The recent McKinsey report “Clearing the air on cloud computing” has caused quite a bit of stir within the cloud community, and I can see why. While it definitely brings a good deal of analysis to the table, I feel it is somewhat generalized, makes assumptions and does overlook some key points.

First and foremost, this article is NOT going to be an analytical discussion of the cost of running or setting up a datacenter vs. an Amazon EC2 Windows instance. I’m not a financial analyst. Honestly, calculating the Total Cost of Assets (TCA) or Total Cost of Operations (TCO) causes my eyes to roll back into my head leaving me gasping for air. Don’t get me wrong, it seems like some good effort was made analyzing data and formulating conclusions. The problem is, I feel that they were on a jetliner, shooting through the clouds with the shades 1/2 down.

Before I start with my own analysis and commentary, I would like to reference a few responses I have read that somewhat chastise McKinsey.

Three “Rebuttal” Articles to Read

The first comes from CIO IT Drilldown’s Virtualization site. In his article “McKinsey Cloud Computing Report Conclusions Don’t Add Up,” Bernard Golden does the major lifting for me in terms of analysis. I have highlighted some key points from the article that I viewed to be particularly important (my highlighted version of the article is here). I particularly enjoyed Golden’s rebuttal to the analysis of cost calculations, namely use of EC2 Windows instances, headcounts that don’t add up and other “less visible” capital expenses for facilities and other assets. Also as Golden points out, McKinsey proposes that better efficiencies and savings can be realized through virtualization within the organization. To me, the McKinsey recommendation seems a bit counter-intuitive: “Don’t go with a vendor whose expertise IS virtualization, hardware, infrastructure, et al. Instead, DO try to do it yourself, with tremendous CapEx & OpEx expense.” Hmmm, makes sense to me, NOT! Lastly, I particularly liked Golden’s 3 recommendations (quoted from article):

1. Review your portfolio of applications to understand what cloud computing means to you.
2. Create a viable financial model for assessing the true costs of internal hosting.
3. Evaluate the potential for an internal cloud even if the numbers don’t work with an external cloud provider.

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Over the past year, I have written about the various primal layers of Cloud Computing. Typically, my role is to “over simplify” in order to make the Cloud a bit more palpable by “the masses.” My colleague, Randy Bias, is the resident über-tech, so I usually leave the more complicated developer and sys-admin posts to him. As we all know, the Cloud is hot and becoming increasingly complicated as new products, services and vendors throw their hats into the ring. But is this over-complication confusing and saturating the market? I think not, in terms of the latter, but it is truly becoming more confusing.

First, we at GoGrid, broadly define Cloud Computing as such (latest definition):

On-demand self-service Internet infrastructure where you pay-as-you-go and use-only what you need, all managed by a browser, application or API.

Even that definition I feel is a bit skewed toward Infrastructure. Probably more aptly defined, it would be:

On-demand, self-service Applications, Platforms, Services or Infrastructure dynamically consumed on a pay-as-you-go basis using a browser, application or API.

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Last week I had the pleasure of joining Peter Silva (Technical Marketing Manager at f5) and Telemachus Luu (Director of Business Strategy at GoGrid/ServePath) in a podcast hosted by f5 on their DevCentral community site. The topic of the podcast was “Cloud Computing” (of course) but specifically how using f5 technology, ServePath and GoGrid were able to create a full spectrum of hosting solutions ranging from Dedicated and Managed Hosting (ServePath) and Colocation hosting(ColoServe), up and into the Clouds with GoGrid.

The podcast titled “Hosting in the Cloud with ServePath and F5” covers a variety of topics including:

• ServePath’s product extension from managed hosting to cloud hosting with GoGrid
• The “Cloud Pyramid” and distinctions within the various Cloud layers
• Understanding the nuances within the Cloud Infrastructure layer: “Infrastructure Web Services” & “Cloudcenters”
• How f5 was paramount in creating a Cloud Computing Infrastructure offering

I encourage you to listen to this 30 minute podcast (forgive the audio quality, we were in an empty conference room) which is available at the following locations:

• On f5’s DevCentral site
• As a downloadable MP3 file
• Play from this site (click on the graphic below)

  Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.

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By now, many in the Cloud Computing space have heard about (or even read) the University of California Electrical Engineering & Computer Science’s (EECS) study on Cloud Computing titled: “Above the Clouds: A Berkeley View of Cloud Computing.” Published on February 10th, 2009, the EECS’s paper provides a seemingly academic study of the Cloud Computing movement, attempts to explain what Cloud Computing is all about, and identifies potential opportunities as well as challenges present within the market.

The 20+ page study is authored by Michael Armbrust, Armando Fox, Rean Griffith, Anthony D. Joseph, Randy H. Katz, Andrew Konwinski, Gunho Lee, David A. Patterson, Ariel Rabkin, Ion Stoica and Matei Zaharia who all work in RAD Lab. (Interestingly, several of the companies mentioned within the study are also Founding Sponsors and/or affiliate members: Sun, Google, Microsoft, Amazon Web Services, etc.).

There has already been plenty of discussion and analysis of this study (by James Urquhart, Krishna Sankar and has even appeared on Slashdot.org). Needless to say, I felt compelled to get my two cents in, especially from the perspective of a Cloud Computing Infrastructure vendor.

From an academic standpoint, this document definitely has some legs. It is complete with carefully thought out scenarios, examples and even formulae, as well as graphs and tables. Some of the points that are brought up even got me scratching my head (e.g., using flash memory to help by “adding another relatively fast layer to the classic memory hierarchy”). Even the case analysis of a DDoS attack from a cost perspective of those initiating an attack to those warding off an attack on a Cloud was interesting to ponder. I commend these group of authors on undertaking such a grand task of not only writing by committee but also overlaying a very business school vs. mathematics and computer sciences approach to the writing and analysis.

Unfortunately, however, as I read through the document, I started scrawling madly in the margins with commentary that is somewhat contrary to what was written within the study.

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2008 was an action-packed year for us here at GoGrid and ServePath and we have many accomplishments to be proud of. I thought it would make sense to reflect back on what major things we did over the year as well as a few other notables that happened within the industry. The easiest way for me to do this is through a blog post Chronology (not every post is highlighted):

1st Quarter 2008

• 01.03.08 – GoGrid Blog was launched
• 01.29.08 – “Sneak Peak” at GoGrid
• 02.01.08 – Twitter and Joyent go different ways
• 02.05.08 – Understanding “Clouded” Computer Terms – a post that made a 1st attempt to explain Cloud, Utility, Grid and other Computing terms.
• 02.13.08 – Dilbert does a series on Virtualization (here, here and here)
• 02.15.08 – Amazon’s S3 has major outage (my comments)
• 02.21.08 – GoGrid launches a new public website in anticipation of the product launch
• 03.11.08 – GoGrid Public Beta LAUNCH! After over 2 years of development, GoGrid hits the streets with many Cloud Computing firsts:
  • 1st Cloud Infrastructure provider with a Web GUI
  • 1st to offer Windows Server 2003 in the Cloud
  • 1st to offer Microsoft SQL Server in the Cloud
  • 1st with free Inbound Transfer
  • 1st with free f5 Load Balancing
  • 1st with free 24×7 Support
  • 1st with Persistent Storage
  • 1st with free managed DNS
  • 1st with 100% Uptime SLA
  • 1st with public and private VLANs
• 03.17.08 – Drilling down on the details of new GoGrid accounts
• 03.18.08 – Even I wasn’t initially on board with the whole “Cloud Computing” term. My thoughts have changed obviously.
• 03.28.08 – The initial GoGrid FAQ’s start rolling out.

2nd Quarter 2008 (more…)

The start of a New Year is upon us so it is time to get a list together of things that you will do (or do your best to do) in the coming year. Everybody has their own personal Resolution lists, but what about your Business ones? How are you going to remain competitive? What steps are you going to take to cut your budget to remain lean and mean? Are you going to stick with your current methods or adopt some new strategies?

Here are some “Resolutions” that you can think about as you ready your business for 2009.

1. Invest some time in understanding the term “Cloud Computing” – there are several easy-to-understand definitions and movies that have come out that make Cloud Computing a bit more understandable. This one was done at the 2008 Web 2.0 Expo. Then came the GoGrid “Cloud Computing in Plain English”. Recently, there is a new “In Plain English” from the actual Common Craft folks (whom we got our inspiration from). And here is a more technical presentation that came out recently. Regardless, there are lots of sources out there for quick understandings. I have been maintaining a Bookmark RSS feed as well of many of the Cloud Computing blogs and sites. Subscribe to that feed for updated links. Also, read through the popular Cloud Computing Group on Google. Lastly, you can check Wikipedia for their ever evolving definition of Cloud Computing.
2. Do some research on different Cloud Providers – no Cloud Computing provider is the same, and the differentiation is continuing. Last year (2008), I introduced the idea of the Cloud Pyramid which has Cloud Applications (SalesForce) at the top, then Cloud Platforms (Google App Engine or Microsoft Azure) in the middle and finally Cloud Infrastructure (GoGrid and Amazon EC2) as the bottom foundation. Also hooked into it are Cloud Extenders (e.g., Amazon’s SQS) and Cloud Aggregators (RightScale). It’s pretty obvious that there are many choices to be made and that these are very specific to the type of business you are running. In fact, we will be further segmenting the IaaS (Cloud Infrastructure) section more over the next few weeks. Briefly, GoGrid is now being positioned as a “CloudCenter” (which is essentially, a DataCenter equivalent but in the Cloud). More on that later. In the meantime, compile a series of questions for yourself and for your prospective provider. We will get a list together of things you might want to ask (post to come).
3. Review your IT Budget – If you are like most companies out there, you are going through your 2009 budgeting (or have done so already and are probably on your 10th revision now). One way to make your CFO happy is to reduce your Capital Expenditures (CapEx). The easiest way to do that is to really take a hard look at Cloud Computing. If you can slash your CapEx spend by downsizing your physical server footprints, you can easily upsize that same footprint in the Cloud.
4. Empower your Programmers – Cloud Computing offers something new to Programmers: the ability to programmatically control their IT infrastructure. Using an API, Programmers can skin the functionality provided by Clouds as well as develop “intelligent” applications that scale dynamically, for example.
5. Empower your IT Staff – Be sure that you don’t ignore your IT Staff as you look at the Cloud as a physical IT infrastructure alternative. They have some best practices and standards that should be incorporated in what your IT strategies will be. Let them experiment with the Cloud so that they fully grasp what it can do for your organization. They may tell you that it is a great direction to go in, or, they may say that your current infrastructure simply cannot be ported to the Cloud. There may also be some hybrid solutions (like GoGrid’s Cloud Connect) that will give them the best of both worlds.

These are just a few Cloud Computing New Year’s 2009 Resolutions to get you thinking. What are your business resolutions for 2009?

After about a year of Cloud Computing under my belt, analyzing trends in the market, talking with various professionals as well as customers in the space and watching our own Cloud Computing product, GoGrid, take off as a Cloud Computing leader and innovator, I feel that it is time to make some 2009 predictions for Cloud Computing. Who would have guessed that 2008 would have been “The Year of the Cloud“? I think that 2009 will be “The Year of the CLOUDS” (emphasis on multiple).

A Quick Look Back

If you look back to January 2008, the players in Cloud Computing were few are far between. Obviously, Amazon was breaking ground in establishing themselves as the front-runner at that time. But the term was too new and largely undefined. One of my first blog posts discussed some trends of grid computing, virtualization & virtualized hosting, cloud computing and “green hosting.” For the most part, many of those concepts have not changed. Rather, they have evolved, grown and become more established as leading technologies for the future. As of the writing of that article, GoGrid was still in Private Beta, but with well over 2 years of development getting it ready for prime time.

Virtualization was definitely the buzzword of the beginning of 2008, mainly because it was something that people could fairly easily understand. There were several desktop virtualization products available for users to host different OS’s within their own OS. As Jeff Kaplan predicted, On-Demand services started to really take off for several reasons that are applicable even today (if not more so). His number 1 reason: “Services are Recession Proof” (more about that later in my predictions). While Jeff’s ideas were largely focused on SaaS, there is a lot to be said when you apply them to Cloud Computing in general.

Close to when GoGrid was launched at the end of March 2008, coincidentally(?) the search term “Cloud Computing” (according to Google Insight) really started a strong upward trend within World Wide Searches:

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Today I read Mary Brandel’s article in Computerworld titled “Stormy Weather: 7 Gotchas in Cloud Computing” which discusses some of the possible issues related to turning to the Cloud for your application or site hosting needs. First, I agree (and actually like) the reference to “Cloud Computing” being like a pop song getting stuck in your head…it is a frequently (over)used buzzword swirling around the media and blogosphere. The article goes on to discuss about some hurdles or pitfalls surrounding this evolving technology. (I almost added “trend” to that previous sentence but then reminded myself, this is not a trend but rather a solid alternative to traditional IT technology.)

To briefly recap the 7 Gotchas that Brandel discusses:

1. Costs, Part I: Cloud Infrastructure Providers
2. Costs, Part II: Cloud Storage Providers
3. Sudden Code Changes
4. Service Disruptions
5. Vendor Expertise
6. Global Concerns
7. Non-Native Applications

So let’s quickly dive into each of these items from a Cloud Computing Vendor’s perspective, that of GoGrid.

Costs, Part I: Cloud Infrastructure Providers

At the end of this discussion of high CapEx via purchasing hardware infrastructures versus “pay by the drink” method of Cloud Computing, a hybrid approach was discussed. Putting all of your IT infrastructure physically in a datacenter that you manage, OR, hosting everything entirely “in the cloud” might not be the best option on their own exclusively. It does make sense from a cost perspective to put everything in the Cloud but there is a possibility (depending on the cloud provider) that the throughput of high I/O servers might not meet your needs. Thus, a hybrid infrastructure might be a more logical solution (put your high-performance DB servers in a dedicated, managed environment and your elastic or dynamic resources, such as web or app servers, in the Cloud). For example, take a look at GoGrid’s offering called “Cloud Connect” which give the ability to link dedicated environments with the Cloud.

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Laura Sydell, of NPR’s All Things Considered, yesterday covered Cloud Computing in her piece “Computing in The Clouds: Who Owns Your Files?“. It’s good to see NPR making an attempt to cover critical technologies. I have found, however, than much of the time, NPR does stories that are more science related (e.g., thermo-power, developments in genetics, etc.) and less so on technology that affect computing. I guess, for one, they have a much different demographic than the one I am used to. But of course, working in San Francisco, we exist in a technology bubble. Travel slightly outside of that bubble and people don’t know what the “cutting edge” of technology is (with some geographic exceptions, of course).

So, when NPR starts to mention “the Cloud,” I get intrigued. They briefly covered it in this interesting piece on cloud computing as a “pay-as-you-go” enterprise. I understand that it will take time for others to hear about Cloud technology and even longer to understand and adopt it. But the interesting thing is, many people have been using it for some time, albeit named differently. For several years, the term “ASP” (Application Service Provider) was kicked around and equated to providing an application over the Internet. This recently evolved into Software as a Service (SaaS) which has strong adoption within the tech arena with providers of SaaS products growing daily. Now, the Cloud rolls in and we see companies working to position themselves within it.

Sydell’s story focuses on data ownership and User Agreements as they relate to Cloud Applications. What is a Cloud Application? Well, if you have read through some of my previous posts, I introduced my concept of the “Cloud Pyramid” which segments different Cloud offerings into various categories: Applications, Platforms and Infrastructure. Recently, I expanded that image to include Cloud Aggregators and Cloud Extenders (details here).

But getting back to the NPR piece, I think what is important here is that they are showing their readers/listeners that they are already using the Cloud in one form or another, through Gmail or Flickr for example. What is unfortunate is that they stop there and almost introduce a paranoia into the mix. However, the points that are made are good ones to think about, that of data ownership, security and SLAs (Service Level Agreements).

I would like to step through a few points that Sydell makes as well as some made by Harry Lewis (who contributed to the article). Specifically: (more…)

This insightful post on the RightScale blog recently got me thinking. The term “Cloud Computing” is much too vague. People want and need “slots” or “segments” where they can group things. This is how the mind operates through categorization and ordering. So, to possibly help with this, I would like to propose a “Cloud Pyramid” to help differentiate the various Cloud offerings out there.

There are other ways to display this hierarchy, however I elected to show it as a pyramid. For example, if one were to weight the graphic by the number of providers within each segment, the pyramid would be upside-down. The point here though is to show how these cloud segments build upon and are somewhat dependent upon each other. While they are directly related, they don’t require interdependence (e.g., a Cloud Application does not necessarily have to be built upon a Cloud Platform or Cloud Infrastructure). I would propose, however, that Cloud trends indicate that they will become more entwined over time.

Cloud Application

Within this part of the pyramid, users are truly restricted to only what the application is and can do. Some of the notable companies here are the public email providers (Gmail, Hotmail, Quicken Online, etc.). Almost any Software as a Service (SaaS) provider can be lumped into this group. Most retail consumers use the services within this Cloud. You get pre-defined functionality and you cannot much further than that. Applications are designed for ease of use and GTD (getting things done). SalesForce, a huge Cloud Application/SaaS provider that has led the way for hosted software, falls into this category as well, however, their force.com product does not. Even online banking offerings could be lumped into this group.

Characteristics:

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