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Cloud Computing Potentials

 Discussion Document

 Raphael Volz, Abraham Taherivand

 June 2009



                                                         1
                                    www.volzinnovation.com
Executive summary
    Cloud computing applies best practices of enterprise
     computing of last decades
    Cloud services (IT-Services operated by IT-vendor)
     particularly attractive for SMEs
    Cloud infrastructure only cheaper, if inhouse infrastructure
     utilization is low
    Becoming a cloud infrastructure provider requires high
     resource utiliziation and tight control of KPIs
    Applying cloud computing architecture principles makes
     inhouse IT-infrastructure more controllable
    Building own cloud platform possible through available
     Open Source platforms
    Open Source platforms successfully used in many
     application
                                                                    2
Agenda

   Genesis of Cloud Computing
   IT-demand perspective (of a SME)
   IT-supply perspective
     ... cost view
     ... engineering view


    Summary




                                       3
Virtualization is experiencing a renaissance
and is the basis of cloud computing
Evolution of enterprise computing
          1960                     1980                            2000                              2008

                                                                                                     Cloud
       Mainframe               Client/Server                  Virtualization
                                                                                                   Computing




    Mainframe is the         Large number of             One server hosts                 „Cloud“ as one
     platform for all          servers for                  multiple virtual                  abstract resource
     applications              specific                     machines                          combining all server
    Client access via         applications                Virtual machines                  capacity
     terminal                 Distributed                  share server                     Dynamic utilization
    Increasing capacity       access via                   resources                         of "cloud“
     eventually means to       network                     More efficient use of             resources (on
     buy new, larger           protocols                    server resources                  demand)
     mainframe                Usually: low                                                  Cloud is the
    IBM invents               utilization per                                                platform for all
     virtualization to         server                                                         applications
     optimize mainframe
     performance
                                Source of pictures: Wikimedia Commons, Mainframe IBM 704 by LLNL                     4
Amazon and Google commercialize their
infrastructure
Genesis of cloud computing – Amazon und Google
   Consumer internet providers require
    high availability
                                                      Amazon offer:
       Downtime = lost sales                                Storage
                                                              (S3/CloudFront/Simple DB)
              Google: ~40k US$ per minute
                                                             Virtual Server
              Amazon: ~35k US$ per minute                    (EC2, Elastic MapReduce)

              Yahoo: ~10k US$ per minute                    Messaging System
                                                              (SQS)
       Big providers requirements unmet by           Google offer:
        market offer
                                                             Own application platform
       Big providers invest massively into                   (Java/Python)
        own platforms and infrastructure              Price model:
              Standardized                             I.    CPU hours
                                                              (Amazon by power,
              Solid parallelized                             Google by use)

              Fail-over and load-balanced              II.   Data transfer
Notes: revenue / minute from annual reports 2008        III. Storage space
Assumption: total systems failure worldwide
                                                        IV. No. of requests (Amazon)
                                                                                          5
IT vendors not only build but also „run“
their solution
Examples for cloud services



    <SalesForce>
          CRM
  ERP for SME
                        Budgeting
                                            Usual price model:

                                    No. of users + resource consumption
     Collaboration
                              CRM



            Invoicing



                                                                          6
IT vendors not only build but also „run“
their solution
Examples cloud services                        Motivation IT vendors



    <SalesForce>
          CRM                                                                     Economies of scale
                                                   Run                             through standardized
  ERP for SME
                                                                                   multi-tier operation
                        Budgeting
                                                                                  Increased margins by
                                                                                   eliminating middle-
                                                  Build                            men in distribution
                                                                                   channel
     Collaboration
                                                                                  Simplification of
                             CRM                                                   engineering by control
                                                                                   of platform
                                                  Plan

            Invoicing


                                    Note: Shift of value generation:   today       future

                                                                                                      7
Agenda

   Genesis of Cloud Computing
   IT-demand perspective (of a SME)
   IT-supply perspective
     ... cost view
     ... engineering view


    Summary




                                       8
Discuss with us !



        Full version available at:
http://www.raphaelvolz.de/shop/106.html

               Contact:
     the-cloud@volzinnovation.com




                                          27

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Cloud Computing Potentials

  • 1. Cloud Computing Potentials Discussion Document Raphael Volz, Abraham Taherivand June 2009 1 www.volzinnovation.com
  • 2. Executive summary  Cloud computing applies best practices of enterprise computing of last decades  Cloud services (IT-Services operated by IT-vendor) particularly attractive for SMEs  Cloud infrastructure only cheaper, if inhouse infrastructure utilization is low  Becoming a cloud infrastructure provider requires high resource utiliziation and tight control of KPIs  Applying cloud computing architecture principles makes inhouse IT-infrastructure more controllable  Building own cloud platform possible through available Open Source platforms  Open Source platforms successfully used in many application 2
  • 3. Agenda  Genesis of Cloud Computing  IT-demand perspective (of a SME)  IT-supply perspective  ... cost view  ... engineering view  Summary 3
  • 4. Virtualization is experiencing a renaissance and is the basis of cloud computing Evolution of enterprise computing 1960 1980 2000 2008 Cloud Mainframe Client/Server Virtualization Computing  Mainframe is the  Large number of  One server hosts  „Cloud“ as one platform for all servers for multiple virtual abstract resource applications specific machines combining all server  Client access via applications  Virtual machines capacity terminal  Distributed share server  Dynamic utilization  Increasing capacity access via resources of "cloud“ eventually means to network  More efficient use of resources (on buy new, larger protocols server resources demand) mainframe  Usually: low  Cloud is the  IBM invents utilization per platform for all virtualization to server applications optimize mainframe performance Source of pictures: Wikimedia Commons, Mainframe IBM 704 by LLNL 4
  • 5. Amazon and Google commercialize their infrastructure Genesis of cloud computing – Amazon und Google  Consumer internet providers require high availability  Amazon offer:  Downtime = lost sales  Storage (S3/CloudFront/Simple DB)  Google: ~40k US$ per minute  Virtual Server  Amazon: ~35k US$ per minute (EC2, Elastic MapReduce)  Yahoo: ~10k US$ per minute  Messaging System (SQS)  Big providers requirements unmet by  Google offer: market offer  Own application platform  Big providers invest massively into (Java/Python) own platforms and infrastructure  Price model:  Standardized I. CPU hours (Amazon by power,  Solid parallelized Google by use)  Fail-over and load-balanced II. Data transfer Notes: revenue / minute from annual reports 2008 III. Storage space Assumption: total systems failure worldwide IV. No. of requests (Amazon) 5
  • 6. IT vendors not only build but also „run“ their solution Examples for cloud services <SalesForce> CRM ERP for SME Budgeting Usual price model: No. of users + resource consumption Collaboration CRM Invoicing 6
  • 7. IT vendors not only build but also „run“ their solution Examples cloud services Motivation IT vendors <SalesForce> CRM  Economies of scale Run through standardized ERP for SME multi-tier operation Budgeting  Increased margins by eliminating middle- Build men in distribution channel Collaboration  Simplification of CRM engineering by control of platform Plan Invoicing Note: Shift of value generation: today future 7
  • 8. Agenda  Genesis of Cloud Computing  IT-demand perspective (of a SME)  IT-supply perspective  ... cost view  ... engineering view  Summary 8
  • 9. Discuss with us ! Full version available at: http://www.raphaelvolz.de/shop/106.html Contact: the-cloud@volzinnovation.com 27