All Contents © 2007 Burton Group. All rights reserved. Demystifying Cloud Computing Drue Reeves Vice President and Research Director Cloud Computing

All Contents © 2007 Burton Group. All rights reserved.

Demystifying Cloud Computing

Drue Reeves

Vice President and Research Director

Cloud Computing / Data Center

June 16th, 2009

Cloud Computing

Thesis

• Cloud computing is transformational• Change business models, cost models, speed to provision, and data centers

• Cloud computing has many issues• Lack of clarity and hype slows adoption, and increases skepticism• Trust, security, and unclear ROI are chief issues

• Cloud computing is coming, make no mistake• Now is the time to prepare, comprehension is key• Part of the IT externalization movement; will reach equilibrium between

internal and external IT functions• Cloud helps IT organizations focus on what’s important

• Efficient IT service delivery, reduce costs and complexity, outsource non-essential IT service

“Technology alone is rarely the key to unlocking economic value: companies create real wealth when they combine technology with new ways of doing business.” Source: “Eight Business Technology Trends to Watch, McKinsey Quarterly 12/07”

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Cloud Computing

Business needs are straining IT

•Business dependency on IT continues to grow• Business and IT are becoming one

•As business dependency grows, so do the IT resources necessary to run the business• Many organizations have built massive, overly

complex, underutilized, rigid IT infrastructure

•Why we are seeing some IT initiatives• Data center consolidation, application rationalization,

virtualization• These efforts aren’t enough to stem the tide; revealing

some harsh realities…

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Cloud Computing

IT is too expensive; limits business expansion

• Owning and operating IT is an expensive, and time consuming proposition

• Many data centers are out of power/ spaceIT is too rigid; restricts business agility

• Complex infrastructures decrease the ability to respond to business needs

• Install new applications, provision additional capacity, and secure their environment

• Limits business agility and growth• Business units are forced to go outside their IT

organizations to meet their needsIT is too big and complex; cannot focus on core

business

• IT organizations have more work than personnel can reasonably manage

• Many data centers house extraneous, infrastructure that has nothing to do with the organization’s core business

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Enterprise

ITIT is completely “owned and operated” by the Enterprise’s IT organization

Strategic and non-strategic IT Services

Cloud Computing: Transforming IT

Enterprise

ITSaaS

PaaS

SIaaS

HIaaS

Cloud Computing

Post-Modern IT

Strategic IT Services

Non-Strategic IT Services



Agenda

•What is Cloud Computing?• Cloud definition and architectural model

•Why do we need it?• Cloud Computing benefits

•Why wouldn’t we use it?• Issues and drawbacks

•Recommendations

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Cloud Definition and Model

•Burton Group defines cloud computing as: The set of disciplines, technologies, and business models used to render IT capabilities as an on-demand, scalable, elastic service. (aka “the cloud”)

•A cloud is a “specific instance” of a cloud computing service. For example, Amazon’s Elastic Compute Cloud (EC2) is a specific cloud computing vendor implementation.

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Other common cloud computing definitions include:• Public cloud: An IT capability as a service that providers offer to consumers via

the public Internet. • Private cloud: An IT capability as a service that providers offer to a select group

of customers. • Internal cloud: An IT capability as a service that an IT organization to its own

business (subset of private cloud).• External cloud: An IT capability as a service offered to a business that is not

hosted by its own IT organization.• Hybrid cloud: IT capabilities that are spread between internal and external

clouds• Service provider: The organization providing the cloud service. Also know as

“cloud service provider” or “cloud provider”.• Service consumer: The person or organization that is using the IT capability

offered as a service. • Service procurer: The person or organization obtaining the service on behalf of

service consumers.

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Cloud Computing Characteristics

• Elastic and scalable• Consumers can quickly provision and de-provision IT services; Cloud service

appears infinitely scalable to the consumer• Self-service

• Consumer have the ability to use cloud services as the need arises; Self-service increases IT agility to match the pace of business

• Consumption-based pricing model• Vendors charge customers based on amount of the service consumed. Customers

pay for only the IT services they use, thereby increasing IT ROI• Shared infrastructure

• Vendors leverage the infrastructure to service multiple consumers; Multi-tenancy is vital to driving down infrastructure costs

• Virtualized and dynamic• Virtualization creates a dynamic environment for quick resource provisioning and

better resource management

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Cloud Computing 11

Hardware Infrastructureas a Service

Software Infrastructureas a Service

Platform as aService

Softwareas a Service

Example

Google Apps, Salesforce.com, backup as a Service

Microsoft Azure, Force.com, Google App Engine, Oracle’s Cloud Strategy

Data service providers, Identity mgmt providers, security service providers

EC2, System hosting providers (BT, AT&T, Sprint) + Virtualization vendors

Cloud Tiered Architecture

Hardware Infrastructureas a Service (HIaaS)

Software Infrastructureas a Service (SIaaS)

Platform as aService (PaaS)

Softwareas a Service

(SaaS)

Service Consumer

IT Organization Built Solution IT

Organization Built

Solution IT Organization Built Solution

Service Interfaces

IT Organization Solution Architect

Cloud Computing: Transforming ITIT organization point-of-view


Agenda




•Recommendations

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Cloud computing benefits (in theory…):

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Cloud Benefits:

•Simplifies and Optimizes IT• Enables IT to offload non-essential IT processes; reducing internal IT

complexity• IT organizations can optimize their IT resources by focusing internal

services on core business value processes, rather than wasting time and energy managing lesser value IT services and resources that can be externalized

•Public cloud business models allow IT organizations to defer costs today. Long term, overall IT prices will stabilize• Cloud services enable act as a release value for data centers that are

power and space constrained, deferring new data center construction

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Cloud Benefits

• On demand, self-service business models increase IT agility• Using the cloud, IT organizations can quickly provision IT resources

whenever business demands, especially for short-term IT resource needs

• Enables Faster ROI through better resource management• Pay as you go: IT organizations pay for only the IT services they use,

enabling better resource tracking, budget forecasting and faster return on invested IT dollar

• Ceiling price: IT organization consume as much as they like (up to a ceiling) encouraging outside consumption without process red-tape

• Cloud computing vendors employ highly skilled IT professionals to operate their service• Cloud computing business models require providers to hire, train, and

retain highly skilled employees to ensure service quality

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Cloud Benefits

•As cloud computing trust increases, IT organizations will use cloud services as a disaster recovery option• Rather than using a co-location facility or a new data center, IT

organizations will backup data to the cloud

•Public and externally facing private clouds can more easily support a mobile workforce• Internet-based clouds (public and private) provide greater IT service

access to mobile workforce than internally hosted IT services accessed via VPN

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Resource GrowthRate

Time

Resource Usage Growth

Excess Capacity

Purchased

Time to utilization

Traditional IT Growth Pattern

Cloud Growth Pattern

Cloud Computing: Transforming ITCloud computing-based IT resource growth model


Agenda




•Recommendations

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Why Cloud Computing? 20

Cloud is the opiate of the enterprise masses?


Cloud Drawbacks and Concerns:

• Poor or non-existent service-level agreements (SLAs)• Inflexible, boilerplate SLAs are the norm

• Inability to manage risks• Lack of vendor transparency and inability to audit service security measures

obscures risk assessment• Unclear return-on-investment

• Poor cost insight creates an inability to determine cloud service costs• Vendor lock-in

• Lack of cloud interoperability, proprietary data models, and poor application portability make cloud migration difficult

• Market immaturity• Vendor flux and poor service implementations creates consumer uncertainty

• Inability to manage and monitor service for events and issues• Lack of management APIs /monitor/verify service levels

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Cloud Issues

•Shared Infrastructure• As we open up systems, customers expect the same security,

reliability, and availability• Who are you sharing that server with?

•Consumption-based pricing• What happens if you don’t pay your bill? Do you lose your data?• How do I control and monitor consumption? (Wireless phone bill)

• Improved Business Continuity and Elasticity• What infrastructure is my applications running on?• What protection do I have against outages?• What legal recourse do I have?

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Cloud Issues

•Massively scalable• Where does my data reside? In a foreign country?• Can any “fly-by-night” code-jockey be a cloud?

•Mobility and Flexibility• Will vendor relationship management hamper mobility?• Will we see service brokers emerge?

• Internet-based and easily accessible• Will the cloud enable an increase of shadow IT?

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Agenda




•Recommendations

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Cloud Computing Recommendations (ying)

• Build an internal cloud• Building an internal IT services model can ease cloud adoption. IT

organizations must comprehend what applications and infrastructure can/should be moved to the cloud

• Evaluate your organization’s ability to consume the cloud • IT organizations must determine the processes and infrastructure that can be

moved to the cloud and those that cannot. Can the organization manage multiple cloud vendor relationships?

• Scale incrementally and offload non-value added capacity • Use the cloud to offload applications and infrastructure that are not core. The

cloud can act as a pressure release valve for IT organizations that have insufficient IT personnel or are out of power and space

• Use the cloud to operate at a higher level • IT organizations must right-size their IT capabilities and focus on core

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Cloud Computing Recommendations (yang)

• Don’t abdicate responsibility to the cloud • Although cloud computing represents a way to offload IT capabilities, service

delivery and liability remains with the IT organization• Calculate cloud costs vs. do-it-yourself (DIY) costs

• Monitor cloud costs closely and watch for hidden charges. Compare cloud costs to hosting the same service internally including operational costs (e.g. energy or personnel) and capital costs (e.g. servers, storage, and software).

• Safeguard your data • Data is a primary business asset. Before putting data into the cloud, clearly

identify any potential risks to data

Cloud is coming, now is the time to prepare. Cloud computing’s on-demand business model, elasticity, and scalability enable IT organizations to streamline operations, offload lesser value IT processes and focus on core business value

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Burton Group Resources

Documents and other related content

• “On the Death of SOA” – Chris Howard• “Facing the Headwind: Good Ideas for Bad Times” – Chris

Howard“Cloud”: Infrastructure

• The Dynamic Data Center • Data Center Model

IT1 Upcoming Research

• Cloud Computing Root Document• Cloud Storage• Moving Out: The Externalization of IT• Cloud Computing Risk Management

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http://www.burtongroup.com/Client/Research/Document.aspx?cid=1516




28Q & A

All Contents © 2007 Burton Group. All rights reserved. Demystifying Cloud Computing Drue Reeves Vice President and Research Director Cloud Computing

Documents

cloud computing business

cloud computing service

services cloud computing

cloud computing benefits

cloud definition

data centers cloud computing

functions cloud

chief issues cloud computing