This document discusses the potentials of cloud computing. It explains that cloud computing applies best practices from enterprise computing over the last decades. Cloud services provided by IT vendors are particularly attractive for small- and medium-sized enterprises due to lower costs compared to maintaining their own IT infrastructure. Building a company's own cloud platform is possible using available open source technologies. The document provides examples of how companies like Amazon and Google commercialized their infrastructure capabilities to offer cloud computing services.

1. Cloud Computing Potentials
Discussion Document
Raphael Volz, Abraham Taherivand
June 2009
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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
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3. Agenda
 Genesis of Cloud Computing
 IT-demand perspective (of a SME)
 IT-supply perspective
 ... cost view
 ... engineering view
 Summary
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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)
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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
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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
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8. Agenda
 Genesis of Cloud Computing
 IT-demand perspective (of a SME)
 IT-supply perspective
 ... cost view
 ... engineering view
 Summary
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9. Discuss with us !
Full version available at:
http://www.raphaelvolz.de/shop/106.html
Contact:
the-cloud@volzinnovation.com
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