2010 White Paper Series. Build or Host? An Executive Summary on DaaS (Datacenter as a Service)

Transcription

1 2010 White Paper Series Build or Host? An Executive Summary on DaaS (Datacenter as a Service)

2 Table of Contents Introduction... 3 Advantages of DaaS... 3 Environmental Superiority... 3 Financial Savings... 3 Server Reliability... 4 Desktop Virtualization... 4 Server Administration... 4 Scale... 4 Summary of Benefits... 4 Disadvantages and Barriers to success... 5 Security... 5 Flexibility... 5 Legal... 5 Extraction... 6 Bandwidth... 6 Summary of disadvantage and barriers to success:... 6 Solution Maturity & Future Issues... 6 Comparing Costs... 7 Table One, Build versus DaaS... 8 Author s Opinion & Concluding Remarks... 8 References designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 2

3 Introduction Should you build your own datacenter in house, or outsource the hosting and maintenance to a third party provider? Advances in telecommunications have paved the way for a hosted datacenter model. As a result, organizations large and small have alternatives to the traditional in house datacenter. The information technology industry has rapidly embraced the concept of Datacenter as a Service, or DaaS. DaaS is the use of a third-party to provide datacenter infrastructure, server resources, and server administration as part of a pay as you consume outsourced model. Such outsourcers eliminate the significant upfront expense of a datacenter build, replacing it with an ongoing service fee. The purpose of this whitepaper is to provide an executive summary on both the benefits and issues associated with a DaaS service offering. Advantages of DaaS The DaaS business model is simple. Large datacenters defray the costs of the build and ongoing maintenance over a large customer base. Utilizing third-party datacenters is not a brand new alternative. Beginning in the late 1990 s, many companies began to leverage datacenters to host critical outward facing systems, such as websites, in such facilities. Environmental Superiority The business case for hosting these systems has revolved around the environmental superiority of datacenter facilities. They typically have divergent power sources, battery and generator stand-by electricity, redundant air handlers, and scalable multi-carrier internet access. An organization could offload this public facing component with reasonable assurances of better availability than an in-house deployment. Until recently, two major hurdles prevented an organization from deploying internal systems to third party datacenters: cost and bandwidth. As the industry has matured, we have largely overcome these roadblocks. High-speed bandwidth, including private office to datacenter connectivity, allows end-user systems to communicate with an external datacenter without any discernable latency. Further, datacenters have turned to virtualization technology to vastly improve the efficiency of server systems. As a result, the overall cost of the solution has decreased to the point where wide-spread adoption is possible. The research group Gartner predicts that, by 2012, one in five businesses will not own IT assets (Saran, The IT department of tomorrow will be radically different., 2010). Financial Savings Especially in the current economic environment, many organizations will turn to datacenter services for cash flow savings. Companies replace huge capital expense (and a depreciating asset) with an operating expense. This might have positive tax consequences. Further, the costs associated with replacing obsolete equipment is borne by the provider. Instead of periodic spikes in equipment purchases, the company pays a steady monthly fee. Fluctuations occur as we consume additional, or eliminate, datacenter resources designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 3

4 Server Reliability Server reliability is another critical benefit. Beyond the environmental gains of power, cooling, and connectivity, it is likely that a provider hosts systems on superior server hardware. Enterprise systems running datacenter software such as VMware s vsphere 4 allow servers to run on multiple physical server systems simultaneously. If one server fails, counterparts in the server resource pool pick up the workload for the failed device (VMware Server & Datacenter Virtualization Products, 2009). Desktop Virtualization Virtualization provides other developing benefits which extend to the end user desktop system. Workstations now virtualize to the datacenter as well. The desktop computer becomes little more than a dumb terminal. The overwhelming bulk of the data processing occurs within the datacenter server systems, leaving the computer with the simple task of displaying the remote computing session. This has substantial cost savings over traditional desktop replacement schedules, as the system lifespan increases by many years. Maritta Horne, Chief Information Officer of a school system in Kentucky, explains the benefits of desktop virtualization. We had so many machines that basically were dead in the corner, but the cloud let them work again. I have Windows 95 operating systems working as if they were Windows Vista (McGarvey, 2010). Server Administration Finally, the ongoing maintenance of servers is typically expensive. Salaries of network administrators are a significant component of an organization s technology operations budget. DaaS completely eliminates this expense, as it is inclusive in the service fee. These internal resources might be eliminated, or repurposed to another task of higher value for the organization. Gartner sees traditional corporate technology tasks replaced with new business-focused roles such as Litigation Support manager, Enterprise Information Architect, and Digital Archivist (Saran, The IT department of tomorrow will be radically different., 2010). Scale DaaS scales more easily than a premise-based solution. The implementation of a new system occurs quickly, and without the typically long procurement and build process. Additionally, capacity issues are borne by the provider. The customer no longer worries about forklift upgrades, or running out of resources. Summary of Benefits 1. A better physical environment: redundant power, cooling, and high-speed connectivity. 2. Cash flow savings: monthly service fees based on consumption in lieu of significant build expense. 3. Server reliability: Virtualized clusters fail-over real-time, which substantially decreases unscheduled downtime designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 4

5 4. Desktop virtualization: Extend the lifecycle of workstations in the operating environment. 5. Server Administration: This expense is inclusive in the DaaS model. Repurpose this asset to higher value technology activities. 6. Scale: Grow into additional computing resources without incurring upfront fees, and absent growth pains such as forklift upgrades of technology that no longer has the requisite capacity. Disadvantages and Barriers to success Experts in the DaaS paradigm focus on five barriers to project success. This section of the paper outlines these five potential problems with a DaaS implementation. Security The outsourcing of your server environment squarely places your network security in the hands of the provider. Flinders of Computer Weekly indicates that larger companies are concerned with access to their data Trusting a supplier with business-critical data has been a step too far for many large companies. Businesses have been rightly afraid that their data might fall into the wrong hands if they lose control of security (Flinders, 2010). Flinder does point out that many large providers are moving to industry recognized security methodologies such as ISO, which has reassured many potential customers. Security is so important in the industry, that this White House is involved. According to Ashford of Computer Weekly, Obama-appointed Cybersecurity Czar Howard Schmidt is formulating a plan on how best to ensure cloud-based computing is secure (Ashford, 2010). Flexibility Many DaaS models are stringent on configuration options. Scale makes their business models work, and custom configurations complicate that process. For instance, many carriers focus completed on x86 (Intel) architectures. An organization with a substantial investment in incompatible systems might limit what they can outsource to a DaaS provider. Other customerspecific technologies might be difficult to replicate in a hosted model as well. Everything from load balancers, to content scanning, and specific security sign-on protocols must be deployed again in the hosted model. Legal Compliance issues hinder many possible DaaS migrations. For instance, a SAS70 audit is very difficult to accomplish in a hosted datacenter environment. Perkins of ComputerWorld also cautions that European privacy laws prohibit certain data from crossing borders (Perkins, 2010). In a DaaS hosting model, providers typically replicate data wholesale to divergent carriers for redundancy, which might violate European law. Nash of CIO.com also raises the risk of e-discovery requirements for litigation. Nash proposes the question, Will the vendor help meet data requests in the face of lawsuits, compliance audits, data breaches and other legal 2010 designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 5

6 Situations? (Nash, 2010). These are not trivial concerns. The court system fines parties for untimely delivery of information under subpoena. Nash recommends that potential DaaS customers require their provider to commit to specific service levels in fulfilling data requests (Nash, 2010). Extraction Perkins of Computerworld cautions on the complexity of leaving a DaaS provider, should that need to occur. Cloud providers make it easy to upload data. Unfortunately, each provider uses proprietary data definitions and data structures. In addition, they offer no simple tools for downloading bulk data (Perkins, 2010). Additionally, the amount of bandwidth required to effectively move your data from the provider back to the customer facility might not operate quickly enough. Perkins provides an example: At 100Mbit per second, it takes two days to export 5 terabytes (TB) of data (Perkins, 2010). An advisable strategy might include an extraction clause in your contract, where the provider agrees to certain services to assist in the return, and subsequent destruction, of your data. Bandwidth Most metropolitan areas have high-speed options which lend themselves to a DaaS model. A potential issue in the DaaS model is the reliance and importance of the connection between the customer premises and the hosting facility. If the connection fails, and a backup connection is not in place, the entire system becomes unavailable. Circuit redundancy is ideal, yet expensive. Many organizations elect to leverage a less expensive internet connection, secured by virtual private network (VPN) encryption, and a secondary method of access. Summary of disadvantage and barriers to success: 1. Security Issues: Is your data secure in the hands of a DaaS provider? What policies and procedures are in place to protect your informational assets? 2. Flexibility: Make sure your computing platform and requirements fit well within the parameters of the DaaS solution. If they do not, this may not be the solution for you. 3. Legal: Compliance issues and litigation requirements are an important aspect in the decision making process. 4. Extraction: It is difficult to migrate your systems back in-house, or to an alternative provider? Negotiate your contract to include disentanglement services in the event this becomes necessary. 5. Bandwidth: This is a critical potential single point of failure in DaaS. If budget allows, consider a secondary circuit to a separate carrier. At a minimum, leverage an internet connection, secured by VPN, as a secondary point of access. Solution Maturity & Future Issues While some might consider DaaS a relatively new technology, I disagree. As mentioned earlier in this document, hosting is an extremely mature industry. DaaS is an extension of hosting, with 2010 designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 6

7 many commonalities. Further, many of the major technology companies have adopted DaaS as a core product. Microsoft, Google, Amazon and others all have substantial investments in this business. One future issue of DaaS is the long-term strategy of the provider. As Perkins points out, companies have a substantial investment in these systems, and they need to generate a profit. He advises caution on the total costs, including hidden costs of a provider s model. Do a comprehensive financial analysis before committing says Perkins (Perkins, 2010). One might also draw an analogy with the telecom industry and future consolidation and possible monopolistic practices. The future of the industry might point to a very few players controlling a large portion of the landscape of the solution. Comparing Costs Unfortunately, comparing costs between these two paradigms is complicated. The costs associated with the traditional datacenter build project, and subsequent maintenance, contain the following three categories: 1. The datacenter: This includes the buildout of the space, power, and cooling. Lifespan of approximately ten years. 2. The server infrastructure: This includes the servers and supporting network infrastructure. Lifespan of approximately four years. 3. The people: The network team tasked with maintaining the server infrastructure, network components, and datacenter itself. Ongoing Expense Each of these categories carries a different lifespan. You pay your people a salary every year, whereas the datacenter infrastructure lasts much longer. Accordingly, to build a cost-per-year to compare with a DaaS monthly service fee, we build a model which takes the lifespan of the equipment into account. For the purposes of this whitepaper, I have assigned a lifespan schedule consistent with the industry. The example below is a simplified example of how to compute the overall costs associated with building a datacenter to support one hundred x86 servers, versus a DaaS model providing these servers on a monthly basis designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 7

8 Table One, Build versus DaaS ITEM COST DISTRIBUTE OVER ENVIRONMENT 1 DATA CENTER (SPACE / AC / POWER) $ 700, YEARS 2 REDUNDANT POWER $ 150,000 3 BATTERY BACKUP $ 100,000 4 GENERATOR $ 150,000 TOTAL COST $ 1,100,000 $ 110,000 / YEAR EQUIPMENT 5 QTY X86 REDUNDANT SERVERS $ 800,000 3 YEARS 6 NETWORK INFRASTRUCTURE $ 300,000 TOTAL COST $ 1,100,000 $ 366,667 / YEAR STAFF 7 THREE NETWORK ENGINEERS $ 300,000 1 YEAR ONE COMMUNICATIONS ENGINEER $ 100,000 TOTAL COST $ 400,000 $ 400,000 / YEAR TOTAL DISTRIBUTED COST TO BUILD $ 876,667 YEAR ITEM COST DISTRIBUTE OVER 8 DaaS MONTHLY $500 / SERVER - MANAGED $ 50,000 $ 600,000 / YEAR 500 X 100 = $50,000 / MONTH / MONTH TOTAL COST ON DaaS $ 600,000 / YEAR NET SAVINGS PER YEAR $ 276,667 Author s Opinion & Concluding Remarks DaaS offers many benefits over a traditional datacenter build, yet this solution is not appropriate for every organization. The author cautions the reader to review the summary of disadvantages associated with a hosted DaaS model. The flexibility associated with owning a datacenter is a direct trade-off to a fixed monthly recurring pricing model, ease of ownership, outsourced maintenance, and simplified scale. If the advantages outweigh the possible consequences, DaaS makes good business sense. Accordingly, this is very much a business decision, not a technology one. In either scenario, the computing solution is the same. The difference is in the platform and methodology in providing these services designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 8

9 In conclusion, the industry is quickly adopting DaaS. Technology is a key differentiator in how your business delivers services to customers. Information Technology is a substantial expense for most organizations, and usually ranks in the top four expense line items overall. DaaS, in a small one hundred server environment, stands to save an organization $267,000 per year, a substantial return on investment. Further, the cost of DaaS will only decrease as adoption increases, and the companies that elect to leverage this platform might have a cost advantage over competitors that do not designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 9

10 References Ashford, W. (2010). US national cyber security co-ordinator Howard Schmidt is formulating a plan on how best to ensure cloud-based computing is secure. Computer Weekly, 70. Flinders, K. (2010). Barriers to the take-up of cloud computing by enterprises are falling. Computer Weekly,, 17. McGarvey, R. (2010). You want me to what? The Journal, 37(2), Nash, K. (2010). Legal Quandaries in the Cloud. CIO, 23(7), Perkins, B. (2010). Cloudy, With a Chance of Trouble. Computerworld, 44(3), 26. Saran, C. (2010). The IT department of tomorrow will be radically different. Computer Weekly, 45. VMware Server & Datacenter Virtualization Products. (2009, December). Retrieved December 2009, from VMware: designdata, INC. NOT FOR REPRINT OR COMMERCIAL USE PAGE 10