Cloud Unleashed

Cloud Computing

First Toy which I gave to my kid at the age of 1 was Building Blocks, by which they learn to add blocks to build various shapes/structures. When we introduce cloud computing, we need to think clouds as a building block. These blocks could be spread across various geographies and provide solution to various organization.

In early 2000, Microsoft/Sun introduced COM/DCOM component level programming where they had shown how various components could be build at various location and integrated as per the business model. Companies during that time were thinking within limited boundaries where they had component building techniques only for solving issues for their own products.

1. Companies of 21^st Century: - Lean and outsource most of the jobs. Keep what you need to maintain
   
2. Methodology for having Cloud computing
   
   1. How Clouds can be build for various application (Web server architecture)
      
   2. Virtualization
      

   
    

3. Type of Clouds
   
   1. Public
      
   2. Private
      
   3. Hybrid
      

      
       

4. Type of Services available on Cloud Computing
   
   1. LAAS
      
   2. SAAS
      
   3. PAAS
      
5. Cost impact
   
   1. Operation Cost
      
   2. CPU managing like batch jobs etc,
      
6. Pricing
   
7. Case Study
   
8. Various Companies providing clouds.
   

 

 

Backup

 

1. What distinguishes cloud computing from previous models? Boiled down to a phrase, it's using information technology as a service over the network. We define it as services that are encapsulated, have an API, and are available over the network.
   
2. It shortens the time from sketching out an application architecture to actual deployment. Cloud computing incorporates virtualization, on-demand deployment, Internet delivery of services, and open source software. From one perspective, cloud computing is nothing new because it uses approaches, concepts, and best practices that have already been established.
   
3. Concept of Virtual machine
   
4. The ability to use and pay for only the resources used shifts the risk of how much infrastructure to purchase from the organization developing the application to the cloud provider. It also shifts the responsibility for architectural decisions from application architects to developers. This shift can increase risk, risk that must be managed by enterprises that have processes in place for a reason, and of system, network, and storage architects that needs to factor in to cloud computing designs.
   
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Introduction

First Toy which I gave to my kid at the age of 1 was Building Blocks, by which they learn to add blocks to build various shapes/structures. When we think cloud computing, we should think clouds as a building block for creating complex network. These blocks would fit other blocks and hence build a complex structure which could be spread across various geographies. What distinguishes cloud computing from previous models? Boiled down to a phrase, it's using information technology as a service over the network. We define it as services that are encapsulated, have an API, and are available over the network.

 

 

 

Figure 1:- Building Block for Cloud computing

 

 

In early 2000, Microsoft/Sun introduced COM/DCOM component level programming where they had shown how various components could be build at various location and integrated as per the business model. Companies during that time were thinking within limited boundaries where they had component building techniques only for solving issues for their own products.

It shortens the time from sketching out an application architecture to actual deployment. Cloud computing incorporates virtualization, on-demand deployment, Internet delivery of services, and open source software. From one perspective, cloud computing is nothing new because it uses approaches, concepts, and best practices that have already been established.

 

 

 

 

 

Companies of 21^st Century: - Lean and outsource most of the jobs. Keep what you need to maintain

 

Companies in 21^st centuries are evolving to ensure that they are making them so lean and flat that management can concentrate on their core competencies and outsource their non core components. Companies are creating clouds at various geographies which could be accessed when required and could be revisited without thinking of huge investments.

Nike Cloud Structure

Nike Footwear Company has design centre at various locations where they do market study to ensure the product stratifies customer demands. However, Nike doesn't have any manufacturing units. They have created various clouds in China where designs of shoes are crafted into product and exported to the countries where they have the demands. Nike has various quality units which ensure that product support customer quality parameters. Nike has ensured that they are only paying for products but have not invested of CAPEX required for building and running these units. However, if tomorrow Nike wants to shift their base of manufacturing, maybe due to cost reason, Nike just need to create a new cloud without actually thinking of investment and could be more rational decision. This has given Nike agility to decide faster and always be competitive.

Telco Cloud Strategy

In normal Telco deal, Product of Cisco or ALU will act as channel partner for Service provider where they take margins and provide AMC contract. In future the telco's will open network partner ecosystem where their vendors will be sitting on-demand through which enterprise customers will have access via portal. So range of service could be CRM products, skype. New Services will thereby be available and paid for on-demand and transformational projects that offer the enterprise new set of functionality that can be delivered out of Opex budget rather than cash-hungry CAPEX.

The BT strategy that underpins this wired world of soft communication is branded as the SOI (Service oriented Infrastructure). AT&T describes its Telco 2.0 strategy as the intelligent network and telefonia is working on similar strategy through its Aquesta project.

 

 

Figure 1:- Nike Cloud for manufacturing

 

 

 

Market Potential

 

SAAS	PaaS	IaaS
Salesforce.com	Force.com	Amazon Elastic Compute cloud
SAP Business by Design	Google App Engine	GoGrid Cloud Hosting
Cisco WebEx	Microsoft Azure Services
Google Apps
IBM LotusLive
Microsoft BPOS

        Figure X:- Cloud examples in market

 

Technical Architecture

 

Example Web application deployment

As an example of simple architect of application deployment in cloud computing. Consider a two-tier Web application deployment into a cloud:

1. A developer might choose a load balancer, Web server, and database server appliances from a library of preconfigured virtual machine images.
   
2. The developer would configure each component to make a custom image. The load balancer would be configured, the Web server populated with its static content by uploading it to the storage cloud, and the database server appliances populated with dynamic content for the site.
   
3. The developer layers custom code into the new architecture, making the components meet specific application requirements.
   
4. The developer chooses a pattern that takes the images for each layer and deploys them, handling networking, security, and scalability issues.
   
5. The secure, high-availability Web application is up and running. When the application needs to be updated, the virtual machine images can be updated, versioned, copied across the development-test-production chain, and the entire infrastructure redeployed. Cloud computing assumes that everything is temporary, and it's just as easy to redeploy an entire application than it is to manually patch a set of individual virtual machines. In this example, the abstract nature of virtual machine images supports a composition-based approach to application development. By refactoring the problem, a standard set of components can be used to quickly deploy an application. With this model, enterprise business needs can be met quickly, without the need for the time-consuming, manual purchase, installation, cabling, and configuration of servers, storage, and network infrastructure.
   
   

 

 

 

 

 

 

    Figure X:- Architectural of Cloud computing

 

Infrastructure Models

 

Depending upon the requirement and also availability of the product in the mind, companies select one of the following models of cloud:-

 

• Public cloud :- Clouds which are run and maintained by third party. Most common example is salesforce.com CRM where company has tied up with various companies to manage their CRM. This CRM needs to be customized depending upon user privilege/type of industry/Name of the company. Major advantage of using such services is companies don't have to invest on creating infrastructure and also manpower is not require to be maintained. Companies provide various reports which is useful for companies to extract data in user friendly format.
  
• Private cloud:- Private clouds are built for the exclusive use of one client, providing the utmost control over data, security, and quality of service (Figure 4). The company owns the infrastructure and has control over how applications are deployed on it. Private clouds may be deployed in an enterprise datacenter, and they also may be deployed at a colocation facility.
  
• Hybrid cloud:- Hybrid clouds combine both public and private cloud models (Figure 5). They can help to provide on-demand, externally provisioned scale. The ability to augment a private cloud with the resources of a public cloud can be used to maintain service levels in the face of rapid workload fluctuations. This is most often seen with the use of storage clouds to support Web 2.0 applications. A hybrid cloud also can be used to handle planned workload spikes. Sometimes called "surge computing," a public cloud can be used to perform periodic tasks that can be deployed easily on a public cloud. Most common example of Hybrid is when user look for cheapest ticket. All airlines companies maintain Db which is specific to their system where presentation layer is maintained by 3^rd parties like makemytrip/etc etc. Please refer case study regarding Architecture and pricing of the cloud computing in last chapter where this has explained in great details.
  

 

Cloud Providers

 

Cloud service providers tend to offer services that can be grouped into three categories: software as a service (SAAS), platform as a service, and infrastructure as a service. These categories group together the various layers illustrated in Figure 6, with some overlap.

 

• SAAS :- SaaS features a complete application offered as a service on demand. A single instance of the software runs on the cloud and services multiple end users or client organizations. The most widely known example of SaaS is salesforce.com, though many other examples have come to market, including the Google Apps offering of basic business services including email and word processing.
  
• PaaS :- PaaS encapsulates a layer of software and provides it as a service that can be used to build higher-level services. Most of large OEM are concentrating on developing such platform which could be deployed at various Service provider and developer communities could devlop various application on top of the platform. E,g 5400 IAS server of ALU or 8690 ALU OSP.
  
• LaaS:- Infrastructure as a service delivers basic storage and compute capabilities as standardized services over the network. Servers, storage systems, switches, routers, and other systems are pooled and made available to handle workloads that range from application components to high-performance computing applications.
  

 

 

 

Companies supporting Providers

 

 

 

Pricing

With Advent of Web 2.0 and cloud computing, companies are creating new business model to ensure that they are competitive advantage and provide differentiation to end customer. For any company pricing strategy is a major component be it product or Services company. Companies need to look how to amortize their investment and ensure that companies provide value to shareholders. Companies need strategize how they would like to position their Cloud, should pricing be value base or cost base, Should pricing be Volume or per unit based. After all, Cloud providers pride themselves in allowing tenants to pay a periodic base cost as per their usage. So how should cloud offering be priced. One of the option (specifically for SaaS), we should focus on boosting adoption rate and deferring creation of income and margin later stage of the product.

Companies accept that cloud computing model has been evolving and would take some time to mature and would increase stake of all the stakeholders while deploying the network. Revenue of each stakeholder will depend how the network is being adopted by end customers. As per industry one is servicing, cloud needs to be priced such that it should address company objective and maximize Value creation of the company :-

1. Boost Adoption: - This pricing could be applied by lowering the entry barrier of using the cloud. It is more appropriate for SaaS, where more revenues are envisages by involving more customers. Depending upon a service which is providing which have lot of competition decreasing price could bolster the sales. However if company starts providing free usage, the customer tend to take this as a habit and difficult to get rid of the same.
   
2. Cover Costs :- This applies for IaaS where companies provide infrastructure for accessing or deploying services. Here the cost of the Capex and Opex is know, companies with limited markup can provide pricing figure. Margin could depend upon commitment from the customer, if the customer is tending to providing long term commitment for the hardware, markup could be accordingly reduced.
   
3. Generate Healthy Margins and Profit :- This method could be applied for PaaS, where companies have unique offering and could ensure with proper market positioning they can create proposition which ensure them to skim the cream from market. Big OEM in telcom market are eyeing this space which include ALU (with its AE strategy) and NSN with open cloud acquisition.
   

   
    

Companies supporting Providers

Name of the Company	Type of Cloud	Description