Making Cloud Economics Work

Moving applications and infrastructure to the cloud can make a lot of sense for your company, but be prepared to make some changes to create an economic model that makes sense.  The traditional ways you have implemented solutions on terra firma may not fly in the cloud without some re-engineering.  It should not come as a big surprise that to get the most out of any new solution, it pays to take some time to understand the new solution, make sure it meets your needs, and then optimize around it.  Consider a few of these examples.

Amazon Elastic Compute Cloud or EC2, offers a wide range of IaaS and PaaS services.   No hardware to order, install, and maintain, no complicated HW maintenance plans to worry about, and all coupled with rapid setup and configuration.  With a little networking help to establish a secure network connection, EC2 can be quickly configured to provide a corporate private cloud to extend the capabilities of your data center.  So what is the down side?  Well cost can be a down side in some cases.  EC2, and the cloud in general, is all about leveraging massively scalable and shared infrastructure.  Your dollars will go much further if you consider a few of these non-traditional ways to leverage cloud infrastructure:

  • Turn on and turn off the instances in your environment. Why pay for servers 24/7, if you only need them running 8/5?  And why keep servers around at all if you are done with them?  The cloud provides this kind of flexibility and vendors like Automic can make this kind of on/off approach easy to manage – if you make the investment of some up front setup.
  • Reserve some instances when you know you will be using them for a while and save up to 75%. If you are worried that you might not need them in the future, check out the Amazon EC2 Reserved Instance Marketplace where you can sell un-needed capacity and buy it as well.  Similarly use Spot Instances for your short term projects.  Try to do that in a traditional data center!
  • Elastic Load Balancing may make sense in production environments to provide the flexibility to scale up and then scale down to meet seasonal demand and better manage costs.

Consider Microsoft Office 365, offering the ability to move your corporate email, user file storage, and content management to the cloud, while providing licenses and access to Office in the cloud or on the desktop.  Office 365 is really a feature packed cloud offering, but again a little re-engineering can provide big benefits:

  • Microsoft offers a range of options in licensing Office 365, starting with the basic E1 license providing email and office in the cloud only, all the way up to the E4 license providing full cloud and onsite access to the entire suite of office applications, SharePoint, file sharing and video conferencing services. E4 packs a lot of punch, but the cost difference is nearly 3X!  To achieve the best economics, carefully consider which employee groups can work effectively with basic E1 licenses and then scale up only as needed.
  • Maximize your licensing dollars by using everything you can! Office, Lync, SharePoint, file sharing, etc.  With 1GB of file storage and sharing per user, think of all of the SAN space ($$$) you can save if you move some of your storage to the cloud.  And Lync can take a big bite out of telecommunication costs, while boosting employee and external business partner collaboration – if you roll it out and get employees using it.

Finally, look for true cloud applications.  In my humble opinion there are true cloud solutions and sadly there are faux clouds as well, so buyer beware!  Faux clouds try to dress up like true clouds, but upon inspection are really just old school traditional applications and infrastructure, hosted in a remote data center.  That’s not cloud, it’s 90’s style hosting and can end up costing a lot more with few of the benefits.  True clouds offer:

  • Massively scaled multi-tenant solutions
  • Flexible, scalable, and agile, applications and infrastructure
  • Pay as you go, pay as you use, without long-term and restrictive telecom style contracts
  • Rich web service integration capabilities
  • Configurability and customization that is forward and backward compatible, allowing cloud upgrades to occur almost without notice

Navigating in the cloud can be a little tricky, although the offerings are rapidly maturing.  The folks at 451 Research provide some interesting benchmark data to help shed some light on how to cut through the hype with their “Cloud Price Index” that I recommend checking out.  If you have any insights into maximizing your cloud investment, please share?


On-Premises versus Cloud Infographic

A few weeks ago I found an infographic showing how the use of Cloud Computing can provide advantages over the traditional on-premise data center and it got me thinking.  While Cloud Computing is certainly not the answer for everyone and not the answer for all computational use cases, every day the cloud continues to evolve into a stronger and more compelling business case.  I would compare the evolution of cloud computing to similar transformations like the move from mainframes to open systems or the move from physical infrastructure to virtual, with each successive transformation moving fast than the last.  Thanks Gordon Moore!

While I liked the infographic I found, I also felt it was not complete and didn’t tell enough of the story, so I decided to create my own below.  Click on the image to see the full sized PDF.  Now help me out with your feedback.  How would you change this infographic to help tell a more complete story?  Any negatives or watch-outs?

Cloud Iceberg