Tag: hybrid cloud

Economic Forecast Calls for More Clouds | Gaining Altitude in the Cloud

Have you ever stopped to think why cloud computing is at the center of any IT-related discussion? In our conversations with clients, from the boardroom to the line manager, cloud is sure to enter into the discussion. Today, many of those conversations are around understanding, and to a lesser degree, implementation. But once the discussion crosses the threshold of understanding, the topic immediately goes to, “How can I get into the cloud?”

Everest Group recently held a webinar on the economics of cloud computing. There were two objectives: 1) Help clarify just how disruptive, in a good way, cloud computing is and can be; and 2) Demonstrate the economic benefits that exist in the cloud economy, and that there are those striving for this competitive advantage today.

The Hole in the Water That You Throw Money Into

One of the key economic drivers that hampers today’s data center environment is the relatively low utilization rate across its resources. Think about it like this: You’ve probably heard the old adage that owning a boat is like having a hole in the water that you throw money into. That is because the majority of boats are seldom used. (Trust me, I know, I used to own one.) The per use cost of a $25,000 (and quickly depreciating) boat that you actually use three or four times a year is quite high, and the reality is you could have rented a boat often for a fraction of the cost. The same thing is happening in your data center. If your utilization is 20 percent, or even 30 percent, you have essentially wasted 70-80 percent of your spend. That is an expensive data center.

Workload Utilizations1

Cloud computing is like that little boat rental shop tucked away in a nice cove on your favorite lake. What if you could get rid of excess capacity, better manage resource peaks and valleys, and rent public capacity when you need it, and not pay for it when you don’t?

What if we leverage public cloud flexibility1

The Economics

As you can see in the graphic below, the economics related to cloud are dramatic, and the key lies in leveraging the public cloud to pay only for what you use, eliminating the issue of excess capacity.

Public cloud options unlock extraordinary enterprise economics

There is a variety of point examples in which this is done today, with the above economics reaped. For instance, Ticket Master leverages the public cloud for large events, loading an environment to the cloud, specifically sized for each given event. The specific event may only last several hours or days, and once complete, Ticket Master takes down the environment and loads the data in its dedicated systems.

There are also enterprises and suppliers working to enable peak bursting more seamlessly. For example, eBay recently showed where they are working with Rackspace and Microsoft Azure to enable hybrid cloud bursting, allowing eBay to reduce its steady state environment (think hole in the water) from 1,900 to 800 servers, saving it $1.1 million per month.

Hybrid economics example eBay

 The Steps to Getting Started

Dedicate yourself to getting rid of your boat (or should I say boat anchor?) Begin a portfolio assessment. Understand what you have, and what is driving utilization. Consolidate applications, offload non-critical usage to the valleys, and look for ways to leverage the public/private cloud. When I unloaded my boat, I freed up capital for the more important things in life, without sacrificing my enjoyment. Doing so in your data center will allow you to take on strategic initiatives that will make you even more competitive.

Cloud’s Impact on the CIO | Gaining Altitude in the Cloud

Disclosure: I’ve never been a CIO. However, I’ve worked with and advised them on many engagements, so I have an understanding of how they think and the challenges they face in today’s business environment.

Much has already been written about the technology revolution emerging from cloud-delivered services, I wanted to turn the tables slightly and ponder how these technologies influence the role and skills of IT management and the office of the CIO.

Macro Trends CIOs Face

1: Strategy Replacing Operations
CIOs are facing tremendous pressure to think strategically about how IT can better align itself with business needs. An operations-focused “we’re just here keeping the lights on” approach to IT management is, at best, the minimum expectations of the job. As organizations demand more technological enablement in all parts of the business model, CIOs must fully integrate into strategy setting and change enablement within their company.

2: Era of Big Data
A study conducted by the University of California, San Diego, estimated that the volume of enterprise data produced per year (2008) topped out at 9.57 zettabytes (1 zettabyte =1 million petabytes), which translates to an average of 63.4 terabytes per company per year or 12 gigabytes per worker per day.

Although it’s a gross oversimplification, CIOs are continually asked to do more with less. They need to support their company’s desire to take advantage of big data to make better business decisions and more data-rich transactions, yet simultaneously are burdened with the liabilities of processing capacity limitations, storing and retrieving requirements, and data protection, all while capital budgets are under tighter scrutiny.

3: Speed and Agility
Almost every new technology comes attached with a promise of saving time. But to the adopter, the outcome isn’t more free time; rather, it’s a shortened expectation of the time it takes to complete a workload. In the enterprise, this is manifested in the demand of increasingly greater organizational agility and nimbleness. And as a CIO’s performance is measured by the rate at which he or she pushes initiatives that enable faster achievement the organization’s goals, one perceived as creating more bottlenecks than accelerators will not last long in the role.

Cloud to the Rescue

CIOs are challenged with consistently meeting (and hopefully exceeding) their stakeholders needs, despite the mounting pressure caused by these macro trends. Thus, even in cloud technology’s relative infancy, CIOs need to at least consider evaluating cloud solutions because of their ability to address common pain points.

Cloud technologies have the potential to help CIOs focus more on the business and less on the underlying infrastructure. While traditional ITO promised this, anecdotal and empirical evidence suggests that the reality was more often than not “your mess for less.” The subtext here is CIOs are spending too much time managing their outsourcing providers to solve technological, rather than business, problems. But fundamental to cloud architecture design is delivery of a service to the end user, which ultimately will disaggregate the supporting infrastructure from the service, and enable the CIO to focus more on solving business problems.

Cloud technologies can also address the do more with less issue. IT departments are starting to realize that the traditional one application per server approach to running enterprise infrastructure is unsustainable in a big data world. CIOs can yield benefits from cloud (and virtualization) technologies from two major drivers:

1) Increasing utilization per server – meaning either requiring fewer servers to do the same data processing volume, or squeezing more data processing out of the same volume of servers. Either way, cloud delivers more for less.

2) Thinking strategically about load balancing – an enterprise’s requirement on its IT department is neither predictable nor equal in terms of business priorities. But cloud technology enables evaluation of the trade-offs presented by flexible, on-demand data management.

Cloud technology is already having a seismic effect on expectations around business agility. For example, when the time required to procure a server goes from weeks to minutes, there is a quantifiable shift in productivity gains. And as cloud technology evolves, these gains will be further amplified.

How does the CIO’s role change?

So what does this all mean for next generation CIOs? In the short term, they will have to become informed, poke at the promises coming from suppliers, and manage the cloud hype curve on behalf of their organization.

Beyond the short term, they will need to address and manage – via a robust and sensitive change management program –the impact of the cloud’s technological transformation on a much broader set of stakeholders, including the internal IT team.

Another subtle but significant shift will be from the role of service manager to one akin to an air traffic controller for workloads. For example, with a workload that requires 240 CPU hours and you have procured a cloud that gives you 10 virtual machines, a CIO can choose to turn on one virtual machine and leave the nine others to run other workloads, but the process will take 10 days. Or, the CIO can turn on 10 virtual machines to process the same workload in one day, but the organization will be out of capacity for that day. Managing that trade off will be a new to many CIOs, and a regular situation for all.

What other concerns should CIOs have, and how should they prepare themselves?

For information on what CIOs want from the cloud: http://cloud.savvis.com/information-center and download the CIO LinkedIn Market Pulse Survey

For how roles are changing because of the cloud: http://www.pcworld.com/businesscenter/article/227238/panel_the_cloud_requires_fresh_it_skills.html

For an introduction to the economics of cloud enterprise computing that CIOs should consider, register and attend the May 24 Everest Group webinar on the topic.

Where Are Enterprises in the Public Cloud? | Gaining Altitude in the Cloud

Amazon Web Services (AWS) recently announced several additional services including dedicated instances of Elastic Compute Cloud (EC2) in three flavors: on demand, one year reserved, and three year reserved. This should come as no surprise to those who have been following Amazon, as the company has been continually launching services such as CloudWatch, Virtual Private Cloud (VPC), and AWS Premium Support in an attempt to position itself as an enterprise cloud provider.

But will these latest offerings capture the attention of the enterprise? To date, much of the workload transitioned to the public cloud has been project-based (e.g., test and development), and peak demand computing-focused. Is there a magic bullet that will motivate enterprises to move their production environments to the public cloud?

In comparison with “traditional” outsourcing, public cloud offerings – whether from Amazon or any other provider – present a variety of real or perceived hurdles that must be overcome before we see enterprises adopt them for production-focused work:

Security: the ability to ensure, to the client’s satisfaction, data protection, data transfer security, and access control in a multi-tenant environment. While the cloud offers many advantages, and offerings continue to evolve to create a more secure computing environment, the perception that multi-tenancy equates to lack of security remains.

Performance and Availability: typical performance SLAs for the computing environment and all related memory and storage in traditional outsourcing relationships are 99.5– 99.9 percent availability, and high availability environments require 99.99 percent or higher. These availability ratings are measured monthly, with contractually agreed upon rebates or discounts kicking in if the availability SLA isn’t met. While some public cloud providers will meet the lower end of these SLAs, some use 12 months of previous service as the measurement timeline, while others define an SLA event as any outage in excess of 30 minutes, and still others use different measurements. This disparity leads to confusion and discomfort among most enterprises, and the perception that the cloud is not as robust as outsourcing services.

Compliance and Certifications: in industries that utilize highly personal and sensitive end-user customer information – such as social security number, bank account details, or credit card information – or those that require compliance in areas including HIPPA or FISMA, providers’ certifications are vital. As most public cloud providers have only basic certification and compliance ratings, enterprises must tread very carefully, and be extremely selective.

Support: a cloud model with little or no support only goes so far. Enterprises must be able to get assistance, when they need it. Some public cloud providers – such as Amazon and Terremark – do offer 24X7 support for an additional fee, but others still need to figure support into their offering equation.

Addressing and overcoming these measuring sticks will encourage enterprises to review their workloads and evaluate what makes sense to move to the cloud, and what will remain in private (or even legacy) environments.

However, enterprises’ workloads are also price sensitive, and we believe, at least today, that the public cloud is not an economical alternative for many production environments. Thus enterprise movement to the cloud could evolve one of several ways. In a hybrid cloud where the bulk of the production environment will be placed in a private cloud and peak demand burst to the public cloud. Or will increased competition, improved asset utilization and workload management continue to drive down pricing, as has happened to Amazon in both of the past two years? If so, will enterprises bypass the hybrid path and move straight to the public cloud as the economics prove attractive?

The ability to meet client demands, creating a comfort level with the cloud and the economics all play a role into how and when enterprises migrate to the cloud. The market is again at an inflection point, and it promises to be an exciting time.

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