The Business perspective on Cloud Computing

The Businessperspective on

Cloud Computing

25.05.2009

Copyright 2009 Macquarie Telecom

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The Logical Evolution of Virtualisation

Viewed in context, Cloud Computing is the natural evolution of the abstraction concept delivered by virtualisation technology. “Cloud” is one term of many, which is used to describe this evolving concept of computing. This new paradigm (whatever we choose to label it) is promising to transform the computing model from a largely static connection between Applications and Hardware, and discrete expansion dictated by physical equipment limitations to an integrated computing platform capable of more granular scalability and flexibility.

There is currently a tremendous amount of uncertainty about what Cloud Computing actually is; epitomised by the multitude of differing interpretations and definitions. While generating interest due to its novelty, the current generation of Cloud offerings are in the main, limited to software services and in most cases, not suitable for business-grade requirements. These best-effort services lack the necessary features such as Service Level Guarantees (SLG) and Service Assurance to support mission-critical requirements. There will be multiple iterations before the industry arrives at an acceptable business-grade Cloud Computing service.

Our understanding of Cloud Computing

The term Cloud Computing is a relatively new and all-encompassing catchphrase which is used to describe any new offering that defies characterisation into traditional product envelopes. As a result, different providers have their own interpretation on what a Cloud service should be defined as.

Currently, Cloud Services can be roughly divided into two broad camps; “Cloud Software services” and “Cloud Computing services”, as illustrated by Figure 1. They represent different levels of abstraction of the underlying computing resources, which is ultimately enabled through some form of virtualisation technology.

Figure 1 The different definitions supporting the Cloud Infrastructure

It is worth pointing out the differences here between Cloud Software services and Cloud Computing services. Cloud Software describes services which are typified by the delivery of ready-to-consume software services over the internet exemplified by services such as Salesforce, Gmail and the like. Cloud Computing is the hardware equivalent – the delivery of












previously unwieldy hardware components (with long purchasing lead-times and integration issues) as user-definable and modularly scalable instances of computing services – which can be raw computing power, storage capacity, server configurations, etc. Amazon’s EC2 is arguably a first generation example of a “cloud computing service”.

These definitions are sometimes complicated through the use of “anything-as-a-service” tags. As further detailed in Figure 1, the “anything-as-a-service” terms such as SaaS, PaaS, IaaS are commonly used to describe the underlying layered component architectures which is used to deliver end-user Cloud Services (either Software, Platforms or Computing infrastructure).

The common markers which constitute a Cloud Service are:> an underlying supporting infrastructure architecture which is shared> the ability to scale quickly giving the impression of elastic expansion> charging based on (variable or fixed) operational expenditures instead of large upfront investments

The trends behind Cloud Computing

The Cloud paradigm brings together prevailing underlying threads in technology and computing advances such as:

> Virtualisation which was originally a method for improving the efficiency of CPU loads on mainframes but has since been applied to maximise the utilisation of x86 based server/storage hardware. Virtualisation is a key building block for assembling cloud infrastructure.> The underlying networking architecture which allows us to bring together disparate computers and networks to form a survivable platform – elements of this architecture support the cloud. The internet is the prototypical Cloud architecture.> Availability of high bandwidth is the necessary delivery mechanism and precondition for successful Cloud Service distribution to end-users of the service.> Utility paradigm confirms the acceptance of operational outlays as opposed to large upfront capital intensive investments and provides the underlying shift in thinking about how computing services are consumed, yielding increased cost flexibility and efficiency.

Business requirements for Cloud Computing

Cloud Computing can confer operational advantages stemming from its ability to remove complexity from the business user, thereby freeing businesses from the constraints of hardware technicalities in order to focus on delivering services to their customers.When managed properly, some of the advantages of Cloud Computing for businesses are:

Increased AgilityThe essence of cloud services is its apparent ability to flex by upscaling or downsizing on-demand. Through Cloud Computing, a business can manage the swings in demand without investing for peak demand. This is especially useful to cater for demand spikes or itinerant requirements and also to offload batch processing jobs.

Reduced time-to-marketThe abstraction of the underlying layers of computing hardware and the utility delivery model allows businesses to compress development and design cycles enabling faster time-to-market, instead of being dictated by hardware or procurement lead time and integration issues.












Cost efficiencyThe utility model of cloud computing converts the cost equation from one-off large and lumpy hardware capital purchases to operational expenses which are spread to match the consumption of the service. Utility based charging may be attractive depending on the specific usage pattern or demand requirements.

A business-grade Cloud Computing service must offer all this without compromising mission-critical performance and availability.

Aspects of Cloud Computing to be mindful of

The nature and broad definition of Cloud Computing makes it unwieldy to define and characterise. Hence the suitability of one form of Cloud Computing to another rests heavily on the business objectives sought and acceptable risk profile and should at least be considered (or measured) along these dimensions.

Different Types of CloudsThere are several options when it comes to deploying Cloud services – anywhere from building and managing your own cloud (i.e. an Internal Cloud) at one end of the spectrum to the other end of the spectrum where you can buy services when you need them from a Cloud provider. Of course, there are many intermediate options between the extremes of Internal Clouds and Public Clouds scenarios and many permutations in between (i.e. shared vs dedicated, etc). One such option is the Private Cloud.Private Clouds provide the flexibility and control of your own cloud platform without compromising security and data integrity. This version of the cloud is a federation of internal clouds and external clouds segments managed by a Hosting provider. Public Clouds on the other hand, are by definition operated by integrated third-party providers and enables many businesses to share a pool of computing resources. Ultimately business objectives will dictate whether a certain cloud configuration or a combination (i.e. hybrid) configuration is actually deployed.

Flexibility to match your applicationsMost large public cloud offerings are based on a particular platform which means that applications needing to utilise the cloud computing offering needs to conform to the strict boundaries imposed by the underlying platform architecture. This “take it as it is” mentality is evident in first-generation cloud services and before your business considers utilising a public cloud computing platform, careful consideration needs to be given to the application re-engineering costs and the ensuing complexities. This will especially affect the early stages slowing down the migration process which runs counter to the agility promised by cloud services. Generally, the more customised the applications, the more challenges will be faced when trying to shoehorn it onto a public cloud offering. The private cloud route provides a more viable option for proprietary application requirements.

Visibility and Management of the cloudAnother advantage promised by Cloud Computing is the ability to view and manage your instance of the cloud. The ability to “look” into the cloud and to control how its resources are used is a vital component of the equation. Typically the management tool is used to track utilisation levels, analyse trends and may even extend to some form of Virtual Machine self-service instantiation. A cloud offering is only as strong as the available management tools which accompany it – imaging flying an aeroplane without any dials or indicators!

Quantifying the real costs












While cloud computing promises to reduce the costs of IT operations, its unclear whether this will apply across the entire range of cloud services offerings and for what circumstances this will apply to -as an example it could be argued that it would cost more to use cloud services if a large business needs a customised implementation, as opposed to “off the shelf” requirements of a small business. Initial market adoption patterns are indicating that cloud services are cost-effective mainly for smaller businesses exemplified by their pervasive use of cloud software services such as Salesforce.com, GoogleApps, etc.

Service Reliability and PerformanceThe impact of delivering business critical applications over cloud computing on the application performance metrics need to be considered. Specifically, will the physical location of the cloud platform change the latency characteristics of the application thereby adversely affecting usability and more importantly, what is the availability of the cloud platform - does the SLA match your business requirements and will the cloud provider back it up with appropriate Service Level Guarantees (SLG). When your service goes down, who can you call to get it back on line?

Data TransferWith the demand for richer media and the continuing commoditisation of computing hardware, applications are continually churning out more and more data. However, Internet data transfer charges remains relatively expensive and even worse, Internet data transfer rates (i.e. speeds) have not kept pace with advances in computing hardware. The data transfer costs and the time taken to transfer large datasets (in the order of Terabytes) into the cloud for processing is considerable and significant enough to be considered as its own cost item which needs to be factored in when considering utilising cloud computing services.

Data security and ConfidentialityOne of the risks inherent in current Cloud Computing offerings is data integrity. Businesses have to weigh-up the risk of storing their data on the cloud provider’s platform (many of whom are located out of country); which may have specific regulatory and privacy implications depending on which industry or country the business is operating in. What will happen to your business data if the cloud provider is no longer a going concern?Furthermore, in a public cloud environment different business applications are all sharing a common infrastructure platform so consideration needs to be given to whether there could be any risk of data contamination from virus transfers or otherwise.

Risk to Business ReputationConsider this - your business data or applications could be hosted on the same cloud computing service as potential Internet villains, who use the cloud platform to launch DoS attacks or spam storms. This one customer’s bad practices could reflect negatively on the cloud platform as a whole. In extreme cases, entire ranges of IP addresses from the offending cloud provider could be blacklisted, rendering your business a victim of inadvertent collateral damage of other businesses unsavoury practices.

How is Macquarie Hosting approaching Cloud Computing

As the leading provider of mission-critical application hosting services in Australia, Macquarie Hosting is committed to the evolution and progression of the underlying technologies which enables the delivery of advanced hosting services to the end customer. It is our aim to ensure that cloud computing services delivers net operational advantages to businesses without











unduly complicating an already complicated environment. Ultimately, we believe the computing and hosting industry has started its journey on the path to a utility-based computing model – however Cloud Computing is still very much conceptual in nature and needs to be developed and refined further.

Cloud computing is the natural evolution of a virtualised ecosystem. Colocation, dedicated servers, Virtualised servers and Cloud Computing are all points along a continuum of managed hosting services. The current trend toward cloud computing is a convergence of the evolving trends in computing - abstraction (enabled by virtualisation technology) and automation. Cloud Computing is large-scale platform virtualisation as opposed to per hardware component virtualisation (i.e. individual server virtualisation). As the leader in business-grade virtualised ecosystems, we are well placed to deliver this next-generation computing service.

The concept of “Cloud” is still being developed. The Cloud Computing concept is currently still work-in-progress and is undergoing continual development and refinement; and will manifest itself in many forms – there won’t be a one size fit all silver bullet solution. Customised computing services and hybrid environments consisting of federated public and private clouds, will be required to support the differing needs and to meet the objectives of different businesses.

Mission-critical performance. Making the decision to move from in-house to a managed Data Center environment does not mean businesses have to suffer a degradation of service levels which put the business at risk. Cloud Computing services must provide equivalent if not improved availability, security and data security – only a business-grade computing service can deliver these requirements. Our focus remains on providing innovative customer solutions based on proven technology which reduces the operating risk of doing business online - consistent with our focus on providing the highest uptime for online businesses. The business-class version of cloud computing is the version we are working towards.

Tools to effectively manage the Cloud. You can only react to a situation if you have an indication of the current operating state – so the agility promised by Cloud Computing relies on having the tools to get up-to-date performance and status indicators for your services. InView, Macquarie Hosting’s real-time management portal, provides the management tools to interrogate and report on a range of parameters to ensure visibility, control and administration for individual customer services. We are set to continue this focus as we move toward Cloud Computing.

“Cloud-like” Agility Available Today

Today Macquarie Hosting already delivers mission-critical hosting solutions as part of our existing capabilities, which enables “cloud-like” flexibility and scalability for your business.Examples of these services are outlined here:

SaaS Software Incubator is a multi-tenant virtual infrastructure service that enables SaaS Software Providers, ISV’s (Independent Software Vendors), Application Developers and Application Designers to test, pilot and proof their new application initiatives in a simple and affordable manner to ensure success in Software as a Service offerings. This service allows multiple OS types and versions to be tested, enabling SaaS providers to achieve “cloud-like” agility and get to market faster, without the need for expensive upfront investments in hardware infrastructure.

Virtual Disaster Recovery provides an affordable end-to-end managed solution to provide further levels of availability for your mission critical online applications in the event of an unforeseen disaster striking your production infrastructure or facility. We achieve this by building a replica of your production environment on a virtual server















platform, located at an alternate interstate certified hosting facility. Complete with true Internet fail-over capability.

Private Hosting Environments deliver customised dedicated hosting solutions for mission-critical online applications. These flexible Enterprise Virtualisation solutions are housed in a purpose-built carrier grade data centre that integrates with our IP data, voice and mobile networks providing you with the scalability, security and proven processes to cost-effectively meet all your hosting requirements today and beyond. In other words, we have the capability to deliver Private “Cloud-like” environments today.

About Macquarie HostingA division of Macquarie Telecom; Macquarie Hosting is the Australian leader in mission-critical application hosting for companies who rely on their websites for their business. Macquarie Hosting owns and operates Australia’s most highly accredited Data Centre, the Intellicentre, and has the people and processes in place to provide the highest levels of security and uptime. Macquarie Hosting enables greater flexibility, agility and on-demand scalability for organisations to respond to spikes and increases in web-site performance.To find out more www.macquariehosting.com



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The Business perspective on Cloud Computing