|By Chris Fleck||
|December 5, 2008 10:00 AM EST||
Chris Fleck's Blog
As described in part 1 of this blog series, the cloud is not the answer for every enterprise or every workload. This is true based on the current economics even without considering additional factors like security, control and SLA's. On the other hand the economics do point out a major cloud advantage when it comes to short term or variable workloads. (Pointed out by Michael Keen and Billy Marshall as well).
Perhaps this is not very surprising to many, but it does help to look at the numbers to put it in perspective. The largest Intrinsic cost advantage of the Cloud is the ability to share infrastructure among multiple customers ( i.e. Multi-Tenancy and/or Multi-Instance ). This comes into play when many customers have variable workloads that are not likely to overlay at the same time. A Cloud infrastructure can load balance this workload on-demand significantly reducing the cumulative infrastructure required to support N number of customer workloads.
A Premise only solution will typically deploy the infrastructure required to accommodate the anticipated peak demand plus a factor of safety. As a result excess capacity is built into every deployment even if it is rarely ( or never ) utilized. This formula gets very expensive for many scenarios such as implementing a redundant DR solution across multiple data centers or a retailer building infrastructure to accommodate the Christmas shopping season but paying for it all year. As noted in the Cloud 101 example however, when a premise based is well utilized it can be the most cost effective solution to stay with especially if the on-site facilities can accommodate the anticipated growth.
The following Premise Plus Cloud scenario provides an optimized view of where a fully utilized premise infrastructure is used for constant predictable workloads and the Cloud is used for the variable workload. To put some simple numbers to it based on the original example, let's assume that the constant workload is roughly equal to 5 Quadcore server capacity. The variable workload on the other hand peaks at 160% of the base requirement, however it is required only about 400 hours per year, which could translate to 12 hours a day for the month of December or 33 hours per month for peak loads such as test or batch loads.
The cost for a premise only solution for this situation comes to roughly 2X or $ 15,600 per year assuming existing space and a 20% factor of safety above peak load. If on the other hand you were able to utilize a Cloud for only the peak loads the incremental cost would be only $1,000. ( Based on Amazon EC2 )
|$ 15,600||Annual cost ( 2 x 7,800 from Part 1 )|
|Premise Plus Cloud|
|$ 7,800||Annual cost from Part 1|
|$ 1,000||Cloud EC2 - ( 400 x .8 x 3 )|
|$ 8,800||Annual Cost Premise Plus Cloud|
As noted for this example the server cost of using a Premise Plus Cloud solution could save as much as 44%. This does not factor in many costs that either the Premise only scenario or Premise Plus Cloud would face but those costs vary according to the situation. So the challenge is how to identify variable workloads that can be placed in the Cloud or split between premise and cloud.
The CSP ( Cloud Service Provider ) must also provide the proper infrastructure and remote administration to enable corporate IT to control and manage applications and images in the extended cloud as a virtual private network of their own. Economics aside, the CSP also needs to address the SLA's and security concerns that corporate IT has identified as prerequisites for adoption. Given the intrinsic cost savings possible as portrayed in this example, there is little doubt that CSP's will fill the gaps and the industry will move to Premise Plus Cloud solutions.
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Nov. 26, 2015 12:00 PM EST Reads: 143
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Nov. 26, 2015 11:00 AM EST Reads: 440
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Nov. 26, 2015 10:00 AM EST Reads: 282
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Nov. 26, 2015 09:45 AM EST Reads: 363
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
Nov. 26, 2015 09:30 AM EST Reads: 370
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Nov. 26, 2015 09:00 AM EST Reads: 474
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Nov. 26, 2015 08:45 AM EST Reads: 263
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Nov. 26, 2015 06:45 AM EST Reads: 398
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessions, I wanted to share some of my observations on emerging trends. As cyber security serves as a fou...
Nov. 26, 2015 06:15 AM EST Reads: 300
Continuous processes around the development and deployment of applications are both impacted by -- and a benefit to -- the Internet of Things trend. To help better understand the relationship between DevOps and a plethora of new end-devices and data please welcome Gary Gruver, consultant, author and a former IT executive who has led many large-scale IT transformation projects, and John Jeremiah, Technology Evangelist at Hewlett Packard Enterprise (HPE), on Twitter at @j_jeremiah. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
Nov. 26, 2015 03:45 AM EST Reads: 693
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Nov. 26, 2015 03:00 AM EST Reads: 307
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now all corporate assets – people, objects, and spaces – can share information about themselves and thei...
Nov. 26, 2015 02:00 AM EST Reads: 193
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Nov. 26, 2015 01:30 AM EST Reads: 438
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
Nov. 26, 2015 12:00 AM EST Reads: 532
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Nov. 26, 2015 12:00 AM EST Reads: 288
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Nov. 26, 2015 12:00 AM EST Reads: 493
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Nov. 25, 2015 10:00 PM EST Reads: 398
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Nov. 25, 2015 09:00 PM EST Reads: 373