The Advantages and Disadvantages of Cloud Computing

Transcription

1 Cloud Computing Promises and Pitfalls Lou Mazzucchelli Fellow, Business Technology Trends Council

2 Cloud Buzz 2010: 2

3 Cloud Security, Privacy, Risk Buzz 2010: 3

4 Cloud Buzz 2010: 2012: 251,000,000 results 4

5 Cloud Security, Privacy, Risk Buzz 2010: ,000,000 results 16x 65,800,000 results 313x 42,700,000 results 984x 45,800,000 results 808x 5

6 Audience Calibration 6

7 Audience Calibration 7

8 Audience Calibration 8

9 What is Cloud Computing? Outsourcing Utility computing Storage XaaS Grid computing 9

10 What is Cloud Computing? Swamp Outsourcing Utility computing Storage XaaS Grid computing Source: Juniper Networks 10

11 Cloud Computing Origins Joe VPN Jill 11

12 Cloud Computing Origins Joe Jill 12

13 Cloud Computing One Definition Applications hardware location hardware name hardware OS hardware size application name application version Network Storage Computers user service name 13

14 Claimed Cloud Computing Benefits - Lower cost - Increased capability - Increased agility 14

15 Drivers of Cloud Computing Cost Reduction - Outsourcing - Server consolidation - Virtualization - Open source - Low-cost client and server hardware 15

16 Utility Computing A Flawed Metaphor 16

17 Utility Computing A Flawed Metaphor 17

18 Utility Computing A Flawed Metaphor 18

19 Utility Computing A Flawed Metaphor PSTN 19

20 Utility Computing A Flawed Metaphor Internet 20

21 Utility Computing A Flawed Metaphor Internet cookies 21

22 Utility Computing A Flawed Metaphor Internet HTML5 db 22

23 Utility Computing A Flawed Metaphor Internet 23

24 Utility Computing A Flawed Metaphor 24

25 Where Has IT Strategic Asset Value Gone? 25

26 Where Has IT Strategic Asset Value Gone? Proprietary Servers 26

27 Where Has IT Strategic Asset Value Gone? Proprietary Servers - - Commodity Servers/Clusters - - Proprietary Clusters 27

28 Where Has IT Strategic Asset Value Gone? Proprietary Servers - - Commodity Servers/Clusters - - Proprietary Clusters Proprietary Applications 28

29 Where Has IT Strategic Asset Value Gone? Proprietary Servers - - Commodity Servers/Clusters - - Proprietary Clusters Proprietary Applications - - Applications Architecture - - Open Source 29

30 Where Has IT Strategic Asset Value Gone? Proprietary Servers - - Commodity Servers/Clusters - - Proprietary Clusters Proprietary Applications - - Applications Architecture - - Open Source Data 30

31 Where Has IT Strategic Asset Value Gone? Proprietary Servers - - Commodity Servers/Clusters - - Proprietary Clusters Proprietary Applications - - Web Applications - - Open Source Data 31

32 Data Risk Space Replication Distance 32

33 Simple Data Risk Space Replication Theft of Information and electronic data surpass all other frauds for the first time. Kroll Global Fraud Report 18 October Distance 33

34 Simple Data Risk Space Replication Kroll Global Fraud Report 2011/12 Distance 34

35 Simple Data Risk Space Replication Criminals have always targeted physical assets because they are present in almost all companies, are frequently simple to steal, and have a tangible value which makes them easy to convert to financial gain. The increasing prevalence of information technology has made the same attributes increasingly true of data. Kroll Global Fraud Report 18 October Distance 35

36 Simple Data Risk Space Replication lim t 8 data > cash Distance 36

37 Data: The (mostly) Invisible Asset Replication If data is not an asset, then it is treated as a cost. Since the natural reaction of business is to minimize costs, IT organizations are treated like cost centers with continuous pressures to reduce expenditures rather than looking for ways to increase the value and bottom-line earnings of the assets. Examples of valuable information assets include product research data, manufacturing cost data, geological data for energy reserves, and customer relationship, risk, and behavior models. Yet if this data is treated simply as a cost from a management perspective, it will not receive the appropriate level of attention from an investment perspective and will remain under-leveraged. - John Schmidt, Informatica and, under-protected. - me Distance 37

38 Sidebar: Data vs. Cash Replication / - Inflation + Compound Interest - Decay + Compound Queries Distance 38

39 Sidebar: Data vs. Cash Risk Replication / - Removal - Replication - Pollution Distance 39

40 Sidebar: Data vs. Cash Risk Replication / - Removal - Replication - Pollution THEFT Distance 40

41 Sidebar: Data vs. Cash Risk Replication / - Removal - Replication - Pollution THEFT N/A Distance 41

42 Sidebar: Data vs. Cash Risk Replication / - Removal - Replication - Pollution THEFT N/A COUNTERFEITING Distance 42

43 Sidebar: Data vs. Cash Risk Replication / - Removal - Replication - Pollution THEFT N/A COUNTERFEITING? Distance 43

44 Data Governance Concepts Emerging Data governance will become a regulatory requirement in an increasing number of countries and organizations. In some countries, organizations will have to demonstrate data governance practices to regulators as part of regular audits. This will likely affect the banking and financial services industries first, and will emerge as a growing trend worldwide. IBM Data Governance Council,

45 Data Governance Concepts Emerging The value of data will be treated as an asset on the balance sheet and reported by the Chief Financial Officer while the quality of data will become a technical reporting metric and key IT performance indicator. New accounting and reporting practices will emerge for measuring and assessing the value of data to help organizations demonstrate how data quality fuels business performance. IBM Data Governance Council,

46 Data Governance Concepts Emerging The role of the Chief Information Officer (CIO) will change, making this corporate officer responsible for reporting on data quality and risk to the Board of Directors. The CIO will have the mandate to govern the use of information and report on the quality of the information provided to shareholders. IBM Data Governance Council,

47 Accountants Need To Catch Up There is a difference in the accounting for purchased data and internally developed data. The definition of an asset and accounting standards related to data were reviewed herein, only to conclude that differences in how we account for data based on its genealogy is illogical and unnecessary. Internally developed data meets the definition of an asset. The value of data is relevant, and can be adequately measured. Therefore, the accounting profession should be willing to recognize internally developed data as an asset. As we move forward into the information age, data will become more important, not less important. measurement is a key to making progress in addressing many of those problems. Placing a value on data and reflecting it in a firm's balance sheet will contribute to management's capability to manage it. Measuring the value of data is a "doable" task, and one that begs attention now. Atkinson & McGauhey,

48 Simple Data Risk Space Replication US Department of Commerce US EU Safe Harbor Principles - Notice - Choice (opt out) - Onward Transfer (Transfers to Third Parties) - Access - Security - Data integrity - Enforcement Atlantic Ocean Distance 48

49 Google In The News Former FTC Employee Files Complaint Over Google Privacy WSJ Digits, October 7, calls on the agency to investigate Google and to compel Google to take proactive steps to protect the privacy of individual users search terms. - Google says its passing of search-query data to third parties is a standard practice across all search engines and that webmasters use this to see what searches bring visitors to their websites. - Claimant: I m not arguing that every time you click on a link on Google search results you re at risk of identity theft or that the person running the site knows who you are. What I m saying is that Google makes really strong claims about how they protect user data, and they aren t meeting those claims. 49

50 Going For It - Amazon Elastic Compute Cloud (EC2) - - Pay per instance/per hour - - Windows / Linux / Solaris Default (Small) Instance GB RAM virtual 32/64-bit core/1 compute unit GB Disk 50

51 EC2 Small Instance Pricing - On-Demand /hr /yr Linux / Unix Windows - US - VA - US - CA - EU - Ireland - APAC - Singapore $ $701 $0.115 $1007 $ $788 $0.125 $1095 $0.090 $0.090 $0.115 $0.115 Medium Utilization Reserved (Linux or Windows) 1-year 3-year $0.024 $0.019 $0.031 $160 $370 $432 $250 $250 $0.025 $355 /hr /yr $0.031 $0.025 $0.031 $

52 But Wait! There s More - AWS Free Usage Tier 750 hours of EC2 running Linux/Windows Micro instance usage 750 hours of Elastic Load Balancing plus 15GB data processing 30 GB of Amazon Elastic Block Storage (EBS) plus: 2 million IOs 1 GB snapshot storage, 10,000 / 1,000 snapshot get/put requests 15 GB of bandwidth in and out aggregated across all AWS services 1 GB of regional data transfer per month, for one year. 52

53 The Fine Print (emphasis mine) Data Privacy We participate in the safe harbor programs described in the Privacy Policy. You may specify the AWS regions in which Your Content will be stored and accessible by End Users. We will not move Your Content from your selected AWS regions without notifying you, unless required to comply with the law or requests of governmental entities. You consent to our collection, use and disclosure of information associated with the Service Offerings in accordance with our Privacy Policy, and to the processing of Your Content in, and the transfer of Your Content into, the AWS regions you select. 53

54 The Fine Print (emphasis mine) Termination. (a) Termination for Convenience. we may terminate this Agreement for any reason by providing you 30 days advance notice. (b) Termination for Cause.. (ii) By Us. We may also terminate this Agreement immediately upon notice to you (A) for cause, if any act or omission by you or any End User results in a suspension described in Section 6.1, (B) if our relationship with a third party partner who provides software or other technology we use to provide the Service Offerings expires, terminates or requires us to change the way we provide the software or other technology as part of the Services, (C) if we believe providing the Services could create a substantial economic or technical burden or material security risk for us, (D) in order to comply with the law or requests of governmental entities, or (E) if we determine use of the Service Offerings by you or any End Users or our provision of any of the Services to you or any End Users has become impractical or unfeasible for any legal or regulatory reason. 54

55 The Old Fine Print (emphasis mine) 7.2. Security. We strive to keep Your Content secure, but cannot guarantee that we will be successful at doing so, given the nature of the Internet. 55

56 The New Fine Print (emphasis mine) 3.1 AWS Security. Without limiting Section 10 or your obligations under Section 4.2, we will implement reasonable and appropriate measures designed to help you secure Your Content against accidental or unlawful loss, access or disclosure. 56

57 The New Fine Print (emphasis mine) 10. Disclaimers. THE SERVICE OFFERINGS ARE PROVIDED AS IS. WE AND OUR AFFILIATES AND LICENSORS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE REGARDING THE SERVICE OFFERINGS OR THE THIRD PARTY CONTENT, INCLUDING ANY WARRANTY THAT THE SERVICE OFFERINGS OR THIRD PARTY CONTENT WILL BE UNINTERRUPTED, ERROR FREE OR FREE OF HARMFUL COMPONENTS, OR THAT ANY CONTENT, INCLUDING YOUR CONTENT OR THE THIRD PARTY CONTENT, WILL BE SECURE OR NOT OTHERWISE LOST OR DAMAGED. EXCEPT TO THE EXTENT PROHIBITED BY LAW, WE AND OUR AFFILIATES DISCLAIM ALL WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR QUIET ENJOYMENT, AND ANY WARRANTIES ARISING OUT OF ANY COURSE OF DEALING OR USAGE OF TRADE. 11. Limitations of Liability. WE AND OUR AFFILIATES OR LICENSORS WILL NOT BE LIABLE TO YOU FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL OR EXEMPLARY DAMAGES (INCLUDING DAMAGES FOR LOSS OF PROFITS, GOODWILL, USE OR DATA), EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FURTHER, NEITHER WE NOR ANY OF OUR AFFILIATES OR LICENSORS WILL BE RESPONSIBLE FOR ANY COMPENSATION, REIMBURSEMENT, OR DAMAGES ARISING IN CONNECTION WITH: (A) YOUR INABILITY TO USE THE SERVICES, INCLUDING AS A RESULT OF ANY (I) TERMINATION OR SUSPENSION OF THIE AGREEMENT OR YOUR USE OF OR ACCESS TO THE SERVICE OFFERINGS, (II) OUR DISCONTINUATION OF ANY OR ALL OF THE SERVICE OFFERINGS, OR, (III) WITHOUT LIMITING ANY OBLIGATIONS UNDER THE SLAs, ANY UNANTICIPATED OR UNSCHEDULED DOWNTIME OF ALL OR A PORTION OF THE SERVICES FOR ANY REASON, INCLUDING AS A RESULT OF POWER OUTAGES, SYSTEM FAILURES OR OTHER INTERRUPTIONS; (B) THE COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES; (C) ANY INVESTMENTS, EXPENDITURES, OR COMMITMENTS BY YOU IN CONNECTION WITH THIS AGREEMENT OR YOUR USE OF OR ACCESS TO THE SERVICE OFFERINGS; OR (D) ANY UNAUTHORIZED ACCESS TO, ALTERATION OF, OR THE DELETION, DESTRUCTION, DAMAGE, LOSS OR FAILURE TO STORE ANY OF YOUR CONTENT OR OTHER DATA. IN ANY CASE, OUR AND OUR AFFILIATES AND LICENSORS AGGREGATE LIABILITY UNDER THIS AGREEMENT WILL BE LIMITED TO THE AMOUT YOU ACTUALLY PAY US UNDER THIS AGREEMENT FOR THE SERVICE THAT GAVE RISE TO THE CLAIM DURING THE 12 MONTHS PRECEDING THE CLAIM. 57

58 Expenses - Not Just The Cloud Hosting Costs Backup Costs 58

59 Expenses - Not Just The Cloud Hosting Costs Backup Costs 59

60 Expenses - Not Just The Cloud Hosting Costs Other Risk Mitigation Costs Backup Costs 60

61 and Just For Fun Hosting Costs IPv4 address Backup Costs 61

62 Tick, tick, tick Hosting Costs Backup Costs 62

63 and Just For Fun Hosting Costs Netflix Backup Costs 63

64 and Just For Fun Hosting Costs Netflix 32.7% of peak US Internet bandwidth, 8-10PM ~23M US subscribers Backup Costs 64

65 Drivers of Cloud Computing Cost Reduction - Outsourcing - Server consolidation - Virtualization - Open source - Low-cost client and server hardware 65

66 Cloud Computing and Outsourcing are Orthogonal Public Cloud Private Cloud user 66

67 Cloud Computing and Outsourcing are Orthogonal Public Cloud Hybrid Cloud Private Cloud user 67

68 Cloud Computing and Outsourcing are Orthogonal Public Cloud Hybrid Cloud Private Cloud user 68

69 How To Think About Cloud Computing - Applications and Cost 69

70 Summary: How To Think About Cloud Computing - Applications and Cost - Data Assets and Risk Management 70

71 Thanks For Listening Questions 71