Business Model and strategy research- Cloud Computing

Indian Opportunities

Road map and challenges for success

Opportunity US $ 5bn with 30% CAGR

Prepared by Debasish ChoudhuryMail : debasishchoudhury.sai@gmail.comhttp://in.linkedin.com/in/debasishchoudhury

Goals and Objectives

Section-B Identifying the existing opportunities (From slide No 32)

• Identifying the most viable Cloud computing opportunity for India

• Customer business value and business opportunities

• Solution and business need (Products)

• External dependencies and strategic partnership eco system

• Target segment and captive opportunities

• Go to market strategy and business roll outs

• Suggestive pricing and revenue ( Grab a secret)

Section-A : Understand the relevant cloud for India

• Understanding the perspectives

• Key movers

Section-C: Deep insight and correct techno commercial sizing (From slide 46)

• How to compete with established bigies & their weakness

• Key technical features required in product and solutions

Section-A

Understanding The Cloud computing in perspective to India – A definitive view beyond the hypes

Cloud Computing - Some terms

Term cloud is used as a metaphor for internetConcept generally incorporates combinations of the

following Infrastructure as a service (IaaS)Platform as a service (PaaS)Software as a service(SaaS)

Not to be confused withGrid Computing – a form of distributed computing

Cluster of loosely coupled, networked computers acting in concert to perform very large tasks

Utility Computing – packaging of computing resources such as computing power, storage, also a metered services

Autonomic computing – self managed

Grid Computing

Share Computers and data Evolved to harness inexpensive computers in Data center to solve variety of problems Harness power of loosely coupled computers to solve a technical or mathematical problem Used in commercial applications for drug discovery, economic forecasting, sesimic analysis and

back-office Small to big

Can be confined to a corporation Large public collaboration across many companies and networks

Most grid solutions are built on Computer Agents Resource Manager Scheduler

Compute grids Batch up jobs Submit the job to the scheduler, specifiying requirements and SLA(specs) required for running the job Scheduler matches specs with available resources and schedules the job to be run Farms could be as large as 10K cpus

Most financial firms has grids like this Grids lack automation, agility, simplicity and SLA guarantees

Utility Computing

More related to cloud computingApplications, storage, computing power and network

Requires cloud like infrastructure

Pay by the drink modelSimilar to electric service at home

Pay for extra resources when neededTo handle expected surge in demand

Unanticipated surges in demand

Better economics

Cloud computing – History

• Evolved over a period of time

• Roots traced back to Application Service Providers in the 1990’s

• Parallels to SaaS

• Evolved from Utility computing and is a broader concept

Cloud computing

Much more broader concept Encompasses IIAS, PAAS, SAAS

Dynamic provision of services/resource pools in a co-ordinated fashion On demand computing – No waiting period Location of resource is irrelevant

May be relevant from performance(network latency) perspective, data locality

Applications run somewhere on the cloud Web applications fulfill these for end user However, for application developers and IT

Allows develop, deploy and run applications that can easily grow capacity(scalability), work fast(performance), and offer good reliability

Without concern for the nature and location of underlying infrastructure

Activate, retire resources Dynamically update infrastructure elements without affecting the business

Clouds Versus Grids

Clouds and Grids are distinctCloudFull private cluster is provisioned Individual user can only get a tiny fraction of the total resource poolNo support for cloud federation except through the client interfaceOpaque with respect to resources

GridBuilt so that individual users can get most, if not all of the resources

in a single requestMiddleware approach takes federation as a first principleResources are exposed, often as bare metal

These differences mandate different architectures for each

Commercial clouds

Cloud Anatomy

Application Services(services on demand) Gmail, GoogleCalender Payroll, HR, CRM etc Sugarm CRM, IBM Lotus Live

Platform Services (resources on demand) Middleware, Intergation, Messaging, Information, connectivity etc AWS, IBM Virtual images, Boomi, CastIron, Google Appengine

Infrastructure as services(physical assets as services) IBM Blue house, VMWare, Amazon EC2, Microsoft Azure Platform, Sun Parascale and more

Cloud Computing - layers

Layers Architecture

What is a Cloud?

PrivatetIndividuals Corporations Non-Commercial

Cloud Middle Ware

Storage Provisioning

OSProvisioning

NetworkProvisioning

Service(apps)Provisioning

SLA(monitor), Security, Billing,Payment

Services Storage Network OS

Resources

Why cloud computing

Data centers are notoriously underutilized, often idle 85% of the timeOver provisioningInsufficient capacity planning and sizingImproper understanding of scalability requirements etc

including thought leaders from Gartner, Forrester, and IDC—agree that this new model offers significant advantages for fast-paced startups, SMBs and enterprises alike.

Cost effective solutions to key business demandsMove workloads to improve efficiency

How do they work?A conventional legacy view as observed by many

Public clouds are opaqueWhat applications will work well in a cloud?

Many of the advantages offered by Public Clouds appear useful for “on premise” IT Self-service provisioning Legacy support Flexible resource allocation

What extensions or modifications are required to support a wider variety of services and applications? Data assimilationMultiplayer gamingMobile devices

Cloud computing – Characteristics

A conventional legacy view as observed by many

Agility – On demand computing infrastructure Linearly scalable – challenge

Reliability and fault tolerance Self healing – Hot backups, etc SLA driven – Policies on how quickly requests are processed

Multi-tenancy – Several customers share infrastructure, without compromising privacy and security of each of the customer’s data

Service-oriented – compose applications out of loosely coupled services. One service failure will not disrupt other services. Expose these services as API’s

Virtualized – decoupled from underlying hardware. Multiple applications can run in one computer

Data, Data, Data Distributing, partitioning, security, and synchronization

Public, Private and Hybrid clouds

Public clouds

Open for use by general publicExist beyond firewall, fully hosted and managed by the

vendorIndividuals, corporations and othersAmazon's Web Services and Google appEngine are

examples

Offers startups and SMB’s quick setup, scalability, flexibility and automated management. Pay as you go model helps startups to start small and go big

Security and compliance?Reliability concerns hinder the adoption of cloudAmazon S3 services were down for 6 hours

Public Clouds (Now)

Large scale infrastructure available on a rental basisOperating System virtualization (e.g. Xen, kvm) provides CPU isolation “Roll-your-own” network provisioning provides network isolation Locally specific storage abstractions

Fully customer self-service Service Level Agreements (SLAs) are advertized Requests are accepted and resources granted via web services Customers access resources remotely via the Internet

Accountability is e-commerce basedWeb-based transaction “Pay-as-you-go” and flat-rate subscription Customer service, refunds, etc.

Private Clouds

Within the boundaries(firewall) of the organization All advantages of public cloud with one major difference Reduce operation costsHas to be managed by the enterprise

Fine grained control over resources More secure as they are internal to org Schedule and reshuffle resources based on business demands Ideal for apps related to tight security and regulatory concerns Development requires hardware investments and in-house

expertise Cost could be prohibitive and cost might exceed public clouds

Clouds and SOA

SOA Enabled cloud computing to what is today Physical infrastructure like SOA must be discoverable, manageable

and governable REST Protocol widely used(Representational State Transfer)

Clouds for Developers

• Ability to acquire, deploy, configure and host environments

• Perform development unit testing, prototyping and full product testing

Open Source Cloud Infrastructure

Simple Transparent => need to “see” into the cloud Scalable => complexity often limits scalability Secure => limits adoptability

ExtensibleNew application classes and service classes may require new features Clouds are new => need to extend while retaining useful features

Commodity-basedMust leverage extensive catalog of open source software offeringsNew, unstable, and unsupported infrastructure design is a barrier to

uptake, experimentation, and adoption

Easy To install => system administration time is expensive To maintain => system administration time is really expensive

Open Source Cloud Ecosystem - Tools

• RightScale

– Startup focused on providing client tools as SaaShosted in AWS

– Uses the REST interface

• Canonical

– Ubuntu 9.10 (Karmic Koala)

– Includes KVM and Xen Hypervisors

Open Source Cloud Anatomy

ExtensibilitySimple architecture and open internal APIs

Client-side interfaceAmazon’s AWS interface and functionality (familiar and testable)

NetworkingVirtual private network per cloudMust function as an overlay => cannot supplant local networking

SecurityMust be compatible with local security policies

Packaging, installation, maintenancesystem administration staff is an important constituency for uptake

Eucalyptus(Elastic Utility Computing Architecture Linking Your Programs To Useful Systems)

Clouds and Virtualization

Operating System virtualization (Xen, KVM, VMWare, HyperV) is only apparent for IaaSAppEngine = BigTable

Hypervisors virtualize CPU, Memory, and local device access as a single virtual machine (VM)

IaaS Cloud allocation isSet of VMsSet of storage resourcesPrivate network

Allocation is atomicSLAMonitoring

Cloud Performance

Extensive performance study using HPC applications and benchmarks

Two questions:Performance impact of virtualizationPerformance impact of cloud infrastructure

Observations:Random access disk is slower with XenCPU bound can be faster with Xen -> depends on configurationKernel version is far more importantNo statistically detectable overheadAWS small appears to throttle network bandwidth and

(maybe) disk bandwidth -> $0.10 / CPU hour

Clouds – open for innovation

Cloud computing open issues

Governance Security, Privacy and control SLA guarantees Ownership and control Compliance and auditing

Sarbanes and Oxley Act

Reliability Good servive provider with 99.999% availability

Cloud independence – Vendor lockin? Cloud provider goes out of business

Data Security Cloud lockin and Loss of control

Plan for moving data along with Cloud provider

Cost? Simplicity? Tools Controls on sensitive data?

Out of business

Big and small Scalability and cost outweigh reliability for small

businesses Big businesses may have a problem

Battle in the cloud

• Amazon Web Services

• Google App Engine– Free upto 500 MB,

• Free for small scale applications?

• Universities?

– Pay when you scale

• GoGrid

• .. Some more Hosting companies

• Where is HP, IBM, Oracle(+sun) and Dell?

Section-BBring the cloud to shower the bounty– Go, build

and empower

Re asserting the objectives

• Identifying the most viable Cloud computing opportunity for India

• Customer business value and business opportunities

• Solution and business need (Products)

• External dependencies and strategic partnership eco system

• Target segment and captive opportunities

• Go to market strategy and business roll outs

• Suggestive pricing and revenue ( Grab a secret)

Don’t Ignore : Microsoft and Amazon face challenges

Globus/Nimbus Client-side cloud-computing interface to Globus-enabled TeraPort cluster at U of C Based on GT4 and the Globus Virtual Workspace Service Shares upsides and downsides of Globus-based grid technologies

Enomalism (now called ECP) Start-up company distributing open source REST APIs

Reservoir European open cloud project Many layers of cloud services and tools Ambitious and wide-reaching but not yet accessible as an implementation

Eucalyptus Cloud Computing on Clusters Amazon Web Services compatible Supports kvm and Xen

Open Nebulous

Joyent Based on Java Script and Git

Identifying the most viable Cloud computing opportunity for India

• What is the hidden IT pilferages in India– The hardware market enjoys healthy sell. PC,LAN, Routers, servers etc

– There is an estimate of US $ 4 bn OS piracy

– Un successful attempt in open source having a grip on US $ 12BN

– Other applications pirated, infringed, locally developed US $ 16BN

– Beyond budget scenario killing an US $ 20 Bn market of ERP,CRM,SCM,MAIL, DB etc in SME, Govt, Education etc

• What differentiates & brings a compelling Cloud on pay per use or flexible usage– Remote OS and desktop applications

– Customized ERP & CRM for SME and Retail chains from cloud with flavour of private cloud

– Clustered virtualised DB services without load of licensing and on hosted model

– Education content digitised and on affordable scale

– Foot on street with resellers on commission basis

Identifying the most viable Cloud computing opportunity for India an example ( offering pitch of a major SI to a major Government entity)

I. Infrastructure as a service for :•Roll out of new applications whose usage is un

predictable

•Development and testing platforms

•Infrastructure that is coming up for refresh

II. DR as a service for mission –Critical

applications•Application on SAAS mode

•Document Management system

•Online CMS

•Design and build private cloud

Customer business value and business opportunities

• OS & Office applications– The OS license per user when offered from cloud reduces the overhead and contributes

higher sale at lower prices

– Enhanced office applications lead customization and continued revenue

• DB & Web servers– DB designed from cloud will reduce the cost up to 80% to user and increase the

marketability by 1200%

– Back up and restoration can be very cheap and profitable

• ERP, CRM & BPM– The license cost is nominal but customization and infrastructure backed by Cloud will

reduce the cost to 75% !!

– Open up the health exchange services

• Multi media content– A huge hit for education

• Personalised services– Services like web talk will move to new heights

– Social networking to new revenue

– New developed and open market place for innovative software developments !!

Solution and business need

• Target retail– A huge base of retail under price pressure and not capable to avoid the hardware cost.

But compromise on OS & Application

– Package and hybrid for Private cloud with :

• CRM

• ERP

• BI & DWH

• BPM

• SCM

• Target Education ( Primary and higher)– Packaged content of education multi media for regions and states and launched through

partners

• Target Govt– A comprehensive partnered OS, MAIL, DB, WEB and ERP

• Target New Tech SME & big industries– Up coming segments of Pharmacy, Chemical , power & auto

• Target home and domestic– House hold PC is a sleeping dragon over god mine !!

External dependencies and ecosystem

• ISV and Applications– Segment basis applications like Mail, finance & accounting, CRM, ERP need to be looped.

– Regional and clustered opportunity need to be tweaked and packed in a clod

• Resellers– VAR and IT sellers to map the lead to closures

• SI and tech partners– Customize to build private clouds and offer dedicated help desks

• Infrastructure players– Connectivity and data centers

Target segment and captive opportunities

• Retail– The opportunity lies with 200 plus organised retailes

• Education ( Primary and higher)– Pan India primary education

– Engineering colleges

• Govt– Indian Railways and state e-gov

• New Tech SME & big industries– Chemical and drug + hospitals

– Automotive

– Power

• home and domestic– Education

– Entertainment

GO To Market (GTM) & BUSINESS ROLL OUT• Capturing the business need of high volume high margin segments

– Package the offering

– Build the re seller

– Target retail and education on phase-1 and Govt on Phase-2 and domestic on phase-3

• Design the offerings– Create various flavours in collaboration with applications

• Build the cloud in offering mode– Deploy the applications

– Build the fulfilment models

– Prepare the menu card

– Nurture the infrastructure provider

A time line of 3 to 6 months

Suggestive pricing and revenue

Three main purposesSoftware as a service (SaaS) Enterprise resource management through

internet

Platform as a service (PaaS) Developing software on a shared platform on the

cloud

Infrastructure as a service (IaaS) Getting service from a full computer

infrastructure through the internet Storage & databases

Suggestive pricing and revenue

• Collection of servers owned by a cloud provider

• Cloud automatically utilizes the right no. of servers, adding or releasing servers, as load fluctuates

• Data Centers

Wuxi China Cloud Computing Center

• Offers emerging Chinese software companies the ability to tap into a virtual computing environment to support their development activities.

• A shared facility, providing each company in the Wuxi Software Park with its own virtual data center

• Enabled by IBM technology and service• Managed with IBM Tivoli systems management products• Hardware – IBM System x, System p and BladeCenter

• Benefits– Up to 2Fast deployment of Rational software development environments

– 00K software developers, 100 companies

– Cost efficient shared infrastructure

"The China Cloud Computing Center represents a milestone in service-oriented computing," said T. W. Liu, the chairman and CEO of iSoftStone. "It will allow companies in the Wuxi Software Park to leapfrog to the newest computing models and will provide an efficient IT platform for software development."

IBM establishes the first Cloud Computing Center for software companies in China at the new Wuxi Tai Hu New Town Science and Education Industrial Park in Wuxi, China

Suggestive pricing and revenue- A reference

Suggestive pricing and revenue

• Converging Web-centric clouds and enterprise data centers

• Establishing Pan India but converged with worldwide cloud computing centers to drive adoption

• Need to lead the way in bringing cloud computing benefits to enterprises

Section-CMajor mismatch & weakness of major players :

Note the parameters required for success

Challenge for cloud system proposed by : Microsoft, Amazon, Google & Sales force .

Enterprise Cloud : A complete out of reach of these major players

• Enterprise cloud need– Specific business process and customizable Private clouds are not the feature in the

offerings of the above players.

• Security and reliability – The business specific clustered security with partition of multi tenancy is the need.

– Multi level access is absent.

• Enhanced values and pricing– Specific value added enterprise IT system is absent.

• Application developments– Enterprise specific SDLC process is absent.

Challenge for cloud system proposed by : Microsoft, Amazon, Google & Sales force .

Retail Cloud : A complete out of reach of these major players

• Retail cloud need– Segment specific customized application is absent

• Business enhancement features– Critical business need of SCM and ERP missing

– Other applications are too completed to access from cloud

• Operational need and compliances– Various modules for small business missing

• Sharing and collaborating– Various platforms to collaborate is absent

– Hitless merger from PC to business with applications is a total miss match

Challenge for cloud system proposed by : EMC, CISCO, ORACLE etc

IAAS /PAAS Cloud : Miles to go to reach the business

• On demand setup– Sizing and dedicated feature based services absent

• Business centric maintenance – Availability and SLA management to serve end customers is poorly managed

• Reliable multi tenancy– Load and demand mapping without cost implication is totally ignored

• Business specific fabric computing– High demand and on demand systems design with unique customization is long way to

go.

– Application and delivery models with complying to PCMM and ITIL standards poorly mapped.