Introduction to the Business of Cloud
By
Ilyas Iyoob
The recent paradigm shift in information technology and computing resource utilization is leading CIOs and IT managers toward the cloud as enterprises are starting to embrace the many benefits of such IT advancements. According to Gartner, technology standardization, hardware and software virtualization, service-oriented software architectures, and the dramatic growth of the Internet have enabled a wide range of customers and service providers to use IT services.
As “the latest super-hyped concept,” cloud computing is just a step in the commoditization of IT. Cloud computing allows organizations to own less and do more through virtualization and on-demand provisioning of platforms, software, applications, data and other services. Despite the increasing excitement surrounding this relatively new concept, issues such as types of cloud computing and scope of deployment still need understanding and clarification. For potential cloud users to determine whether cloud is the right solution, they must make decisions such as what type of service model would be feasible and what type of deployment model would be secure.
Gravitant’s cloudMatrix is the first cloud operating environment to automate sourcing, service delivery and operations management for virtual data centers to control technology, cost and governance risks. The product defines the terms by which cloud purchasers and providers should do business.
But first, it’s essential to define just what cloud computing means.
What is Cloud Computing?
Cloud computing involves consuming and delivering services via the Web. Consumers can access resources and services from multiple service providers to meet their dynamically changing demand without investing large amounts of time or money to maintain their IT infrastructure.
According to the National Institute of Standards and Technology, cloud computing has five key characteristics:
- On-Demand Self-Service: Consumers can provision computing capabilities as needed without requiring interaction with each service’s provider.
- Broad Network Access: For consumers, capabilities are available over the network and can be accessed through standard mechanisms that promote use.
- Resource Pooling: A provider’s computing resources, such as storage, processing and memory, are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned according to consumer demand.
- Rapid Elasticity: Consumer’s capabilites can be rapidly and elastically provisioned and purchased in any quantity at any time. As a result, IT Managers are less pressured to predict utilization, thereby reducing capital expenditure.
- Measured Service: Metering capability allows automatic control and optimization of resources through cloud computing. Resource usage is monitored, controlled and reported. As with a utility, customers are only charged for the resources they use.
Current Issues
Numerous challenges face the IT industry. High time to market, low utilization of current resources, high costs of IT services coupled with decreased budgets, and increasing environmental demands have pressured CIOs and IT Managers to improve the agility and efficiency of their IT productivity. Traditional IT approaches used for solving today’s challenges only add more complexity, expense and rigidity. Cloud technology, however, can provide the ability to standardize and enable IT resource management and governance to feasibly resolve these challenges.
- Time to Market: Time to market is the time it takes to launch new software or updgrade existing software. Because cloud computing eliminates the need for procurement, installation and other infrastructure overhead, IT resources can be up and running in very little time. Consequently, organizations can concentrate on their core business without worrying about investment in IT infrastructure and services.
- Utilization: Organizations face difficulty obtaining the optimal computing capacity. With traditional IT, it’s not possible for organizations to accurately estimate future computing needs. Thus, companies often find themselves under- or over-procuring IT resources. Through cloud computing, on-demand provisioning results in optimal utilization.
- Cost Efficiency: The cost to maintain today’s data centers is remarkably high as equipment, service and utility costs continue to escalate. Organizations have to invest in hardware and software applications as well as the installation and maintenance of systems. These requirements of servers and storage are fixed and often inflexible. With cloud computing, organizations pay only for what they use, thus eliminating the need for large, complex infrastructure and computing workforce that may not adequately fulfill the organization’s needs. In addition, the virtual nature of cloud services allows an enterprise to forgo depreciation on its computing infrastructure. By choosing the right cloud service solution, organizations can eliminate the barriers caused by strict financial requirements and better utilize their budget.
- Carbon Footprint: The environmental demands of information technology are growing significantly. Energy consumption and carbon emissions from data centers have increased due to the growing demand for computing hardware, software and services. A study by McKinsey & Co. estimates that the carbon footprint of data centers will exceed that of the airline industry by 2020. As a result, IT managers are striving to implement better, greener practices. A study commissioned by Microsoft suggests that by moving business applications to the cloud, organizations can reduce carbon emissions by 30% or more compared with current large data centers. Studies further suggest that the adoption of cloud technology could in fact be a large contributing factor to the greening of enterprise IT.
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| FIGURE 1. CLOUD SERVICE MODELS |
Is Cloud Right For You?
It can be. With the proper knowledge and the right services, moving to the cloud can provide many benefits. Understanding the different cloud configurations -- including service models, ownership and location of the hardware, and the degree of capacity reservation -- can help determine whether cloud is right for you.
Service Models:
Cloud computing is provided as a service across the Internet. There are three major cloud computing service models depending on the level of self-service capability desired. In general, as the level of self-service increases, consumers will have less control over the underlying infrastructure. NIST provides the following definitions for each service model:
- Infrastructure as a Service (Iaas): Provides consumers with the ability to deploy and run software by provisioning components such as processing, storage, networks and other fundamental computing resources. The consumer does not manage or control the underlying cloud infrastructure; service providers own the equipment and are thus responsible for maintenance. However, the consumer does have control over operating systems, storage and deployed applications. Examples include Amazon Web Services and Rackspace.
- Platform as a Service (Paas): Provides consumers with the ability to deploy onto the cloud infrastructure consumer-created or acquired applications created using tools supported and hosted by the provider. The consumer does not manage or control the underlying cloud infrastructure, such as the network, servers, operating systems or storage, but has control over the deployed applications. Examples include Google Apps Engine, Force.com and Microsoft Azure.
- Software as a Service (Saas): Provides consumers with the ability to use the provider’s applications running on a cloud infrastructure. The applications are accessible from various client devices, allowing consumers to use the service from anywhere. The consumer does not manage or control the underlying cloud infrastructure including network, servers, operating systems, storage or even individual application abilities. An example is web-based email.
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| FIGURE 2. HYBRID CLOUD MODEL |
Deployment:
Other Private, public and hybrid clouds are the options. The choice of models depends on the budget available for initial investment as well as the level of security required.
- Private Cloud: In this model, the cloud infrastructure is self-owned; that is, operated solely by an organization. It can be managed by the organization itself or a third-party provider, and it can exist on or off the organization’s premises.
- Public Cloud: Here the cloud infrastructure is made available to the general public or a large industry group. The infrastructure is vendor-owned.
- Hybrid Cloud: As a combination of both private and public clouds, hybrid clouds are organized in such a way that a portion of the infrastructure is deployed in a private cloud and the rest is exposed on the public cloud.
In the case of private cloud, there are challenges of managing large initial investments, significant changes in internal IT operations and support, and time to achieve technology capability. Due to the technical, cost, and security constraints, enterprises are more likely to adopt a hybrid (public and private) cloud solution. In this case, there is an increased need for a central cloud management solution to address challenges in both areas.
Capacity Planning:
Capacity planning is a vital component of cloud computing adoption that involves understanding necessary resource requirements in order to meet the anticipated needs of customers and users.
Gartner’s observations pointed out that “as capacity is planned, the budget is also planned.” The pay-as-you-go utility model enhanced by cloud computing provides a false illusion that there is an infinite supply of resources on demand. Organizations, however, do not have infinite budgets. Thus, cloud computing organizations need to carefully plan and monitor how much resources are needed to support their infrastructure.
Companies that are able to predict their computing needs can reserve capacity and plan for their predicted usage based on their IT budgets. Other models allow organizations to utilize an on-demand, pay-per-use model, which may be more economical. Regardless, capacity planning should be a high priority for CIOs and IT managers to meet IT resource and financial goals in the most cost-effective way.
To help organizations assess the potential value that can be generated by a transfer to the cloud, Gravitant has developed Cloud Planning Tools that can predict the impact of replacing physical servers with a private or public cloud solution.
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| FIGURE 3. CHALLENGES FACING CLOUD ADOPTION |
Challenges Facing the Cloud
Despite their many advantages, enterprise cloud services create many challenges. Privacy and security, as well as uncertain legal implications, inhibit cloud adoption, especially regarding the public and hybrid models. The commingling of data and applications from other organizations within a public cloud is creating hesitation among enterprises to adopt this model, as the privacy of sensitive data is imperative and must be safe-guarded. The hybrid cloud model poses similar challenges. And with more distributed capability, the management of the private and public environments proves to be a major hurdle for IT enterprises.
Enterprises that are currently operating in the cloud face challenges as well. For instance, network availability is critical to provision, manage and provide cloud services. Without a strong Internet backbone, the technology is essentially meaningless.
Potential users face other challenges, including vendor lock-in (being tied to a particular cloud service provider); strategic sourcing; service resilience; workload selection; availability; and provider SLA compliance.
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| FIGURE 4. GRAVITANT’S CLOUDMATRIXTM SOLUTION |
Gravitant’s cloudMatrix Solution
As a comprehensive response to the challenges facing traditional IT and enterprises’ adoption of the cloud, Gravitant has created the cloudMatrix as the industry’s first Cloud Operating Environment (COE). With its unmatched broker and management technology, the cloudMatrix delivers the following capabilities:
- Management of cloud services including capacity planning, sourcing, cost optimization and chargeback
- Dynamic workload provisioning, scaling and governance of virtual data centers (VDCs) for hybrid clouds
- Automated deployment and porting management of application architectures across hybrid clouds
- Automated governance and compliance of VDC resources, SaaS subscriptions, costs, SLAs, KPIs and provider contracts.
The cloudMatrix delivered in a Software as a Service (Saas) model enables IT organizations to save approximately 30-40% in data center, application assets and operations costs. These integrated capabilities also reduce the risk of adopting public cloud services and accelerate centralization for agility and control.
Gravitant’s mission is simple: Help Enterprise IT effectively meet business needs while optimizing IT supply chains for agility, responsiveness, service levels and cost.
This new IT capability requires a synergetic system of partners, service providers and service integrators. Gravitant is working with several enterprise-class service providers to integrate their cloud services into Gravitant’s cloud operating environment. In addition, Gravitant has partnered with system integrators and traditional software providers to develop a complete cloud solution with infrastructure, software, and managed services.
The cloudMatrix provides a unified management framework that enables IT organizations, service providers, and systems integrators to plan, source, implement and govern the best-fit, customized cloud solution that reduces the cost, time, complexity and risk of setting up a cloud supply chain and managing multi-vendor relationships. The features and benefits provided by cloudMatrix are listed in the table below.
Case Study
Large State Agency
A large state agency had built an Oracle-based Web application and quickly needed development/testing, production and backup environments. Their key challenges were:
- The cost of the current data center solution was high
- There was limited disaster recovery options available
- Deployment and operations support was limited, and quality of service was very low
- The current data center platform did not support the application architecture
The agency was able to successfully acquire and instantiate Virtual Data Centers (VDCs) and the required environments within it. Agency staff used the cloudMatrix platform to accomplish the following functions:
- Size, Price and Order VDC services from an online IaaS catalog and templates
- Design and model application deployment architecture and use models for systems construction and deployment
- Instantiate VDC and provision required resources (server, storage and network) for the environments through a single pane of glass across different providers
Use automated workflow between IT and finance managers to control and approve VDC resources and cost
- Monitor application and infrastructure utilization and performance
- Monitor and govern cloud service providers for QoS
State Agency Benefits were:
- VDC environments were up and running within a week
- Agency application was securely deployed and tested in the cloud
- Three vendor services were aggregated to enable the solution
- State saved 45% compared with the internal data center solution
- Service Delivery and Operations Management automation helped save another 40% in data center costs
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| FIGURE 5. CLOUDMATRIX FUNCTIONS & BENEFITS |
Conclusion
Cloud technology is changing the IT world and is becoming an essential tool for businesses. Developments in virtualization, standardization of technology, and improved access to the Internet have accelerated interest in cloud computing and positioned it as a viable option to transform traditional complex and rigid operations to agile and scalable ones. While cloud computing offers many advantages, each organization must determine whether it is the right solution by considering the types of cloud computing, scope of deployment, location and capacity planning.
IT enterprises are struggling to understand and use these cloud services across a multitude of providers that each offer different kinds of services as well as different ways to use, operate and price those services. Gravitant’s cloudMatrix cuts through the complexity to enable IT to establish business demand, plan capacity, source IT services, provision on-demand, and manage and optimize IT services while fulfilling the growing need for a “broker” to manage and facilitate the connection between the customer and the service provider. This is the new IT.
About Ilyas Iyoob
Sr. Research Scientist, and Director of Advanced Analytics at Gravitant
Dr. Iyoob has primarily focused on the application of Advanced Analytics to IT as a Service. With the advancement of Cloud Computing technology, he is in the forefront of developing Cloud Analytics, which includes the framework and algorithms for Virtual Data Center Capacity Planning, IT Supply Chain Optimization, and Automatic Scaling and Provisioning of Virtual Machines. He has worked closely with IT professionals at different levels of the organization in an effort to provide strategic and tactical decision support to the office of the CIO.
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