Cloud Computing. Introduction. Prasanna Pachwadkar Business Analysis and Incubation Cell. Sunil Joglekar Product and Technology Initiatives

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1 Introduction Endeavors to optimize efficiency of IT organization has come a long way in the last few decades. From initial arena of Mainframes and its time sharing model to the PCs with volumes of comparatively less expensive computing servers to Application Service Provider (ASP) reducing the operational cost to service-focused models of SaaS and SOA providing reusability, economies of scale. The latest trend in this evolution is Cloud Computing, promising to revolutionalize the world of computing. Gartner recently commented, Worldwide software spending is on pace for the strongest growth rate in 2008 at more than 10. However, the replacement of systems does not automatically equate to new software market growth. SaaS/Cloud Computing, SOA/Web 2.0, and open source software are causing huge changes to the software market. Many of these factors are impacting market growth as enterprises replace assets with per-use services." This article attempts to understand the substance behind this hype with a discussion on what is Cloud Computing, players in this space, and probable ways this new trend could take shape. By Prasanna Pachwadkar Business Analysis and Incubation Cell Sunil Joglekar Product and Technology Initiatives Origin of the term The term cloud is not at all new to the computing community. For many years, cloud is being used as a symbol in typical network diagrams to refer to the internet or the components of the network which are managed outside the environment of any IT organization. Even though Cloud Computing has started taking shape in very recent years; few people like John McCarthy, the revolutionary computer scientist had envisioned this future while commenting that "computation may someday be organized as a public utility". What it is? Wikipedia defines the term as a style of computing where IT-related capabilities are provided as a service, allowing users to access technology-enabled services "in the cloud" without knowledge of, expertise with, or control over the technology infrastructure that supports them. As per Forrester, Cloud Computing is a pool of highly scalable, abstracted infrastructure, capable of hosting end-customer applications, that is billed by consumption. Gartner defines Cloud Computing as "a style of computing where massively scalable IT-enabled capabilities are delivered 'as a service' to external customers using Internet technologies."

2 So, in essence, Cloud Computing should be capable of providing the end-user, services for each component of end-to-end application lifecycle, Available over the internet, Using pay-as-you-go payment model, Highly flexible for user-specific requirements, Highly scalable to adjust rise or fall in user s demand of resources, Without having any huge IT infrastructure Evolution of Cloud Computing More than two decades ago Sun envisaged the network is the computer. But, it was not until recent post-dotcom burst period that this vision started taking shape. Innovate to Survive The companies like Google, Hotmail and Yahoo sustained through the dotcom burst. They began innovating further to attract more number of users. Cloud Computing has its roots in the strategies adopted by these internet giants. Most of these internet companies would face unpredictable demand due to the very nature of their operations. Also, these companies would need to respond to strong fluctuations in the demand due to factors such as seasonality. These vendors needed to ensure optimum response time even at the highest hit-rate. To achieve this, these vendors went on expanding their infrastructural capacity. But, this expansion would obviously be constrained by capital availability and would need to optimize utilization of the infrastructure during high and low demand periods. Virtualization of the physical computing capacity was the answer. Through virtualization, it was feasible to effectively manage the fluctuations in demand while keeping the capital expenditure in control. Generalize to Proliferate In the Internet era, it is taking much lesser time for the generalization of an innovation. In early days of computing evolution, technology companies such as IBM used to provide newer technologies, secure its intellectual property rights and sell it at a premium. On the contrary, many of the innovative technology approaches in the recent times have come from the business enterprises such as Google and Amazon who have innovated technologies for their business use. And as soon as they would be successful, they would bundle it and would make it available to the other users at an affordable price. 1

3 Once these internet evangelists were successful in managing a flexible, scalable and optimized infrastructure for their own businesses, they started looking at other ways to further optimize the resources. Services was already the buzzword in the IT industry. Taking the hint, these companies started carving out reusable and generic components of their application infrastructure and began offering those as services in the cloud i.e. over the internet. Amazon AWS could be seen as one prominent example of this evolution as well as leader of today s Cloud Computing market place. Categories of Cloud Computing Services Cloud Computing services are continuously evolving and so are the categories. As it stands today, Cloud Computing services could be grouped in following broad categories. Cloud Application Provisioning Services Vendors in this category, typically known as SaaS (Software-as-a-Service) vendors, mostly focus on provisioning niche business applications. Client Relationship Management (Salesforce), HRM (Taleo), Spend Management (Ariba) and Productivity 2

4 (Webex) are the prominent areas where the vendors are offering solutions. Some players have even started offering BPM (Appian) and (NetSuite, SAP) ERP in services model. Cloud Application Development Services These vendors are a step ahead in terms of extent of their services as compared to the earlier category. These vendors mostly offer a development platform allowing users to develop their own piece of applications on these platforms. These platform service vendors, typically called as PaaS (Platform as a Service) vendors could be allowing hosting these platforms on their own infrastructure or through another category of Cloud Computing vendors focused on hosting and deployment services. Many of the players in this category have been originated from a successful SaaS product such as Salesforce which was used to carve out underlying platform for use of the partner community. Companies like Salesforce would allow partners to build add-on applications integrated with their central CRM product and also hosted on their own platform for a premium. Other players in this category are BungeeLabs, Etelos, CogHead, Google AppEngine and Oracle SaaS Platform. Cloud Application Deployment and Hosting Services Vendors such as Amazon, IBM could be placed in this category. These vendors focus on either providing infrastructure for deploying an application environment, hosting of the application, or even just storage of data. For example, Amazon AWS provides "raw" compute resources via EC2 and higher level services such as S3 (Storage), SQS (Queue-based messaging), and SimpleDB (stores datasets, execute queries). User can configure the raw compute resources (EC2) as per requirements, using the OS of choice and write applications in any language and framework. Those applications may or may not rely upon additional AWS services such as S3, SQS, and SimpleDB. IBM Blue Cloud somewhat different strategy in terms of Cloud computing services. It focuses on Cloud Computing within firewalls of an enterprise. IBM Blue Cloud could link together enterprise computers to allow corporate data centers to operate more like the Internet or cloud. So, large enterprises could get Cloud Computing services using this internal cloud. Other vendors in this category are Joyent, GoGrid, and SunGrid. Some vendors such as OpSource, JamCracker and RackSpace focus only on hosting services whereas another subcategory of vendors focuses only on deployment services. These vendors specializes in packaging and virtualization format solutions for provisioning applications into a cloud (RPath, VMWare) or provide solutions focused on the coordination of many virtual appliances (app, DB, network) in the cloud to form a full deployment (3Tera AppLogic). 3

5 Cloud Application Management Services Vendors in this category are niche vendors providing specialized services for the ISVs in Cloud Computing services market. These services cover solutions that provide metering, billing, pricing, and contract management (Aria, Amazon DevPay, Zuora) to help charge for use of a system. Another set of vendors are also catering to the identity management and security related requirements (Ping Identity) of Cloud Computing vendors. Essential characteristics of Cloud Computing Cloud Computing service vendors need to be: Agile in Response to Optimize of its Massive Infrastructure Cloud Computing services need to be available on-demand. The fluctuations in the demand are difficult to predict. Hence, Cloud Computing services need to be agile to respond this unpredictable demand using various virtualization and hardware load balancing technologies. Generic in Configuration to Address Broader Set of User Requirements The technical requirements from different users could vary significantly in terms of OS, language, environment, database, and storage size. Cloud Computing service vendor would need to configure the off-the-shelves resources such that they could be readily used for almost any kind of project requirements. Vendors such as Amazon AWS and IBM are significantly progressing in this direction whereas companies such as Google with its Google AppEngine seem to be restricting users to use Python and BigTable, at least as of present. These restricted configurations may not fit requirements of some of the users. Also, if vendors allow only proprietary languages, it may be perceived as a lock-in strategy and may discourage users. Standard in Offerings to Achieve Economies of Scale Cloud Computing services would also need to build standardized set of computing resources so as to achieve economies of scale by reducing number of variants in the offerings. It would also enable users to estimate their requirements from time to time and only subscribe to the right amount of computing capacity. 4

6 Cloud Computing Adoption Cloud Computing services promise to provide reliable, scalable and economical computing capacity on demand. Today, an ISV could build a business application for provisioning in the cloud using the BungeeLabs application development services in the cloud with underlying application deployment and hosting services in the cloud from Amazon AWS. Apart from smaller ISVs, IT departments of enterprises could very well use Cloud Computing services. Unlike the traditional licensed, in-house IT, for Cloud Computing services, IT departments do not need to invest heavily in new IT infrastructure just for a pilot project. Also, some projects would experience temporary surges in need of computing capacity where purchasing additional IT infrastructure would not prove economical. Fetching Cloud Computing services as and when required could be much cost-effective and timely solution. New York Times Co. and the Nasdaq stock exchange are prominent examples of successful fulfillment of these promises. These organizations have adopted Amazon AWS Cloud Computing services for business critical areas. CASE STUDY: THE NEW YORK TIMES Nature of Project: Temporary but data-intensive project Objective: To convert 11 million articles published from the newspaper's founding in 1851 through 1989, to make them available through its Web site search engine Infrastructure Requirements: Data storage and data conversion required massive 4TB space and huge computing capacity. Approach: Huge investments in the infrastructure were not justifiable. Decided to use Amazon AWS services. Scanned in the stories, then uploaded those to S3, taking 4TB of space Using Amazon.com's EC2 computing platform, a PDF conversion application was run that converted that 4TB of TIFF data into 1.5TB of PDF files. Using 100 Linux computers, the job took about 24 hours, costing around $240. Using existing infrastructure at the company, it would have taken a month. No prior coordination with Amazon: IT department just signed up for the service on the Web using a credit card then began uploading the data. 5

7 CASE STUDY: NASDAQ Nature of Project: A continuous computing requirement with highly unpredictable load Objective: To offer the exchange's customers the ability to look back at historical trading data and dissect the information millisecond by millisecond. Infrastructure Requirements: The project would be generating 100,000 flat files per day along with several million flat files of the initial data. Huge storage and computing capacity was required to host the massive data on the internet and to provide effective service at the peak load Approach: Heavy upfront investments in the infrastructure were not justifiable. Decided to use Amazon AWS services. Using Amazon's S3 service to host the data Also created a lightweight reader application using Adobe's AIR technology so as to enable users to extract the required data. Using existing data created flat files for every entity, each holding enough data for a 10-minute replay of the stock's or fund's price changes, on a second-by-second basis. The Adobe AIR application pulls in the flat files stored at Amazon.com and then creates the replay animations from them. Hence, not necessary to constantly staging data on the server side. Need to worry about the surge in demand in the future as additional Cloud Computing resources could be obtained from Amazon as and when required. Along with these major enterprises, even small ISVs and innovators are also making effective use of Cloud Computing services for launching their business/ consumer applications. In fact, these applications could not have been feasible to launch and successfully run if it was not for Cloud Computing services. CASE STUDY: RENKOO Nature of Project: A continuous computing requirement with highly unpredictable load Objective: To offer innovative solutions such as Haikoo Zoo and Booze Main to the Facebook community of millions of technologysavvy users Infrastructure Requirements: Heavy computing capacity was required to provide effective service at the peak load. Approach: Significant upfront investment was not justifiable for this small company. Decided to use Amazon AWS services. Using Amazon's EC2 service to support a million or so Facebook users. Proved to be economical - average $100/ day for these computing services Instant scalability makes the approach successful 6

8 Potential Business Benefits Based on the examples seen so far, the primary benefits of Cloud Computing can be expressed in just a single phrase Making things economical in terms of time, resources and money! Time Rapid SDLC Turnaround time Resources Scalability Utilization Business Agility Money CapEx OpEx User organizations could achieve agility in responding to external as well as internal environmental changes through following benefits of Cloud Computing services. Rapid SDLC (Software Development Life Cycle) Cloud Computing service providers could provide ready to use infrastructural resources, development environments as well as reusable application components. In contrast, in traditional development cycle, each organization needs to design and build these pieces from scratch which accounts for significant portion of SDLC. Using Cloud Computing services, user organizations could target to reduce this cycle time. Quick Turnaround User organizations could design architecture of their IT systems in such a way that they could run processing on parallel computing resources Cloud Computing service providers. Rapid provisioning and de-provisioning of Cloud Computing resources thus assures increase in productivity and reduction in turnaround time. High Scalability (Upwards as well as downwards) In traditional model, the purchase of any new IT infrastructure needs to be justified in terms of its long-run usage. Cloud Computing promises to provide highly scalable IT resources, where scalability could be upwards as well as downwards. In many cases, it would reduce the deployment time significantly. Increased Utilization Cloud Computing service providers aggregates the demand from various user organizations so as to dynamically allocate the computing resources using 7

9 technologies such as server virtualization. This results in to far better resource utilization when compared with utilization of in-house IT infrastructure. This high utilization coupled with economies of scale, could enable service providers to provide Cloud Computing services in much economical ways. Reduction in Cost CapEx In traditional software development life cycle, any new IT system has significant budgetary constraints. These constraints could be in the form of capital expenses such as in-house infrastructure and heavy licensing charges. The organizations need to make these capital investments even before deploying the system in practice and start realizing the benefits. Cloud Computing promises to relieve organizations from major part of such capital expenses. By removing this major constraint in the initiation phase, IT systems could be deployed much faster to realize the benefits of the same. Reduction in Cost OpEx In Cloud Computing, IT infrastructure and other basic components of IT architecture are taken care of by the service vendors. In traditional IT systems, related on-going maintenance and enhancement activities amount to substantial operative expenses. In Cloud Computing, the user organizations need not worry about such expenses and would only need to pay based on the actual usage of the services. Unlike traditional model, user organizations would not need to bear the cost of IT infrastructure even when it is idle. They can just switch it off. Our Take Cloud Computing is a sun-rise area of technology. Besides, Cloud Computing includes many pieces such as computing, storage, messaging, integration et al. The full benefits would be realized as further progress is made. Multiple new vendors as well as existing internet/ enterprise giants are eyeing for a strong foothold in this market. Looking at the investments being made by leaders such as IBM, Google and Amazon, it is quite evident that the adoption of Cloud Computing is on the rising trend. Though, the market is very much nascent at this stage. Various vendors as well as analysts are trying to define the shape and size of this market in multiple ways. Market-maps are getting modified with the enhancements of the existing products/ technologies as well as new addition of vendors. This hyped enthusiasm is creating contradictory, confusing folksonomy. Lack of standards, issues related to data ownership and compliance would need to be addressed with innovative approaches. It would be some time until the Cloud Computing market gets better defined, players get well positioned and the potential issues get appropriately addressed. Cloud Computing is changing the way IT industry would operate. It could open up various possibilities as well as new set of challenges for user organizations as well as 8

10 IT service providers. User organizations are already set in the exploration mode. They could increasingly ask for Cloud Computing services like Amazon AWS as against investing heavily in the in-house infrastructure. IT service providers need to build competencies to be able to build or deploy applications in the cloud on such platforms. Developing, deploying and maintaining the business application outside the four walls of an enterprise could lead to new service offerings in system integration domain. Patni has already begun researching and experimentations in Cloud Computing space, along with few PoCs (proof of concept). Patni would also be evaluating the market on an ongoing basis as the Cloud Computing evolves in days to come. References Understanding the Cloud Computing/ SaaS/ PaaS markets - Peter Laird, Oracle (BEA) A Short Introduction to Cloud Platforms - David Chappell & Associates Software + Services in the Microsoft World - David Chappell & Associates Cloud Nine- Specification for a Cloud Computer: David Young, Joyeur Is Cloud Computing Viable For Enterprise IT? - James Staten, Forrester Research Emerging Platform Wars in Enterprise Software - Abhijit Dubey, McKinsey & Co 9

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