ima cloud computing mar2010 v8

© 2010 IBM Corporation

An Introduction to Cloud Computing

Tony Pearson – IBM Senior Managing Consultant18 March 2010


Introduction to Cloud Computing

2

Agenda

�Why is everyone excited about Cloud Computing?

�How did we get here?

�What exactly is Cloud Computing?

�Who is leading the Cloud Computing revolution?

�Where is this all going?



3

Agenda


� Business Benefits







4

Cloud computing is a key catalyst

for these changes

•Flexible, adaptable,

extendable systems

•Reliability

•User adoption &

empowerment

CIO

•Improved growth &

profitability

•Governance, risk &

compliance

•Transparency, visibility

& control

CFO

• Innovation for competitive advantage

• Faster, broader, more uncertain change

• Strategic alignment

CEO

Why the CxO is interested in cloud computing?



5

Capacity versus Usage

• Not enough capacity – dissatisfaction• More capacity than needed – waste

Usage/DemandTraditional IT approach waste

Provisioning delay

dissatisfaction

time

Co

mp

uti

ng

po

wer

waste



6

Capacity versus Usage

• Not enough capacity – dissatisfaction• More capacity than needed – waste• Capacity matches need – just right

Usage/DemandTraditional IT approachCloud services

time

Co

mp

uti

ng

po

wer



7

So what’s different about Cloud?

Server/Storage Utilization

10-20%

Self service None

Test

ProvisioningWeeks

Change Management

Months

Release Management

Weeks

Metering/BillingFixed cost

model

Payback period for new services

Years

70-90%

Unlimited

Minutes

Days/Hours

Minutes

Granular

Months

Legacy environments

Cloud enabled enterprise

Cloud is a synergistic fusion which accelerates business value across a wide variety of domains.

Capability From To



8

Preliminary TCO Analysis

� Compares traditional model vs. Cloud Computing service

� Includes acquisition, management, power/cooling, floor space

� Also includes network circuit cost, with full redundancy

� Circuit costs are offset by economies of scale, reduced operational costs

� Initial modeling shows 43% savings over 4 years, and 73% in year 1

Traditional Data Center Cloud Computing Services

Source: IBM



9

Hardware Costs

( - 89%)

Hardware Costs

( - 89%)

Labor Costs ( - 81%)

Labor Costs ( - 81%)

Deployment (1-time)Deployment (1-time)

Liberated funding for new development,

transformation investment or

direct saving

Liberated funding for new development,

transformation investment or

direct saving

Hardware Costs

(annualized)

Hardware Costs

(annualized)

New

Development

New

Development

Current

IT

Spend

StrategicChange Capacity

Hardware,

labor &

power

savings

reduced

annual cost

of operation

by 84%

100%

Labor Costs (Operations and

Maintenance)

Power Costs(- 89%)

Power Costs

Software Costs

Software Costs

Reduced Capital Expenditure

Reduced Operations Expenditure

Additional BenefitsReduced risk, less idle time, more efficient use of energy, acceleration of innovation

projects, enhanced customer service

Business Case Results:Annual savings: $3.3M (84%)

from $3.9M to $0.6M

Payback Period: 73 days Net Present Value (NPV): $7.5M

Internal Rate of Return (IRR): 496%Return On Investment (ROI): 1039%

ROI Analysis – Internal IBM Project for 100,000 users

Source: IBM



10

Avoid the “Heavy Lifting” involved with running a Data Center

�Traditional on-premises IT Approach

�Cloud-Based Infrastructure

Source: IBM software available in the Cloud with Amazon Web Services, April 2009



11

Agenda



� History of Cloud






12

Application Service Provider

Time-Sharing

Grid Computing

Cloud Computing

History of Cloud Computing – Time-Sharing

If computers of the kind I have advocated become the computers of the future, then computing may

someday be organized as a public utility just as the telephone system is a public utility... The computer utility could become the basis of a new and important industry.

“

—John McCarthy, MIT Centennial in 1961

„

In the 1960s and 70s, several companies provided time-sharing services as

service bureaus, including IBM, GE, and Bolt, Beranek, and Newman (BBN).



13

Telephone System as Public Utility

In the beginning, telephone companies had

to manually connect callers with recipients



14


Cloud Computing

History of Cloud Computing – Grid Computing

Grid computing is the combination of geographically distributed computer systems, interconnected by a network, applied to a common task, usually to a scientific, technical or business problem that requires a great number of computer processing cycles or the need to process large amounts of data.

Grid Computing

Time-Sharing



15

Networks connected many locations together

Telephone companies switched to a grid of network switches to

automate what human switchboard operators once did



16


Cloud Computing

History of Cloud Computing – Application Service Provider

Subscription fees were often monthly, by the number of employees or users

An Application Service Provider (ASP) is a company that offers individuals or companies access over the Internet to applications and related services that would otherwise have to be located in their own computers.

Grid Computing

Time-Sharing



17

Cloud – The Symbol for all networks, including the Internet

Networks were cumbersome to draw, so engineers represented

them as an oval, amoeba, or cloud shape.

The cloud shape was adopted as the symbol for all networks,

including the Internet



18

2009


Cloud Computing

“Clouds will transform the information technology (IT) industry…profoundly change the way people work and companies operate.”

Cloud Computing – A Disruptive New Paradigm?

Cloud computing is a pay-per-use model for enabling network access to a pool of computing resources that can be provisioned and released rapidly with minimal management effort or service provider interaction.

� Network access

� Rapid Elasticity

� Pay-per-use

� Self-service

� Pool of Resources

Grid Computing

Time-Sharing

Source: National Institute of Standards and Technology (NIST)



19

Agenda




� Enabling Technologies





20

Cloud Computing - Explained



21

“People do not want quarter-inch drills. They want quarter-inch holes.”

Professor Emeritus Theodore Levitt, Harvard Business School



22

An Analogy – Transportation Alternatives

Traditional Approach: Buy a car, drive it yourself, have a place to park it,

take care of maintenance and insurance.

Rental with or withouth Chauffer: Rent a car by the day or week. Drive it yourself, or hire a chauffer to drive the car for you.

Transportation as a Service: Hop in the back seat of a taxi andtell driver where

you would like to go. Pay by the mile.



23

An Analogy – Transportation as Someone Else’s Problem

You Decide where to go You Decide where to go

You DriveParking / Storage

Someone else Drives

Parking / Storage

You Purchase VehicleOngoing Maintenance

Someone else purchases Vehicle

Ongoing Maintenance

Purchases Vehicle,Ongoing Maintenance

You Decide where to go

You Drive (or hire someone) Weekly Parking

Traditional Weekly Rental Taxi



24

The Many Shades of Cloud Computing

Facilities

Hardware

Platform

Build App

Use Application

Facilities

Hardware

Platform

Build or Buy App

Use Application

Facilities

Hardware

Platform

Build or Buy App

Use Application

Infrastructure as a Service (IaaS)

Software as a Service (SaaS)

Platform as a Service (PaaS)

Tra

dit

ion

al IT

Data

cen

ters

Tra

dit

ion

al O

uts

ou

rcin

g



25

Understanding Cloud Computing



26

The Many Shades of Cloud Computing – IaaS

Infrastructure

as a Service (IaaS)

They Manage:IaaS provider manages the data center building facilities, owns and configures all of the computer servers, storage and networks, providing clients “Virtual Machines”

You Manage:You manage the operating system platform and application software

Facilities

Hardware

Platform

Build or Buy App

Use Application

Virtual Machine (VM)Server – Storage - Network



27

Server Virtualization

Traditional Approach:

• Single Operating System (OS)• One application (multiple apps might

conflict with each other)• Hardware resources underutilized

Server Virtualization Approach:• Encapsulate OS+Application into a

“Virtual Machine” (VM) image• Partition physical machine to

support multiple VMs• Isolate each VM from each other

for multi-tenancy• Better utilization of underlying

physical hardware

Source: VMware



28

Hypervisor Example: VMware ESX

Guest Operating System

Virtual Machine (VM)

Virtual Resources

Hypervisor

Host or “Host Machine”

Physical ResourcesSource: VMware



29

Server Farms With a Hypervisor, you typically have 5 to 20 virtual machines per host

VMware – Market Leader for Intel/AMD x86 hosts

XEN --- Open Source, available commercially as Citrix XenServer

PowerVM – Hypervisor for POWER-based servers

Hyper-V – Contender from Microsoft

KVM – part of the Linux operating system

Source: VMware



30

The Many Shades of Cloud Computing -- PaaS


Facilities

Hardware

Platform

Build or Buy App

Use Application

Platform StackLAMP - .NET – J2EE

They Manage:PaaS provider manages the Operating Systems, Databases, Web servers and programming languages needed to provide clients a “Platform Stack” to run applications

You Manage:You manage the application software, pre-packaged software and/or applications your company develops internally



31

Three Popular “Platform Stacks”

Linux WindowsUNIX (AIX, z/OS,HP-UX, Solaris)

ApacheInternet

Information Services (IIS)

WebLogic, WebSphere

MySQL SQL Server

PHP ASP.net Java

IBM DB2,Oracle

LAMP J2EE.NET



32

The Many Shades of Cloud Computing -- SaaS


Facilities

Hardware

Platform

Build App

Use Application

Login Credentialsuserid/password

They Manage:SaaS provider develops, tests and manages the application software, providing login credentials to clients and balancing the number of users on each virtual machine

You Manage:You manage employee access to applications and data



33

Cloud Providers do not need to be Vertically Integrated


Infrastructure as a Service (IaaS)


ClientA team of system,

database and backup administrators

A team of application designers and

software engineers

A team of server, storage and network

administrators



3434

Cloud Economics are RealInfrastructure, Labor, and Re-Engineering IT Business and Delivery Processes Drive Cloud Economics

Virtualization of Hardware

Standardization of Workloads

Utilization of Infrastructure

Automation of Management

Virtualized environments get benefits of scale when they

are highly utilized

Drives lower capital

requirements

Less complexity =

more automation possible = fewer people needed

Take repeatable tasks and

automate

Lab

or

Le

vera

ge

Infr

astr

uctu

re

Le

vera

ge

Self ServiceClients who can “serve

themselves” require less support

and get services



3535

Cloud Computing Alternatives

Service provider owned and managed.

•Access by subscription.•Delivers select set of standardized business

process, application and/or infrastructure services on a

pay-per-usage basis.

Private cloud…

Public Cloud

Private Cloud

.…Security, privacycustomization & control

.…Standardization, capital preservation, flexibility and time to deploy

Hybrid cloud …•The combination of

public and private models for the greatest efficiencies and broadest workload support.

•Privately owned and managed.

•Access limited to client and its partner network.

•Drives efficiency, standardization and best practices while retaining greater customization and control

Cloud solutions can be implemented behind client firewall in managed or un-managed configurations and as a hosted offering.

Public cloud…



36

Scale

Unit cost

Traditional

Infrastructure

Private

Cloud Service

Provider

Public

Cloud

Enterprises can significantly reduce costs for some workloads compared with traditional IT

Standardization and optimization by workload enables economies of scale.

Source: IBM On a Smarter Planet – New ideas for Smarter IT



37

Agenda





� The Major Players




38

Is Cloud Computing a Revolution?

Source: http://www.andybudd.com/presentations/dcontruct05/



39

Cloud Computing enables innovative business models by providing IT services from a dynamic infrastructure faster, simpler and cheaper

Clients Business Value:New combinations of services create differentiating value at lower cost in less time

Cloud Services delivered from a Dynamic Infrastructure:

� Open standards-based

� Common components and processes

� Flexible scaling

� Request driven provisioning

INNOVATIVE BUSINESS MODELS

Cloud Services

Dynamic Infrastructure

Clo

ud

Co

mp

uti

ng

Clo

ud

Co

mp

uti

ng



40

Software as a Service (SaaS) Providers

� AthenaHealth– Physician billing, practice management

and Electronic Health Records

�Google– Gmail, GoogleDocs for spreadsheet,

documents and presentations

� IBM LotusLive™– Web conferencing, collaboration and

Lotus Notes e-mail

� Intuit– Small Business Web Design, Invoice,

Payroll and Tax services

�Microsoft– Office, Sharepoint, Exchange Online

� NetSuite– Business accounting software, ERP,

CRM and ecommerce

� RightNow Technologies– Web, social, and call center support

� Salesforce.com– Customer Relationship Management

(CRM) for sales professionals



41

Infrastructure and Platform Service Providers – Major Players



42

Amazon Web Services (AWS)

Elastic Compute Cloud (EC2)8.5¢ per hour – Linux

12¢ per hour – Windows

Data Transfer In10¢ per GB

Data Transfer Out15¢ per GB

Simple Storage Service (S3)15¢ per GB/month

PUT (submit form)1¢ per 1,000 requests

GET (show web page)1¢ per 10,000 requests

No cost transfers between EC2 and S3

Amazon SimpleDBIBM DB2,Informix

Oracle, MySQLSQL Server

Simple Queue Service (SQS)1¢ per 10,000 Send/Receive

Clients

Source: aws.amazon.com/



43

EnterpriseEnterprise

Data Center

Private

Cloud

Enterprise

Data Center

IBM Operated

Managed

Private

Cloud

Hosting CenterHosting Center

Hosted

Private Cloud

Enterprise A

Shared

Private Cloud

Cloud

Enterprise owned and operated

Enterprise owned and operated

Enterprise owned; IBM operated

Enterprise owned; IBM operated

Customer/IBM owned and IBM operated

(single tenant)

Customer/IBM owned and IBM operated

(single tenant)

IBM owned and operated

(multi-tenant)


(multi-tenant)

Enterprise B

Enterprise C

1 2 3 4

Public Cloud

Cloud


(multi-tenant)


(multi-tenant)5

User

AUser

BUser

C

User D

User …

Private Cloud Shared Private Cloud Public Cloud

Cloud Services delivered publicly toend users / secure, enterprise-class

Cloud Servicesdelivered privately toEnterprises / virtualseparation of tenants

Customer owns and pays for infrastructureand has unlimited exclusive access

IBM owns infrastructure and customer has shared access and pays by usage

IBM’s Five co-existing cloud delivery models



44

IBM CloudStandardized services

on the IBM cloud

Preintegrated, workload-optimized systems

Private cloud services, behind your firewall, built and/or managed by IBM

IBM Lotus Live

IBM Lotus®

iNotes®

IBM CloudBurst™ family

IBM Smart Business Test Cloud

IBM Smart Business Desktop Cloud

IBM Smart Business StorageCloud

Analytics Collaboration Development and test

Desktop and devices

Infrastructurestorage

IBM Smart Analytics System

Smart Business for Small or Midsize Business (backed by the IBM Cloud)

Infrastructurecompute

IBM Computing on Demand

IBM Information Protection Services

Business services

BPM BlueWorks(design tools)

IBM Smart Business Desktop Cloud

IBM Smart Analytics Cloud

Smart business expense reporting on the IBM cloud

IBM Information Archive

Smart Business Development and Test on the IBM Cloud (beta)

Smart Business End User Support

IBM Scale-Out NAS

CustomizedSolutions

IntegratedSystems

IBM Cloud Services and Systems Portfolio

IBM Grid Medical Archive Solution (GMAS)

IBM Lotus®

Foundations



45

Cloud Component Suppliers -- “The Arms Dealers”



46

Cloud Computing – Consumers

North Carolina State University

Cloud computing helped reduce the data center footprint by 50 percent, energy costs by 30 percent. Recover from any failure within 4 hours, including complete data center fail-over.

A quantum improvement in access, efficiency and convenience. Projected savings in software licensing costs of up to 75 percent. 150 percent increase in students served.

Ocean containerized shipping

Kantana Animation Studios

Kantana consolidated their fragmented islands of information into a global, infinitely scalable, heterogeneous grid, operating the most resilient, high performance environment that meets most challenging business needs.

Source: IBM



47

Agenda






� Future predictions



48



49

=

CLOUD COMPUTING

CostVIRTUALIZATION +STANDARDIZATION AUTOMATION+ Flexibility

Cloud Economics

…leveraging virtualization, standardization and automationto free up operational budget for new investment.



50

Cloud Prediction from Sun CTO Greg Papadopoulos

� A "neutron star collapse of data centers"

– It won't make sense for businesses to build their own data centers.

� Hosting providers will bring "brutal efficiency" for utilization, power, security, service levels, and idea-to-deploy time.

– A half dozen very large cloud infrastructure providers and a hundred or so regional providers

� Look more like the banking world

– Customers will trust service providers with their private data as they do banks with their money.



51

Co-existing delivery models are emerging…

Enterprise

Service Consumers

Service Integration Service Integration

Traditional Enterprise IT

Private Cloud

Services Services

Service Integration

PublicClouds

Services

� Mission Critical� Packaged Apps� High Compliancy/Security� Proprietary Platforms

� Virtual Desktop� Test/Development� Data Mining/Analytics� Service/Help Desk

Hybrid Clouds

� Variable Storage� Software as a Service� Archive/Disaster Recovery� Web Hosting/Conferencing



52

Cloud Computing can be seen as a threat or opportunity for the CIO.

Some CIOs worry that Cloud will bring about disruptive change to IT Operations

� Line-of-business units going to “public cloud providers” for IT instead

� Disintermediation of the traditional IT team

� As some have said, it is “Client / Server all over again”

CIOs need to embrace the change, not resist it

� Understand the benefits of cloud, as well as its drawbacks

� Understand the public cloud providers capabilities and include these services in IT offerings as it makes sense

With an IT strategy that embraces Cloud, CIOs can better satisfy their customers

� Improves visibility of IT use, more responsive, simpler, cheaper

� Requires an overall strategic vision with pragmatic, evolutionary approach

� Increases range of services, applications, and capabilities available to clients



53

Getting Started in Cloud Computing

� Build your own Private or Hybrid Cloud!

– Free trial versions of Hypervisors

– Ubuntu Linux has KVM and XEN, full LAMP stack, and Eucalyptus cloud management software – FREE!

– Consider Hardware-Assisted servers

• Intel VT

• AMD-V

� Try out Public Cloud Computing Today!

– SaaS provide free trial memberships

– IaaS/PaaS offer hourly rates with no long-term commitment, free uploads, test/development images, and other promotions



54

Learning Points – Cloud Computing

�Cloud computing is a new IT consumption and delivery model based on standard network protocols and interfaces

�Resource pooling, virtualization and automation allows for economies of scale

�Rapid elasticity and pay-per-use billing can offer workload-optimized systems with low barrier of entry and reduced cycle time

�Business leaders, governments, and non-profits can all benefit from Cloud Computing



55

Questions and Answers (Q&A)



56

Thank you!

For more information, please visit:ibm.com/cloud

Tony Pearson’s blog:http://bit.ly/1YyMNg



57

© IBM Corporation 1994-2010. All rights reserved.References in this document to IBM products or services do not imply that IBM intends to make them available in every country.

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Trademarks and Disclaimers

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Technology

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