Processes Value 48

Cloud market size 2012 Cloud Service Master Data Change Availability Level Of Management Management & Config & Performance Sharing Billing Public IaaS PaaS SaaS BPaaS Security Cloud @ Global Provider $1.5b $500m $12.5b $500m Virtual Service Private Dynamic Integration- Dynamic Dynamic Desk Cloud Infrastructure as-a-Service Apps BPO @ Services Services Services Dedicated Provisioning Provider $8.3b $300m $6.2b $13.2b Infrastructure Middleware Apps BP Private Cloud Virtualization Virtualization Virtualization Virtualization @ In-house Tools Tools Tools Tools Backup Data Center $3.1b $300m $4.5b $3.1b & Recovery Infrastructure Middleware Applications Business Business Processes ValuePurpose is to demonstrate the roles cloud computing plays and current market size 49

Cloud Services as a % of IT Worldwide IT Spending by Consumption Model 600 IT Cloud Services On-Premise IT 500 10% Worldwide IT Spending ($ billion) 44 400 5% 17 300 CAGR 26% 416 4% 200 359 100 0 2009 2013 50

Cloud Services Growth Impact Sources of Incremental IT Spending Growth in 2013 Cloud vs. Traditional Products 485 460.4 480 Net new IT growth Worldwide IT Spending ($ billion) 475 27% = $27.3 billion 470 IT Cloud Services growth 465 460 73% Traditional IT product growth 455 IT Cloud 433.1 450 445 440 435 430 2012 2013 51

Main topics to be addressed prior adoption of cloudcomputing paradigm• Security• Availability• Performance• Interoperability• Flexibility• Personalization• Unit costs• One time transition costs• Total cost of ownership• SLA stipulations• Liabilities of the provider• Lock-in risks and implications It’s the same as any Service Provider Decision: Don’t get locked-in 52

Cloud Computing andTelcos 53

Telcos in the Cloud• Telcos committed US$11 billion to cloud pursuits in 2011 o Eight out of 10 transactions involve datacenter assets• Service differentiation remains poor o 122 new services, 70% mass-market offers, heavy SaaS usage• Telco strengths are underplayed o Security and cloud mobility aren’t creating an unfair advantage• ROI is a long game…. o Cloud services contribute a single-digit percentage of telco revenues today• Few have solve the problem of enterprise credibility 54

AT&T 57

Cloud APIs 58

119Cloud APIsOnProgrammable-Web 59

Deutsche Telekom 60

T-Systems Cloud Positioning T-Systems has created significant thought leadership collateral in the Cloud Computing space. Its positioning of Cloud computing has received broad endorsement, its Dynamic Enterprise Cloud positioning has won it significant business in Germany. If offers end to end SLAs, from the desk top to the data center. While other operators have struggled to make that end to end offer T- Systems was one of the first (in Germany anyway.) “In Germany we are the only provider to offer cloud services with an end to end SLA.” source VP Networks 61

NTT 62

Keane provides extensive IT credentials in SAP and Oracle implementations across many industries as well as across the enterprise application stack. 63

Keane becomes the face of NTT Data America, the solutions group within NTT Data aims to achieve common 64 solutions across regions, though the mobile link remains weak.

Intelligroup has extensive SAP and Oracle implementation experience in Pharmaceutical, manufacturing and consumer goods verticals. 65

Value Team is an Italian IT Consultancy, that is also strong in LATAM, again buying IT market share. Deal was 66 announced in April 2011. With this acquisition NTT Data now has solid global coverage.

How the NTT Groups Fits TogetherDimension Data focuses on deployment (of communication platforms – Cisco and Microsoft) and maintenance of IT systems. NTT Communications focused on transport services. NTT Data focused on IT Services. However, in practice there are many overlaps in Europe, Latin America 67 and North America.

Orange Business Services 68

Cloud Roadmap 69

OBS Cloud Roadmap 70

Verizon Business 72

Everything as a Service Evolution 73

Verizon Buys Terremark• In January Verizon announced plans to acquire Terremark Worldwide for U.S.$1.4 billion or U.S.$19 per share in cash—an acquisition price that is four times Terremark’s projected 2011 revenue of U.S.$351 million.• The acquisition highlights the unique market dynamics of cloud computing. Not since the dot-com boom has a market seen such explosive growth in startups together with rapid consolidation and acquisition. It’s a land grab, and Verizon just bought a big chunk.• In September 2010, Verizon entered into a partnership with Terremark that focused on the SMB segment. Verizon’s Computing as a Service (CaaS) SMB runs on Terremark’s infrastructure and data centers, but Terremark also has a strong presence in the large enterprise and federal government segments.• The acquisition instantly gives Verizon a stronger position in the enterprise cloud computing market.• The acquisition is also good news for enterprises, because those that want to adopt cloud computing services now have more and better options.• Also in January Hewlett-Packard announced its HP Enterprise Cloud Services-Compute, a service that expands its offerings and enables it to position hybrid cloud to enterprises. Verizon’s acquisition of Terremark demonstrated VZB was committed to dominating the Cloud Computing business . In part VZB was struggling with CaaS in gaining broader market adoption – Terremark solves this issue. 74

Verizon Benefits• Data center scale and build-out skills. o Terremark has 567,000 square feet of data center space available as of Q2 2011, with significant room to grow. More importantly, Terremark knows how to build data centers that are uniquely able to deliver cloud computing services to enterprises.• Growth in managed services. o Fifty percent of Terremark’s business is higher margin managed services, including enterprise cloud computing services.• Strong security skill set. o According to Yankee Group’s Anywhere Enterprise: 2010 U.S. Cloud Computing FastView Survey, security is still one of the leading barriers to enterprise adoption of cloud computing (see next slide). o Coupled with Verizon’s acquisition of CyberTrust, Terremark’s Federal Information Security Management Act (FISMA)-compliant data centers and best-of-breed cloud security expertise give Verizon meaningful competitive differentiation. VZB now has the best security credentials of any cloud based service provider. If it canpersuade the broader market of these credentials it has the ability to dominate the global market. 75

Example CaaS portal 76

CloudSwitch Bought by Verizon in August 2011 77

Why CloudSwitch? 78

Mapping the WorkloadsSome Practical Discussion 79

Defining the Map• Start by grouping enterprise applications into classes of applications.• Then depending on the lifecycle ( e.g. Test & Development, Staging or Production) , usage environment and security requirements of a class of applications, an enterprise architect can define a set of principles and guidelines to help decide when to use cloud computing service and what type of service to use.• Next slide shows an example from an enterprise architect of a well known global brand. 80

Example of One Enterprises’ MappingClass of Enterprise Test & Staging ProductionApplications DevelopmentBusiness Virtual Private Virtual Private Cloud Private CloudCommunications CloudCRM (e.g. SAP, Public Cloud Virtual Public Cloud Public CloudSalesforce.com)Applications Public Cloud Virtual Private Cloud Private Cloudsupporting criticalbusiness processesProductivity Public Cloud Virtual Private Cloud Public CloudImprovementFinancial Virtual Private Virtual Private Private Cloud Cloud Cloud 81

Reality Check: Its not just security• One of the main barriers to enterprise adoption of cloud computing service is the effort required to migrate corporate applications from their internal hosting service to public cloud or virtual private cloud and vice versa.• Technology such as Verizon CloudSwitch service is now available to allow an enterprise user to seamlessly switch applications between their internal (e.g private cloud ) hosting service and Virtual Private Cloud or Public Cloud.• This type of technology should help drive down the barrier to future user adoption of third party provided cloud computing service. 82

Cloud Migration Reality Check Part 1• Standalone web applications built specifically for a particular cloud can be rolled out quickly and relatively easily using templates offered by the cloud provider or software from third parties.• But it’s far more complex to run an enterprise application in a preferred public cloud while staying integrated with the internal environment and its associated services, processes, tools, and relationships.• Moving an enterprise application to a cloud takes extensive manual configuration, complex engineering, and trial and error — with success not always assured. A whole landscape of specifications for OS versions, storage, networks, and management tools has to be mapped and modified for an external environment that is usually unfamiliar to internal IT staff.• In addition, the applications almost always need to reach back to services and processes in the data center, setting up a number of integration issues that are not easily resolved. Thus, migration projects often take weeks or longer, preventing many companies from even considering cloud deployment. 83

Cloud Migration Reality Check Part 2• The separate, largely isolated environment imposes management challenges that don’t occur internally when the application is under enterprise control.• These same challenges also apply to new enterprise applications developed in the cloud since they also require integration with data center tools, processes, and services.• Everything from authentication and authorization to internal databases and basic services has to be managed separately for an application to run in the cloud. 84

Source of Cloud Migration Delay and Blocking• 1. Rebuilding the application stack within the cloud• 2. Setting up the network• 3. Adding end-to-end security• 4. Managing the application in a separate environment 85

1. Rebuilding the Application Stack• The cloud has a model similar to a virtualized data center environment where users or administrators can provision virtual resources such as CPU, memory, and storage from a pool of physical resources.• However, the processes used for building, launching, and managing servers in a public cloud are very different from those used internally.• Most cloud providers today require you to start from one of their base templates. These templates are customized for a particular environment, including tools, drivers, agents, or specific configurations for leveraging the available networking and storage capabilities.• Even when a provider offers a method for uploading existing application images, the drivers, tools, and modifications associated with an application must be included for compatibility with the chosen cloud environment.• This creates a different starting point and will affect how application stacks are built and maintained.• Using the cloud requires that these components be rebuilt to match the cloud provider’s environment. Many applications take advantage of services that exist within a data center, such as DNS or LDAP, that are not available in the cloud.• This requires re-architecting the applications that depend on these services, whether duplicating the services within the cloud, building methods to extend existing services to the cloud, or some combination of the two.• These differences between the data center and the cloud trigger a chain of integration issues including potential changes in base operating systems, storage, networking, virtualization, and shared services. 86

1. Rebuilding the Application Stack: OS• The cloud provider will specify operating system versions as well as versions for related components such as storage and network devices, drivers, and virtualization tools.• However, complying with their requirements can be problematic. For example, in Linux environments, cloud providers require a particular kernel version which must be matched by any application-specific kernel modules.• This is particularly difficult when using third-party software since the required code and/or tools may not be available to allow recompilation.• The hypervisor version also has to match, as do the drivers and tools which interact with it. Conflicts may not be easy to resolve — for example, if a cloud provider is using VMware ESX 3.5, and the enterprise has already moved to ESX 4.0. 87

1. Rebuilding the Application Stack: Storage• Storage and data management challenges in the cloud result from the diverse and often unfamiliar processes offered by cloud providers.• Cloud providers define the relationship between servers and storage, and often impose constraints on everything from allocation size limits to the ways in which storage is managed. Enterprise customers will also have to adjust to two major storage differences: ephemeral storage and lack of shared storage.• Perhaps one of the most disorienting features in the cloud is the use of ephemeral storage, which means that if you turn off the server, or it has a hard fault, everything on the drive is lost (data, boot parameters, updates, logs, etc.).• This type of storage is fine for stateless servers (think web tier servers) which receive the data they need from another source during operation, but is impossible to use for many enterprise applications.• The introduction of this type of storage into your operating environment adds a management burden since you have to actively avoid using it for things that are important to you. 88

1. Rebuilding the Application Stack: Storage• The second major storage difference is the general lack of shared storage in the cloud. Shared storage is widely used in high availability and redundancy configurations, where if one server goes down, others pick up the workload because they• map to the same disk.• Today’s clouds are unable to map a storage device to more than one server, so shared storage in the cloud is currently not possible. As a result, high availability must be achieved through some different and less proven architecture.• This type of fundamental change highlights a major problem when adapting existing applications to meet cloud requirements: the need to redesign the application to run without a “tried and true” solution.• Further, if the application is developed using third party software (such as Oracle), there may be no opportunity to “redesign” it. Rather, you would have to select a different product or manufacturer to get the necessary functionality. 89

1. Rebuilding the Application Stack: Replicating DataCenters• Most enterprise applications work with a range of tools and services such as identity management, monitoring, and directory services. When applications which rely on these services are moved into the cloud, or new ones are created there, the applications become disconnected from the data center, breaking important relationships and dependencies.• Therefore these key services and control processes need to be modified, replaced, or possibly even eliminated to accommodate the cloud provider’s environment. o Do you create a separate version of internal processes and control systems to run independently within the cloud? o Do you implement new services in the cloud with similar capabilities and find a way to tie them back to the data center? o Do you simply retool or build the application so it doesn’t depend on those services?• The usual approach is to engage a professional services firm to assist in porting and integrating the environment, or the cloud provider may provide similar services as part of their managed hosting. The typical result is a lot of heavy (and expensive) lifting in order to make it work. 90

SOA and the CloudService Oriented Cloud ComputingInfrastructure 91

Cloud Computing In AsiaFrost and Sullivan Analysis 92

Part 3: Understanding theComponents: EnablingTechnologies 93

Outline: Part 3: Understanding the Components• Summary: Web 2.0, SaaS, Utility Computing, Virtualization, SLAs, Autonomic computing, Grid technology, Web Services, Service Oriented Architectures, Free and Open Source Software• Deep Dive: Virtualization o History o Issues and Trends o Supplier review: Citrix, IBM, Linux, Microsoft, Novell, Symantec, Oracle, VMWare• Deep Dive: Data Centers o History and the drive for efficiency and availability o Changes and pressures on DC – drive for DC management o Capex and opex DC costs o DC economics drives cloud computing• Deep Dive: Force.com, Google, Microsoft and Amazon o Force.com o Google App Engine o Microsoft Azure o Amazon Web Services • Netflix deep dive • AWS walk-through 94

Location and Scale: It’s Easier toShip Data than Power!• Datacenters Are Popping Up in Surprising Places o Quincy, WA • Google, Microsoft, Yahoo!, and Others… o San Antonio, TX • Microsoft, US NSA, and Others… Price per Kilo Where? Possible Reason Why Watt Hour 3.6 cents Idaho Hydroelectric Power; Not Sent Long Distance 10.0 cents California Electricity Transmitted Long Distance over the Grid; Limited Transmission Lines in the Bay Area; No Coal Fired Electricity Allowed in California. 18.0 cents Hawaii Must Ship Fuel to Generate Electricity 95

Data Center Economics – simply scaleScale is the main driver for cloud computing – its 5-7 times cheaper than doing it in house. This is the fundamental principle of Amazon’s business model. So why focus on a private cloud when it doesn’t have scale? 96

Understanding theInternet Companies 97

Mapping the Cloud Development Platform Landscape Enterprise CentricThe challenge for Google and Amazon is can theybreak out of the ‘geek developer’ into mainstreamenterprise, or will Oracle and IBM’s approach ofproviding integrated web-centric and enterprise-centric solutions be preferred by the buyers ofenterprise services?See Oracle and IBM analysis for more details on theirapproach. Move into hosted / Best managed solutions HighEffort Availability Adding capabilities Improving Availability Web Centric 98

Amazon Web Services

AWS Customers: Netflix.com - More than 9 Billion USD market cap - Migrating 100% on Amazon Web Services - So far: movie lists, website search, transcoding, recommendations, etc. - 24 M subscribers, 100k+ DVD titles "AWS let us focus on innovation" 101

AWS Customers: Customers in 190 Countries 116

AWS Customers: Asia Pacific customers 117

Part 4: Implementation 118

Outline: Part 4: Implementation• Survey - what workloads others are moving into the cloud?• Summary o Key points in cloud migration o Industry : Workload : Cloudability Space• Project Plan – example from IBM• Decision Tree for implementing Cloud Computing o The Open Group decision tree• Security o Reviewing SAS70, PCI DSS, ISO27001, NIST, HIPAA, FISMA, CoBIT, Data Protection Directive, practical aspects• Architectural Review• Concluding Remarks 119

Survey: Implementing inYour OrganizationRecent Survey 120

Implementing in YourOrganizationProject Plan 122

Workloads ready for cloud computing • Analytics • Desktop and devices – Data mining, text mining or – Desktop other analytics – Service/help desk – Data warehouses or data marts • Development and test – Transactional databases – Development environment • Business services – Test environment – Customer relationship • Infrastructure management – Application servers (CRM) or sales force automation – Application streaming – E-mail – Business continuity/ – Enterprise resource planning disaster recovery (ERP) applications – Data archiving – Industry-specific applications – Data backup • Collaboration – Data center network capacity – Audio/video/Web conferencing – Security – Unified communications – Servers – VoIP infrastructure – Storage – Training infrastructure – Wide area network (WAN) capacity Source: IBM Market Insights, Cloud Computing Research, July 2009.

Decision Tree for CloudComputing 124

Summary 125

Implementing in YourOrganizationArchitecture 126

Concluding Remarks 127

Gartner view: hype cycle 128

But it does make sense for some functions within some organizations…. 130

NIST Reference Model 131

Elasticity, Risk, and User Incentives Services Will Prefer Utility Computing to a Private Cloud When: Demand Varies over Time Demand Unknown in Advance Provisioning for Peak Leads to Web Startup May Experience a Underutilization at Other Times Huge Spike If It Becomes Popular Pay by the Hour Pay as You Go Does Not Require (Even if the Hourly Rate is Higher) Commitment in Advance The Value of Cost AssociativityUserHourscloud × (revenue – Costcloud) ≥ UserHoursdatacenter × (revenue – Costdatacenter ) Utilization 132

Cloud Is Mostly Driven by Money Economics of Cloud Computing Are Very Attractive to Some UsersCloud Computing Will Predicting Application Track Cost Changes Growth HardBetter than In-HouseInvestment Risks May In-House, You Must Be Reduced Provision for Peak 133

Cloud’s goal: flip this equation 30% 70%On-Premise Your Managing All of theInfrastructure Business “Undifferentiated Heavy Lifting” ConfiguringCloud-Based More Time to Focus on Your CloudInfrastructure Your Business Assets 70% 30% 134

Benefits• Shorter provisioning times• Reduced capital outlay• Allows more use of “try before you buy”• Reduces the cost of “one-off” activities• Costs associated with testing can be reduced• Reduction in internal data center capacity• Better architecture and design• Consolidation and central administration:• Greener IT• Resources• Improved administration and maintenance:• Better quality services available from Cloud Computing:• Better security• Flexibility• Improved financial control 135

Issues• IT security and compliance• Not mature• Lack of clear definition of components• Software licensing• Service delivery clarity• Calculating costs of service• Integration• Green IT 136

IBM Cloud Business Model ROI Analysis Impact: Reduction of Total Cost of Ownership of Data Center Infrastructure New100% Development Liberated Reduced Capital Expenditure funding for - Improved utilization reduces requirement for Software new new capital purchases Costs development, Strategic transformatio Change Reduced Operations Expenditure n investment Capacity - Lower facilities, maintenance, energy, IT Power or direct service delivery and labor costs Costs saving Additional Benefits Deployment (1- - Reduced risk, less idle time, more efficientCurren time) use of energy, acceleration of innovation t IT Labor Costs projects, enhanced customer service Spend (Operations Software and Costs Maintenance) Business Case Results Power Costs Hardware, labor & Annual savings: $3.3M (84%) (88.8%) power from $3.9M to $0.6M Hardware Labor Costs savings Costs ( - 80.7%) reduced Payback Period: 73 days (annualized) annual cost Hardware Costs of operation Net Present Value (NPV): $7.5M ( - 88.7%) by 83.8% Internal Rate of Return (IRR): 496% Note: 3-Year Depreciation Period with 10% Discount Return On Investment (ROI): 1039% Rate

Workloads ready for cloud computing • Analytics • Desktop and devices – Data mining, text mining or – Desktop other analytics – Service/help desk – Data warehouses or data marts • Development and test – Transactional databases – Development environment • Business services – Test environment – Customer relationship • Infrastructure management – Application servers (CRM) or sales force automation – Application streaming – E-mail – Business continuity/ – Enterprise resource planning disaster recovery (ERP) applications – Data archiving – Industry-specific applications – Data backup • Collaboration – Data center network capacity – Audio/video/Web conferencing – Security – Unified communications – Servers – VoIP infrastructure – Storage – Training infrastructure – Wide area network (WAN) capacity Source: IBM Market Insights, Cloud Computing Research, July 2009.

Mind the SLA Gap! Data Center SLA MPLS SLA 140

Beware Lock-In 141

Source of Cloud Migration Delay and Blocking• 1. Rebuilding the application stack within the cloud• 2. Setting up the network• 3. Adding end-to-end security• 4. Managing the application in a separate environment 142

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Cloud Computing 101 Workshop Sample

by Alan Quayle

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Cloud Computing 101 Workshop Sample Presentation Transcript