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- 1. The New Economics of Cloud Computing… Chesapeake Technology Council Scott Sadler Cloud Business Development Executive IBM Channels & Mid-Market, East IMT [email_address]
- 2. A Crisis of Complexity… The Need for Progress is Clear… 85% idle In distributed computing environments, up to 85% of computing capacity sits idle. Explosion of information driving 54% growth in storage shipments every year. 1.5x Soon 1 trillion connected devices 70¢ per $1 70% on average is spent on maintaining current IT infrastructures versus adding new capabilities .
- 3. Nothing Is Changing More than IT … The way it ’s applied… For insight The way it ’s accessed… Ubiquitously The way it ’s architected… Integrated and flexible
- 4. By 2011, the world will be 10 times more instrumented then it was in 2006. Internet connected devices will leap from 500M to 1 Trillion by 2013… 10/28/11 Cloud Computing Strategic View 2005 2006 2007 2008 2009 2010 2011 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Exabytes RFID, Digital TV, MP3 players, Digital cameras, Camera phones, VoIP, Medical imaging, Laptops, smart meters, multi-player games, Satellite images, GPS, ATMs, Scanners, Sensors, Digital radio, DLP theaters, Telematics , Peer - to - peer, Email, Instant messaging, Videoconferencing, CAD/CAM, Toys, Industrial machines, Security systems, Appliances 10x growth in five years Approximately 70% of the digital universe is created by individuals, but enterprises are responsible for 85% of the security, privacy, reliability, and compliance.
- 11. There are three ways to acquire IT capabilities… 10/28/11 Cloud Computing Strategic View Cloud computing is a new delivery and consumption model or methodology spanning all 3 ways. Software, hardware and services Pre-integrated systems and appliances Provided as services
- 12. Major factors influencing cloud computing economics Cloud Computing Strategic View 10/28/11 Infrastructure leverage Virtualization of hardware Virtualization drives lower capital requirements Utilization of infrastructure Virtualized environments only get benefits of scale if they are highly utilized Labor leverage Standardization of workloads Lower complexity = more automation possible = reduced IT labor costs Automation of management Automation takes repeatable tasks and automates services, reducing IT operation costs Self-service Clients that can “ serve themselves ” require less support and have easier access to services
- 13. Many IT- aaS models are being discussed, including four main Cloud categories… 10/28/11 Cloud Computing Strategic View Market Examples IBM Examples Software-as-a-Service Collaboration Financials CRM/ERP/HR Industry Applications Infrastructure-as-a-Service Servers Networking Storage Data Center Fabric Shared virtualized, dynamic provisioning Platform-as-a-Service Middleware Database Web 2.0 Application Runtime Java Runtime Development Tooling Business Process-as-a-Service Employee Benefits Mgmt. Industry-specific Processes Procurement Business Travel
- 14. A Spectrum of deployment options for cloud computing Cloud Computing Strategic View 10/28/11 Private Public Hybrid IT capabilities are provided “ as a service, ” over an intranet, within the enterprise and behind the firewall Internal and external service delivery methods are integrated IT activities / functions are provided “ as a service, ” over the Internet Third-party operated Third-party hosted and operated Enterprise data center Enterprise data center Private cloud Hosted private cloud Managed private cloud Enterprise Shared cloud services A Enterprise B Public cloud services A Users B
- 15. Cloud Computing Strategic View 10/28/11 Cloud will be adopted based on workloads… Ready for Cloud… May not yet be ready for migration… Sensitive Data Complex processes & transactions Regulation sensitive Not yet virtualized 3 rd party SW Highly customized Analytics Collaboration Development & Test Workplace, Desktop & Devices Infrastructure Storage Infrastructure Compute Business Processes Industry Applications Pre- production systems Information intensive Isolated workloads Mature workloads Batch processing New workloads made possible by clouds… Medical Imaging Financial Risk Collaborative Care Energy Management Disaster Recovery
- 22. Steps to success … 10/28/11 Cloud Computing Strategic View Create IT Roadmap Capital Private Cloud Hybrid Cloud Time Trad IT Rent Financial Workload Custom Standard Capital Private Cloud Hybrid Cloud Time Trad IT Rent Financial Custom Standard Capital Private Cloud Hybrid Cloud Time Trad IT Rent Financial Custom Standard E - Mail, Collaboration Software Development Test and Pre - Production Data Intensive Processing Database ERP E - Mail, Collaboration Software Development Test and Pre - Production Data Intensive Processing Database ERP E - Mail, Collaboration Software Development Test and Pre - Production Data Intensive Processing Database ERP Assess Workload Enterprise Private Public Hybrid Trad IT Enterprise Private Public Hybrid Trad IT Enterprise Private Public Hybrid Trad IT Determine the Cloud Delivery Model Define Business Value Establish Architecture Service Definition Tools Service Publishing Tools Service Fulfillment & Config Tools Service Reporting & Analytics Service Planning Role Based Access OSS BSS Infrastructure Platform Software End Users, Operators Service Catalog Operational Console Cloud Services Cloud Platform Service Definition Tools Service Publishing Tools Service Fulfillment & Config Tools Service Reporting & Analytics Service Planning Role Based Access OSS OSS BSS BSS Infrastructure Infrastructure Platform Platform Software Software End Users, Operators Service Catalog Operational Console Cloud Services Cloud Platform Implement Cloud Systems Storage Network Computing Infrastructure Platform & Applications Email Bus Apps BPM Sys Mgmt Info Mgmt Web Svr Systems Storage Network Computing Infrastructure Platform & Applications Email Bus Apps BPM Sys Mgmt Info Mgmt Web Svr Systems Storage Network Computing Infrastructure Platform & Applications Email Bus Apps BPM Sys Mgmt Info Mgmt Web Svr Email Bus Apps BPM Sys Mgmt Info Mgmt Web Svr
- 23. 10/28/11 Cloud Computing Strategic View Thank you!
Editor's Notes
- The facts here are startling – inefficiency is prolific – clearly, progress is needed: - In distributed computing environments, up to 85% of computing capacity sits idle. Consumer product and retail industries lose about $40 billion annually, or 3.5 percent of their sales, due to supply chain inefficiencies. 70% on average is spent on maintaining current IT infrastructures versus adding new capabilities. Explosion of information: 54% growth in storage shipments every year 33% of consumers notified of a security breach will terminate their relationship with the company they perceive as responsible. Transition Line: And yet for some of our clients – they are already seeing benefits derived from their own transformation- .
- ACCESS The way IT is accessed —moving from attached workstations to ubiquitous, mobile devices with totally new devices like smart meters creating massive volumes of information every day – from 700 million Smart phones in 2004 to 5 billion in 2010, f rom 1.3 Billion RFID tags in 2005 to 30 Billion RFID tags deployed across the world in 2010 . The fundamental reality is that toady people are demanding more access and as the technology to access IT drops dramatically in cost more can…in totally new ways. Consider a recent survey where 90% of car buyers indicated that they would prefer in-car Wi-Fi access over a DVD system. As a result, we are seeing IT respond to meet this demand. This response is generating a massive explosion of information as more people and devices access IT. APPLICATION The volume of information being generated by the shift in access is enabling and quite frankly, requiring new ways to apply IT —moving from a focus on core business applications to improve process productivity to generating real-time insight about and for individual users of IT . Consider the NYC Crime Command center. It's often a mundane detail that ultimately solves a crime. A nickname. A parking ticket. A past address. And it is mundane details—billions of them—which populate the data warehouse of the New York City Real Time Crime Center (RTCC). New York is now the safest large city in the United States, one example of how cities are getting smarter about public safety. IBM worked with the New York Police Department (NYPD) to create a data warehouse that could bring together information buried in filing cabinets, on index cards and in handwritten notes. Today, the RTCC stitches together more than 120 million New York City criminal complaints, 31 million national crime records and 33 billion public records...just to name a few. Sophisticated analytics and search capabilities make connections across multiple databases. Information can be visualized in seconds on a two-story video wall: a photo of a suspect appears with details—tattoos, past offenses, addresses with maps—quickly filling in. Critical data can be relayed instantly to officers at the scene. What once took days now takes minutes. Systems ARCHITECTURE During the 1960s the primary focus of IT was the automation of the back office. With the emergence of the global enterprise, in the 1970 ’s and 1980’s IT became increasingly focused on Core business applications to enhance white collar productivity. Today, with the dramatic increase in the pace & competitiveness of business - IT is being asked to shift its focus once again - deliver new insights – in real-time that are relevant to individual users of IT. With the explosion of data - 15 petabytes of new information being generated daily, 80% of it unstructured, with 44x more in next decade couple with and the inability to leverage this data the architecture of systems must change. The IT architecture of tomorrow must be increasingly integrated and flexible and built on a foundation of workload optimized systems. Systems that can help IT turn that data into new insight through analytics. There is no better example of this shift than IBM's own Watson….
- The proliferation of sensors, digital communications and other forms of digital data collection, along with advances in the storage and management of such data has led to a projected tenfold growth in digital data between 2007 and 2011. All of this data has the potential to provide enterprise with valuable insights for running their businesses more effectively and efficiently. Now, businesses analysts need to adapt from an environment in which the challenge was in gaining insights from limited data to one in which the challenge is in managing and extracting useful information from massive data sets. As one can imagine, finding the relevant data, and quickly, amid the 'mountain' of available data can be like finding a needle in a haystack. Moreover, of the growth in digital data, approximately 80% of it is expected to comprise semi-structured and unstructured data (i.e., email, blogs, medical images, videos, audio files, pictures). With unstructured data, considerable effort is required to 'understand' the data, even before any further analysis can be performed to intelligently influence decision making. Semantics The number of semantically tagged documents and data sets is growing, as a result of five developments: “ Linked Data” guidelines, published in 2006, make it easier to share data on the web. The graph in the upper left represents the output of the Linking Open Data community project, which has the goal of making large numbers of open data sets more available by complying with the Linked Data guidelines. RDF (Resource Description Framework) triples are a key component of the Linked Data guidelines. Technologies to convert many legacy sources, especially of relational data, into RDF triples, became available as open source in 2006 (and IBM Research has improved versions of these) Technologies are appearing that can automatically find associations between subjects and objects from one “data graph” with subjects and objects in other “data graphs” Several important reference information suppliers, most notably Thomson Reuters, entered into this space (through their OpenCalais effort). Several efforts have developed technology to mine the essential information about people, places, materials, governments, businesses, works of literature and so on from Wikipedia, into a semantically tagged form (notably DBPedia and Freebase), so that as Wikipedia extends to cover more of the worlds knowledge, more of that becomes part of the Web of semantic data. Net: Both the number of facts, and the rich interconnecting of different classes of facts, have been growing at an accelerating rate. Example Use: In BlueJ! grand challenge, linked data (DBpedia, IMDb, Freebase etc) is used as important structured information source to improve the accuracy of question answering in additional to unstructured information. Acronyms: RDF – Resource Description Framework (W3C Standard) FOAF – Friend of a Friend – the RDF application for describing people and other people they know DBLP – Digital Bibliography and Library Project – bibliographic information on more than 1 million computer science research publications SIOC – Semantically Interlinked Online Communities DOAP – Description of a Project; DOAPSpace – a repository of open source projects RIESE - R DFizing and I nterlinking the E uro S tat Data Set E ffort OpenGuides – Information about leading cities of the world, the kind of information that would appear in a guidebook, produced by the community through a public Wiki. Jamendo – an online music community, including a large quantity of music licensed under various Creative Commons license terms. www.garlik.com – an online identity monitoring service Sindice.com – web service providing a directory/index of all Linked Open Data and Microformat data on the Web
- The convergence of these dramatic societal shifts and technology innovations signal that we are entering a new era of computing— Smarter Computing—the era of Insight for Discovery. This new era is made possible by the integration of Big Data, analyzed through Optimized Systems that are managed as a Cloud. The combination of these capabilities can enable any enterprise to drive innovation while doubling IT capacity for the delivery of service on a flat IT budget. IT has the opportunity to play an even greater role in driving business transformation by enabling: Completely new business models New ways to deliver technology-based services New ways to understand the world New capabilities in Big Data and information integration can enable enterprises to leverage the dramatic increase in new forms of information to react faster and address the dramatic changes we are witnessing in the world. Optimized Systems can be designed to meet the need of specific requirements of these new workloads and improve outcomes. And emerging Cloud models will enable enterprises to manage IT in new ways and deliver new service in new ways. The end product is new innovation lead by IT while dramatically improving the Economics of IT.
- As The Economist reported recently, clouds will transform the IT industry. It will impact how we live and how businesses operate profoundly Cloud computing provides: Massively scalable computing resources from anywhere Simplifies service delivery Rapid innovation Dynamic platform for next generation data centers Some say its grids or utility computing or software as a service but its all of those combined Grid Computing: Solving large problems with parallel computing Utility Computing: Offering computing resources as a metered service Software as a Service: Network-based subscriptions to applications Cloud Computing: Anytime, anywhere access to IT resources delivered dynamically as a service
- So what is really different about cloud computing? A tradition enterprise tends to pull together resources and deploy them in support of a business function workload on project at a time, or in silos. The resources are dedicated to the workload and are unable to support other workloads where they could be leveraged as added support. Cloud computing on the other hand leverages a pooled resources environment that uses virtualization in order for the physical assets to support multiple workloads. In order to drive efficiency of the delivery to enable the self-service, self-management of cloud computing requires standardization of the assets (hw, sw, delivery) as well as automation. This is what delivers a responsive end user experience. So from the end users point of view it is elastic in scalability, accessible from any device, anywhere, any time, and if charged pay only for what they use during the time they are using it. From a provider ’s perspective its about an environment of highly virtualized resources that are location independent and have automated service management to handle provisioning, de-provisioning, change management, security and overall environment controls.
- Cloud computing is a shift in economics and focus. From an economic standpoint cloud addresses: Self-service Cost reduction Scale Utilization IT agility, flexibility and delivery of value. Cloud focuses on choice: Workload optimization Service delivery The end-user experience
- So how is IBM helping? Well let ’s start by reviewing the foundation. At the end of the day there really are only 3 ways in which an organization can get the IT support it needs to properly support their organization. First, they can build it out on their own or with someone’s assistance. Second, for key workloads, or functions they can acquire pre-integrated systems or appliances that accomplish the task, and then run and manage it themselves. And third they can acquire the IT, or IT support as a form of service from a third party. Acquiring IT as a form of service could be as simple as monitoring servers to as complex as outsourcing, with hosting and managed services in between. No matter which IT acquisition model they choose, cloud computing is a new delivery and consumption model that spans all three. A company can build out their own private cloud environment, they can purchase a pre-integrated system designed specifically deliver a cloud delivered workload, or they can acquire a cloud delivered workload as a service from a third party. Cloud computing evolved from internet consumer services and is about creating a delivery and consumption model of IT-enabled services that is all about the end user experience, end user control, and end user self-management.
- Why is practically everyone so excited about cloud computing? These characteristics are the basis of how to deliver on cloud computing and also drive the economic benefits of this new model. How do we cope with this increasing demand and the increasing complexity from an IT perspective? Virtualization is the key. Virtualization technology when applied properly offers maximum utilization of infrastructure, which drives lower capital requirements, reducing cost overall by maximizing infrastructure and providing the ability to scale quickly and easily, especially if the environment is highly utilized. From a labor leverage standpoint, offering self-service to clients requires less support and gives them instant access to services. Behind self-services is the automation of the “ services” provided, such as automated setup and configuration. And at the core of better service delivery is the fact that you have standardized the services provided, for example standardizing test environments. All this adds up to reducing operational labor cost and gaining more efficient use of these IT resources for high-value services. The new cloud computing economics from a bottom line perspective reduce overall cost of IT at the same time as improving service.
- When it comes to delivering a cloud deployment there is a spectrum of deployment options available for you to choose from. The most common and written about is the public cloud option like Amazon Elastic Compute Cloud (EC2), or Google Apps. These cloud deployments allow any user with a credit card to gain access to the resources. To a private cloud deployment where all the resources are owned, managed and controlled by the enterprise. To gradations in between from third party managed, to third party hosted, to a very common emerging model called “shared cloud services” or “member cloud services.” Here you must be a member to access the services, and they can be made available to you typically in a shared resources option or a dedicated resources option, depending on your needs and configurations. It is this last model where IBM has offerings call IBM Smart Business Services on the IBM Cloud. Finally you can merge the options between public and private and create what has been coined a “hybrid cloud”. When it comes to deciding which cloud delivery option you want to choose it needs to tailored to the business, the time and money requirements, and the availability of the resources. There is a spectrum of delivery options, and there is no single right way. Private Implemented on client premises Client runs/ manages Managed private cloud Third-party operated Enterprise owned Mission critical Packaged applications High compliancy Hosted private cloud Internal network Third-party owned and operated Standardization Centralization Security Internal network Mix of shared and dedicated resources Shared Cloud Services Shared facility and staff Virtual private network (VPN) access Subscription or membership based Shared resources Public Cloud Elastic scaling Pay as you go Public Internet A Hybrid cloud solution is some mix of private and public integrated with your traditional IT to deliver the cloud solution to the end user and can involve any of the public to private options.
- Because cloud computing is about delivering an IT-enabled service with the control in the hands of the end user, the characteristics of the business function workloads that can be self enabled will determine whether or not they are appropriate for cloud computing. Can they be easily standardized for delivery? Is the use of this service frequent enough and involve enough end users to make it a viable cloud computing solution? Are there risks associated with the workload that could preclude it from being cloud delivered? Are there new workloads not even yet explored that could potentially benefit from a cloud computing deployment? All of these are key questions to ask when reviewing which workloads are appropriate for a cloud delivery model.
- Every business and organization today has a current plan of record for how they want IT to support their business. For many, it is about consolidating assets, virtualizing to increase asset utilizations and reduce costs, as well as standardizing and automating to improve service delivery and lower operational labor costs. These are key to achieving an optimal and effective cloud computing experience for the end user, and maximizing value to the business.
- So how do you get started with cloud computing? At IBM we believe that to best leverage cloud computing as a viable delivery model, is to layout a clear path that is grounded in integrating cloud with your overall IT delivery strategy. You can build and deliver cloud services, or you can acquire and deliver cloud services, but both should appropriately start with your planning stage where you align the cloud-based services with your overall strategic direction, you ’ve analyzed which workloads are appropriate for cloud delivery, and have at least a preliminary business case to support an implementation. The best way to start a cloud adoption is with a pilot, and IBM can help you identify which pilot and where.