Cloud Computing: Transforming IT

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Cloud Computing: Transforming IT

December 3rd_{, 2009}

Evaluating the Technology that is transforming IT

Drue Reeves Research Director Cloud Computing / Data Center

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Cloud Computing: Transforming IT

Thesis

• Cloud computing is transformational

• It will change business models, cost models, speed to provision applications, and data centers

• Cloud computing has many issues

• Lack of clarity and overexposure slows adoption, and increases skepticism

• Trust and security are chief issues

• ROI justification isn’t always straightforward

• 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

• Reducing costs

• Reducing complexity

• Outsourcing non-essential IT services

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What is Cloud Computing?

• Start with a definition • Clears up any ambiguity

• Everyone on the same page

• Key takeaways

• Clear definition and model

• How/where to leverage the cloud and pitfalls to avoid

• Cloud business value and formulate a cloud strategy

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Agenda

• Why Cloud Computing?

• Cloud Definition and Characteristics • Cloud Tiered Architecture

• Cloud Benefits

• Cloud Drawbacks and Concerns • Cloud Futures

• Recommendations

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Why 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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Why Cloud Computing?

IT is too expensive, rigid, and complex

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

• Many data centers are out of power/ space

• 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 needs

• 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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Economics of IT

capitalize the core

(specific to me)

capitalize the core

(specific to me) expense the _context

(commodity)

expense the context

(commodity) 7

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Enterprise

IT IT is completely “owned _{and operated” by the}

Enterprise’s IT organization Strategic and

non-strategic IT Services

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Enterprise IT SaaS PaaS SIaaS HIaaS Cloud Computing Post-Modern or Hybrid IT Strategic IT Services Non-Strategic IT Services

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Agenda

• Why Cloud Computing

• Cloud Definition and Characteristics

• Cloud Tiered Architecture • Cloud Benefits

• Recommendations

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What is Cloud Computing?

The set of disciplines, technologies, and

business models used to deliver IT

capabilities (software, platforms, hardware)

as an

on-demand, scalable, elastic service

How can I make this...

Look more like this?

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Cloud Computing: Transforming IT

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

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Elastic and Scalable

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• Consumers can rapidly provision and de-provision IT services • Cloud service appears infinitely scalable to the consumer

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On-Demand, Self Service

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

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Consumption-based pricing model

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• Vendors charge customers based on amount of the

service consumed (finely granular basis.

• Customers pay for only the IT services they use, thereby increasing time to ROI

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Shared Infrastructure

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

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Virtualized and Dynamic

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• Virtualization creates a dynamic environment for quick resource provisioning and better resource management

• From the consumer point-of-view, the details of the infrastructure are abstracted away

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Agenda

• Cloud Definition and Characteristics • Cloud Tiered Architecture

• Cloud Benefits

• Recommendations

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Cloud Computing: Transforming IT

19 Hardware Infrastructure as a Service Software Infrastructure as a Service Platform as a Service Software as a Service Example

Google Apps, on-line email, Salesforce.com, backup as a Service Microsoft Azure,

Force.com, Google App Engine, Tibco Silver, IBM sMash (AMI)

Data services, Identity mgmt, security services providers, CDN

AWS/EC2, System hosting providers (BT, AT&T,

Sprint) + Virtualization vendors

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Hardware Infrastructure as a Service (HIaaS) Software Infrastructure as a Service (SIaaS) Platform as a Service (PaaS) Software as 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 IT

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Agenda

• Cloud Benefits

• Recommendations

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Cloud Computing: Transforming IT

Cloud Benefits:

• Simplifies and Optimizes IT

• Reduce complexity by abstracting infrastructure

• Enables IT to offload non-essential IT processes; refocuses staff on driving core business value

• Allows IT organizations to defer capital costs

• Cloud services enable act as a release value for data centers that are power and space constrained, deferring new data center construction

• Converts capital expenses into operational expenses

• On demand, self-service models increase IT agility

• Using the cloud, IT organizations can quickly provision IT resources whenever business demands, especially for short-term IT resource needs

• Cloud computing vendors employ highly skilled IT professionals

• Cloud computing business models require providers to hire, train, and retain highly skilled employees to ensure service quality

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Cloud Computing: Transforming IT

Cloud Benefits

• Enables Faster ROI through better resource management • IT organizations pay for only the IT services they use, enabling better

resource tracking, predictable costs, budget forecasting and faster ROI

• 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

• Ubiquitous access to external IT services better support mobile workforce than internally hosted IT services accessed via VPN

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Agenda

• Cloud Benefits

• Cloud Drawbacks and Concerns

• Cloud Futures

• Recommendations

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Inflexible/Non-Existent SLAs

• Inflexible, boilerplate service-level agreements are norm 25

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Inability to Manage Risks

• Lack of vendor transparency and inability to audit service security measures obscures risk assessment

• Data security and compliance vary by vendor; IT

organizations must dig into vendor’s storage replication, data encryption, account access

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Unclear Long-Term Return On Investment

• Poor internal cost insight creates an inability to determine cloud service ROI

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Return On Investment

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Market Immaturity

• Vendor flux and poor service implementations creates consumer uncertainty

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Inability to Monitor/Manage

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

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Vendor Lock-in

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

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Vendor Lock-In

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Cloud Characteristics

Let’s Look at those cloud characteristics again…

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Elastic and scalable

• What infrastructure is my applications running on? • How much of the service can I consume at one time?

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On-demand, Self-Service

• Will the cloud enable/increase shadow IT?

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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)

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Shared Infrastructure

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Virtualized and Dynamic

• Can the vendor move my data or application?

• Will that cause a data compliance issue? (Federal, state, etc)

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Agenda

• Cloud Benefits

• Cloud Drawbacks and Concerns • Cloud Futures

• Recommendations

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Cloud Futures

Technology and Vendor Trends

• Competition will increase, prices will decrease

• Cloud enablers (E.g. VMware) bringing a deluge of vendors to IaaS

• Product stratification (vCloud Express, ATMOS storage)

• Rise of enterprise grade clouds

• Announcements soon on customer-driven enterprise cloud

requirements

• Hybrid and federated clouds

• To compete, cloud vendors will federate best-in-class cloud services

• Increase in private clouds

• Both from public clouds (e.g. VPCs) and completely private entities

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Cloud Futures

Technology and Vendor Trends

• Standardization

• OVF, vCloud API, Delta Cloud

• Cloud brokers

• Aggregate and vet providers, limit liability, predict cloud capacity

• Negotiable and programmatically readable SLAs

• Some vendors already negotiate

• Integration with enterprise management vendors • Blur the lines between internal and external clouds

• Will some countries become data safe havens? • Will the Patriot Act drive data away from the US?

• What effect does this have on the US economy?

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Agenda

• Cloud Benefits

• Recommendations

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Cloud Computing Recommendations

Devise a cloud strategy now: multi-step approach

• Conduct a business impact analysis on all applications;

• Determine processes, applications and infrastructure that can be moved to the cloud and those that cannot

• Evaluate your organization’s ability to consume the cloud

• Cloud will likely change business processes; IT cannot change those

processes alone. Business process owners must involve partners, suppliers

• Can the organization manage multiple cloud vendor relationships?

• Make sure to involve legal, finance, procurement, etc.

• Calculate cloud costs vs. do-it-yourself (DIY) costs

• Compare cloud costs to hosting the same service internally. Requires internal cost model

• Monitor cloud costs closely and watch for hidden charges

• Match cloud vendor offerings with application needs

• At all cloud levels (SaaS/PaaS/IaaS)

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Cloud Computing Recommendations

Devise a cloud strategy now: multi-step approach

• Evaluate vendors capabilities, services levels, deficiencies and risks:

• Don’t abdicate responsibility to the cloud -- look closely at SLAs, records of downtime, ask to talk with customers

• Risk assessment to data and applications

-- http://www.enisa.europa.eu/act/rm/files/deliverables/cloud-computing-risk-assessment

• Limit your liability and safeguard your data

• Although cloud computing represents a way to offload IT capabilities, service delivery and liability remains with the IT organization

• Data is a primary business asset. Before putting data into the cloud, clearly identify any potential risks to data

• Cloud brokers, insurance, use multiple vendors

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Cloud Computing: Transforming IT

Cloud Computing Recommendations

• Build an internal cloud

• Build a target cloud architecture (internal/external/hybrid) that aligns with external cloud vendors; symmetry is key

• Comprehend vendor lock-in consequences before adoption

• Have an exit strategy

• Finally, scale incrementally; offload non-value capacity; focus on core

• 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

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Cloud Computing: Transforming IT

Conclusions

• Cloud computing is transformational

• Change business models, cost models, speed to provision, and data

centers

• Cloud helps IT organizations focus on what’s important

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

• 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

• Part of the IT externalization movement

• Now is the time to prepare, comprehension is key to unlocking business value

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Dave’s Top 10 Cloud Security Risks*

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Dave’s Top 10 Cloud

Security Risks*

1. Loss of governance – ceding control to the provider

2. Lock-in

3. Isolation failure – virtualization, networks, data

4. Compliance risks – watch how your data is replicated

5. Management interface compromise – No IdM, Blank

Checkbook, Largely accessable

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Dave’s Top 10 DCS Ref

Arch Fixes

6. Data Protection – in flight, at rest

7. Insecure of incomplete data deletion

8. Malicious insider

* Derived from ENISA’s Cloud Benefit’s, Risks, and Recommendations for Information Security

9. Cloud vendor service failure or termination

10. Service limitations – resource exhaustion on part of

the service provider

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References and Recommended Reading

Burton Group

• Cloud Computing: Transforming IT

• Cloud Computing: An Executive Primer

• Moving Out: The Externalization of IT

• Software as a Service Enterprise E-Mail: Get Ready to Go Beyond the Grind

• SaaS Implementation Survey: Where, When, and How to Use SaaS

External Sources

• Dot.Cloud – Peter Finigar

• Toward a Unified Ontology of Cloud Computing –

Youseff, et al. UCSB

• http://www.enisa.europa.eu/act/rm/files/deliverables/cloud-computing-risk-assessment

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Cloud Computing: Transforming IT

Burton Group Offer

• Free cloud document “Cloud Computing: Transforming IT”

• Give a business card to Scott LeSueur

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Cloud Computing: Transforming IT

Questions?

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