Cloud Computing

Overview
• Introduction to Cloud Computing • Data Management in Cloud Computing
1 Overview of Computing 1 Looking at Data, Scalability & Cloud
2 Cloud Computing (NIST Model) Services
3 Properties, Characteristics & Disadvantages 2 Database & Data Stores in Cloud
4 Role of Open Standards 3 Large Scale Data Processing
• Cloud Computing Architecture • Cloud Security
1 Cloud computing stack 1 Infrastructure Security
2 Service Models (XaaS)
2 Data security and Storage
1 Infrastructure as a Service(IaaS)
2 Platform as a Service(PaaS)
3 Identity and Access Management
3 Software as a Service(SaaS) 4 Access Control, Trust, Reputation, Risk
3 Deployment Models
• Service Management in Cloud Computing • Case Study on Open Source and
Service Level Agreements(SLAs) Commercial Clouds, Cloud Simulator
Cloud Economics
• Research trend in Cloud Computing,
• Resource Management in Cloud
Computing Fog Computing
Origins and Influences

“If computers of the kind I

have advocated become
the computers of the
The idea of computing in a
future, then computing
“cloud” traces back to the
may someday be organized
origins of utility computing,
A Brief History: as a public utility just as the
a concept that computer
telephone system is a
scientist John McCarthy
public utility. ... The
publicly proposed in 1961:
computer utility could
become the basis of a new
and important industry.”
 In 1969, Leonard Kleinrock, a “As of now, computer
chief scientist of the Advanced networks are still in their
Research Projects Agency infancy, but as they grow up
Network or ARPANET project and become sophisticated, we
that seeded the Internet, will probably see the spread of
stated: ‘computer utilities’ ...”.
The definition that received industry-wide acceptance was composed by the
National Institute of Standards and Technology (NIST).

NIST published its original definition back in 2009, followed by a revised version
after further review and industry input that was published in September of 2011:

“Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a
shared pool of configurable computing resources (e.g., networks, servers, storage, applications,
and services) that can be rapidly provisioned and released with minimal management effort or
service provider interaction. This cloud model is composed of five essential characteristics, three
service models, and four deployment models.”
A Gartner report listing cloud computing at the top of its strategic technology areas further
reaffirmed its prominence as an industry trend by announcing its formal definition as:

“...a style of computing in which scalable and elastic IT-enabled capabilities are delivered as a
service to external customers using Internet technologies.”

Forrester Research provided its own definition of cloud computing as:

...a standardized IT capability (services, software, or infrastructure) delivered via Internet

technologies in a pay-per-use, self-service way.
• The general public has been leveraging forms of
Internet-based computer utilities since the mid-
1990s
• search engines (Yahoo!, Google), e-mail services
(Hotmail, Gmail), open publishing platforms
(MySpace, Facebook, YouTube), and other types
of social media (Twitter, LinkedIn).
• A slightly different evocation of the term
“Network Cloud” or “Cloud” was introduced in
the early 1990s
• It referred to an abstraction layer derived in the
delivery methods of data across heterogeneous
public and semi-public networks
• The networking method at this point supported
the transmission of data from one end-point
(local network) to the “Cloud” (wide area
network)
Definitions

In the late 1990s,

In 2002, Amazon.com
Salesforce.com It wasn’t until
launched the Amazon Web
pioneered the 2006 that the
Services (AWS) platform, a
notion of term “cloud
suite of enterprise-oriented
bringing computing”
services that provide remotely
remotely emerged in the
provisioned storage,
provisioned commercial
computing resources, and
services into the arena
business functionality.
enterprise.

It was during this time that Amazon launched its Elastic Compute Cloud
(EC2) services that enabled organizations to “lease” computing capacity
and processing power to run their enterprise applications.

Google Apps also began providing browser-based enterprise applications

in the same year, and three years later, the Google App Engine became
another historic milestone
Business Drivers
• Several of the primary business drivers that fostered modern
cloudbased technology
• Capacity Planning
• • Lead Strategy – adding capacity to an IT resource in anticipation of demand
• Lag Strategy – adding capacity when the IT resource reaches its full capacity
• Match Strategy – adding IT resource capacity in small increments, as
demand increases
• Cost Reduction
• Organizational Agility
Technology Innovations
• The pre-existing technologies considered to be the primary influences
on cloud computing
• Clustering:
• A cluster is a group of independent IT resources that are interconnected and
work as a single system.
• System failure rates are reduced while availability and reliability are
increased, since redundancy and failover features are inherent to the cluster
• A general prerequisite of hardware clustering is that its component systems
have reasonably identical hardware and operating systems
• Component devices that form a cluster are kept in synchronization through
dedicated, high-speed communication links
• Grid Computing
• a platform in which computing resources are organized into one or more logical
pools.
• Grid computing differs from clustering in that grid systems are much more loosely
coupled and distributed
• grid computing systems can involve computing resources that are heterogeneous and
geographically dispersed
• grid computing projects have influenced various aspects of cloud computing
platforms and mechanisms
• networked access, resource pooling, and scalability and resiliency
• grid computing is based on a middleware layer that is deployed on computing
resources
• load balancing logic, failover controls, and autonomic configuration management
• Virtualization
• Virtualization represents a technology platform used for the creation of
virtual instances of IT resources.
• A layer of virtualization software allows physical IT resources to provide
multiple virtual images of themselves so that their underlying processing
capabilities can be shared by multiple users.
• The virtualization process severs this software-hardware dependency, as
hardware requirements can be simulated by emulation software running in
virtualized environments
• As a foundation of contemporary cloud technology, modern virtualization
provides a variety of virtualization types and technology layers
Technology Innovations vs. Enabling
Technologies
• It is essential to highlight several other areas of technology that continue to
contribute to modern-day cloudbased platforms
• Broadband Networks and Internet Architecture
• Data Center Technology
• (Modern) Virtualization Technology
• Web Technology
• Multitenant Technology
• Service Technology
• The primary business drivers that exposed the need for cloud computing and led
to its formation include capacity planning, cost reduction, and organizational
agility.
• The primary technology innovations that influenced and inspired key
distinguishing features and aspects of cloud computing include clustering, grid
computing, and traditional forms of virtualization.
Trends in Computing
• Distributed Computing: is a collection of independent computers,
interconnected via a network, capable of collaborating tasks
• Distributed computing: Field of computing science that studies distributed
system. Use of distributed systems to solve computational problems.

• Distributed system (Wikipedia)

• There are several autonomous computational entities, each of
which has its own local memory.
• The entities communicate with each other by message passing.

• Operating System Concept:

• The processors communicate with one another through various
communication lines, such as high-speed buses or telephone
lines.
• Each processor has its own local memory.
Common properties of Distributed Computing

Each node play partial role

When one or some nodes Each computer has only a
fails, the whole system can Need to check the status of limited, incomplete view of
Fault tolerance:
still work fine except each node the system.
performance. Each computer may know
only one part of the input.

Resource sharing Performance

Load Sharing Easy to expand
Each user can share the Parallel computing can be
Dispatching several tasks to We expect to use few time
computing power and considered a subset of
each nodes can help share when adding nodes. Hope
storage resource distributed
loading to spend
in the system with other
to the whole system. no time if possible.
users
Why Distributed Computing?
Nature of application

Performance
Computing intensive The task could consume a lot of time on computing.
For example, Computation of Pi value using Monte Carlo simulation
Data intensive
The task that deals with a large amount or large size of files. For example,
Facebook, LHC(Large Hadron Collider) experimental data processing.
Robustness
No SPOF (Single Point Of Failure) Other nodes can execute the same task executed
on failed node.
Distributed applications
• Applications that consist of a set of processes that are distributed
across a network of machines and work together as an ensemble
to solve a common problem
• In the past, mostly client-server
Resource management centralized at the server
• Peer to Peer computing represents a movement towards more
truly distributed applications
Grid Computing
• Pcwebopedia.com
A form of networking. unlike conventional networks that focus on
communication among devices, grid computing harnesses
unused processing cycles of all computers in a network for
solving problems too intensive for any stand-alone machine
• IBM
Grid computing enables the virtualization of distributed
computing and data resources such as processing, network
bandwidth and storage capacity to create a single system image,
granting users and applications seamless access to vast IT
capabilities. Just as an Internet user views a unified instance of
content via the Web, a grid user essentially sees a single, large
virtual computer.
• Sun Microsystems
Grid Computing is a computing infrastructure that provides
dependable, consistent, pervasive and inexpensive access to
Electrical Power Grid Analogy
Electrical Power Grid Computing Grid

• Users (or electrical appliances) • Users (or client applications) gain

get access to electricity access to computing resources
(processors, storage, data,
through wall sockets with no applications, and so on) as needed with
care or consideration for where little or no knowledge of where those
or how the electricity is resources are located
actually generated. or what the underlying technologies,
hardware, operating system, and so on
• The power grid links together are.
power plants of many different • The Grid" links together computing
kinds resources (PCs, workstations, servers,
storage elements) and provides the
mechanism needed to access them.
When we use Grid?
• Share more than information: Data, computing power,
applications in dynamic environment, multi-institutional, virtual
organizations
• Efficient use of resources at many institutes. People from many
institutions working to solve a common problem (virtual
organization).
• Join local communities.
• Interactions with the underneath layers must be transparent and
seamless to the user.
Need of Grid Computing?

• Todays Science/Research is based on computations, data

analysis, data visualization & collaborations
• Computer Simulations & Modelling are more cost effective than
experimental methods
• Scientific and Engineering problems are becoming more complex
& users need more accurate, precise solutions to their problems
in shortest possible time
• Data Visualization is becoming very important Exploiting under
utilized resources
Who uses
Grid
Computin
g?
Type of Grids

• Computational Grid: These grids provide secure access to huge pool

of shared processing power suitable for high throughput applications
and computation intensive computing.
• Data Grid: Data grids provide an infrastructure to support data
storage, data discovery, data handling, data publication, and data
manipulation of large volumes of data actually stored in various
heterogeneous databases and file systems.
• Collaboration Grid: With the advent of Internet, there has been an
increased demand for better collaboration. Such advanced collaboration
is possible using the grid. For instance, persons from different
companies in a virtual enterprise can work on different components of a
CAD project without even disclosing their proprietary technologies.
Network Grid: A Network Grid provides fault-
tolerant and high-performance communication
services. Each grid node works as a data router
between two communication points, providing
data-caching and other facilities to speed up
the communications between such points.

Utility Grid: This is the ultimate form of the

Grid, in which not only data and computation
cycles are shared but software or just about
any resource is shared. The main services
provided through utility grids are software and
special equipment. For instance, the
applications can be run on one machine and all
the users can send their data to be processed
to that machine and receive the result back
Cluster Computing

What is Cluster Computing?

Key components of a cluster
A cluster is a type of parallel or
include multiple standalone
distributed computer system,
computers (PCs, Workstations, or
which consists of a collection of
SMPs), operating systems, high-
inter-connected stand-alone
performance interconnects,
computers working together as a
middleware, parallel programming
single integrated computing
environments, and applications.
resource .

Clusters are usually deployed to In a typical cluster:

improve speed and/or reliability Network: Faster, closer connection
over that provided by a single than a typical network (LAN)
computer, while typically being Low latency communication
much more cost effective than protocols
single computer the of Loosely coupled than SMP
comparable speed or reliability
Types of Cluster &
Components

• High Availability or Fail-over

Clusters
1. Load Balancing Cluster
2. Parallel/Distributed Processing
Clusters
• Cluster Components: Basic
building blocks of clusters are broken
down into multiple categories:
1. Cluster Nodes
2. Cluster Network
3. Network Characterization
Key Operational Benefits of
Clustering
• System availability: offer inherent high system availability due to
the redundancy of hardware, operating systems, and
applications.
• Hardware fault tolerance: redundancy for most system
components (eg. disk-RAID), including both hardware and
software.
• OS and application reliability: run multiple copies of the OS and
applications, and through this redundancy
• Scalability. adding servers to the cluster or by adding more
clusters to the network as the need arises or CPU to SMP.
• High performance: (running cluster enabled programs)
Utility Computing

• Utility Computing is purely a concept which cloud computing

practically implements.
• Utility computing is a service provisioning model in which a
service provider makes computing resources and infrastructure
management available to the customer as needed, and charges
them for specific usage rather than a flat rate.
• This model has the advantage of a low or no initial cost to
acquire computer resources; instead, computational resources
are essentially rented.
• The word utility is used to make an analogy to other services,
such as electrical power, that seek to meet fluctuating customer
needs, and charge for the resources based on usage rather than
on a flat-rate basis.
• "Utility computing" has usually envisioned some form of
virtualization so that the amount of storage or computing power
available is considerably larger than that of a single time-sharing
computer.
• Pay-for-use Pricing Business Model
2 Data Center Virtualization and Provisioning
3 Solves Resource Utilization Problem
4 Outsourcing
5 Web Services Delivery
6 Automation
Utility Computing Example: On-Demand Cyber Infrastructure
Utility Solution Your Perspective
Utility Computing Payment Models
• Same range of charging models as other utility providers: gas,
electricity, telecommunications, water, television broadcasting
Flat rate
Tiered
Subscription
Metered
Pay as you go
Standing charges
• Different pricing models for different customers based on factors
such as scale, commitment and payment frequency
• But the principle of utility computing remains
• The pricing model is simply an expression by the provider of the
costs of provision of the resources and a profit margin
Risks in a UC World

1. Data Backup
2. Data Security
3. Partner Competency
4. Defining SLA

5. Getting value from charge back

Defining Cloud Computing

• Cloud computing refers to applications and services that run on a distributed

network using virtualized resources and accessed by common Internet
protocols and networking standards
• Two different classes of clouds: those based on the deployment model and
those based on the service mode
• The deployment model tells you where the cloud is located and for what
purpose.
1. Public
2. Private
3. community, and hybrid clouds are deployment models.
• Service models describe the type of service that the service provider is
offering.
1. Software as a Service,
2. Platform as a Service
Defining Cloud Computing

• Cloud computing represents a real paradigm shift in the way in

which systems are deployed.
• Cloud computing makes the long-held dream of utility computing
possible with a pay-as-you-go, infinitely scalable,
universally available system.
• Not all applications benefit from deployment in the cloud.
1. Issues with latency,
2. transaction control, and in particular security and regulatory compliance
are of particular concern.
• Cloud computing takes the technology, services, and applications
that are similar to those on the Internet and turns them into a
self-service utility.
Defining Cloud Computing

• The use of the word “cloud” makes reference to the two

essential concepts:
Abstraction:
1. Cloud computing abstracts the details of system implementation from
users and developers.
2. Applications run on physical systems that aren’t specified, data is stored
in locations that are unknown, administration of systems is outsourced to
others, and access by users is ubiquitous.
Virtualization:
3. Cloud computing virtualizes systems by pooling and sharing resources.
4. Systems and storage can be provisioned as needed from a centralized
infrastructure, costs are assessed on a metered basis, multi-tenancy is
enabled, and resources are scalable with agility.
Defining Cloud Computing

• To help clarify how cloud computing has changed the nature of

commercial system deployment, consider these three examples:
• Google: In the last decade, Google has built a worldwide network of
datacenters to service its search engine. In doing so Google has
captured a substantial portion of the world’s advertising revenue
(Software as a Service)
• Azure Platform: By contrast, Microsoft is creating the Azure Platform.
It enables .NET Framework applications to run over the Internet as an
alternate platform for Microsoft developer software running on desktops
• Amazon Web Services: One of the most successful cloud-based
businesses is Amazon Web Services, which is an Infrastructure as a
Service offering that lets you rent virtual computers on Amazon’s own
infrastructure.
Cloud Types
• Most people separate cloud computing into two distinct sets of models:
1. Deployment models: This refers to the location and management of
the cloud’s infrastructure.
2. Service models: This consists of the particular types of services that
you can access on a cloud computing platform.

NIST model
• The U.S. National Institute of Standards and Technology (NIST) has a set
of working definitions (
http://csrc.nist.gov/groups/SNS/cloudcomputing/cloud-def-v15.doc ) that
separate cloud computing into service models and deployment models.
• The latest version of the NIST definition does require that cloud
computing networks use virtualization and support multi-tenancy
Deployment models

• The NIST definition for the four deployment models is as follows:

1. Public cloud: The public cloud infrastructure is available for public use
alternatively for a large industry group and is owned by an organization selling
cloud services.
2. Private cloud: The private cloud infrastructure is operated for the exclusive use of
an organization. The cloud may be managed by that organization or a third party.
Private clouds may be either on- or off-premises.
3. Hybrid cloud: A hybrid cloud combines multiple clouds (private, community of
public) where those clouds retain their unique identities, but are bound together as
a unit. A hybrid cloud may offer standardized or proprietary access to data and
applications, as well as application portability.
4. Community cloud: A community cloud is one where the cloud has been organized
to serve a common function or purpose. It may be for one organization or for
several organizations, but they share common concerns such as their mission,
policies, security, regulatory compliance needs, and so on. A community cloud may
be managed by the constituent organization(s) or by a third party.
Service models

• Three service types have been universally accepted:

1. Infrastructure as a Service: IaaS provides virtual machines, virtual storage,
virtual infrastructure, and other hardware assets as resources that clients can
provision.
2. Platform as a Service: PaaS provides virtual machines, operating systems,
applications, services, development frameworks, transactions, and control
structures.
3. Software as a Service: SaaS is a complete operating environment with
applications, management, and the user interface.
• The three different service models taken together have come to be known as the
SPI model of cloud computing.
• Many other service models have been mentioned
• StaaS, Storage as a Service; IdaaS, Identity as a Service; CmaaS,
Compliance as a Service; and so forth
Service models

• It is useful to think of cloud computing’s service models in terms of a

hardware/software stack
• At the bottom of the stack is the hardware or infrastructure that comprises
the network
• As you move upward in the stack, each service model inherits the
capabilities of the service model beneath it
• IaaS has the least levels of integrated functionality and the lowest levels of
integration, and SaaS has the most
• Examples of IaaS service providers include:
1. Amazon Elastic Compute Cloud (EC2)
2. Eucalyptus
3. GoGrid, FlexiScale, Linode, RackSpace Cloud, Terremark
• All these vendors offer direct access to hardware resources.
Service models
• A PaaS service adds integration features, middleware, and other
orchestration and choreography services to the IaaS model.
• Examples of PaaS services are:
1. Force.com
2. GoGrid CloudCenter
3. Google AppEngine
1. Windows Azure Platform
• Other good examples of SaaS cloud service providers are:
1. GoogleApps
2. Oracle On Demand
3. SalesForce.com
4. SQL Azure
Service models

• For example, SalesForce.com started out as a

Customer Relationship Management SaaS
platform that allowed clients to add their own
applications.
• Over time SalesForce.com opened an API called
the Force API that allowed developers to create
applications based on the SalesForce.com
technologies
• Force.com is thus their PaaS service
Examining the Characteristics of Cloud
Computing
• Cloud computing builds on so many older concepts in computer
technology that it can be hard for people newly introduced to the
concept to grasp that it represents a paradigm shift in
computing.
Paradigm shift
• When you choose a cloud service provider, you are renting or
leasing part of an enormous infrastructure of datacenters,
computers, storage, and networking capacity.
Benefits of cloud computing
1.On-demand self-service: A client can provision computer resources without the
need for interaction with cloud service provider personnel.
2. Broad network access: Access to resources in the cloud is available over the
network using standard methods in a manner that provides platform-independent
access to clients of all types.
(This includes a mixture of heterogeneous operating systems, and thick and thin
platforms such as laptops, mobile phones, and PDA.)
3. Resource pooling: A cloud service provider creates resources that are pooled
together in a system that supports multi-tenant usage.
• (Physical and virtual systems are dynamically allocated or reallocated as needed.
Intrinsic in this concept of pooling is the idea of abstraction that hides the
location of resources such as virtual machines, processing, memory, storage, and
network bandwidth and connectivity.)
4. Rapid elasticity: Resources can be rapidly and elastically provisioned.
• (The system can add resources by either scaling up systems (more powerful
computers) or scaling out systems (more computers of the same kind), and
scaling may be automatic or Manual)
Benefits of cloud computing

5.Measured service: The use of cloud system resources is measured, audited, and
reported to the customer based on a metered system.
(A client can be charged based on a known metric such as amount of storage used,
number of transactions, network I/O (Input/Output) or bandwidth, amount of processing
power used, and so forth. A client is charged based on the level of services provided.)
• While these five core features of cloud computing are on almost anybody’s list, you also
should consider these additional advantages
1. Lower costs:
2. Ease of utilization:
3. Quality of Service
4. Reliability
5. Outsourced IT management
6. Simplified maintenance and upgrade
7. Low Barrier to Entry
Disadvantages of cloud computing

• While the benefits of cloud computing are myriad, the disadvantages are just as numerous.
1. As a general rule, the advantages of cloud computing present a more compelling case for
small organizations than for larger ones. Larger organizations can support IT staff and
development efforts that put in place custom software solutions that are crafted with their
particular needs in mind.
2. When you use an application or service in the cloud, you are using something that isn’t
necessarily as customizable as you might want. Additionally, although many cloud computing
applications are very capable, applications deployed on-premises still have many more
features than their cloud counterparts.
3. All cloud computing applications suffer from the inherent latency that is intrinsic in their WAN
connectivity. While cloud computing applications excel at large-scale processing tasks, if your
application needs large amounts of data transfer, cloud computing may not be the best model
for you
4. Additionally, cloud computing is a stateless system, as is the Internet in general. In order for
communication to survive on a distributed system, it is necessarily unidirectional in nature. All
the requests you use in HTTP: PUTs, GETs, and so on are requests to a service provider. The
service provider then sends a response.
5. If you had to pick a single area of concern in cloud computing, that area would undoubtedly be
privacy and security
Assessing the Role of Open Standards

• The cloud computing industry is working with these architectural standards

1. Platform virtualization of resources
2. Service-oriented architecture
3. Web-application frameworks
4. Deployment of open-source software
5. Standardized Web services
6. Autonomic systems
7. Grid computing
• These standards help to enable different business models that cloud
computing vendors can support, most notably Software as a Service (SaaS),
Web 2.0 applications, and utility computing.
• These businesses require open standards so that data is both portable and
universally accessible.
Chapter 2: Assessing the Role of Open
Standards
• The race to create the first generation of open cloud platform technologies that will
compete with proprietary technologies offered by companies such as Microsoft (Azure
Platform) and Vmware (vSphere) is already underway
• Rackspace.com, one of the large IaaS cloud service providers, announced in July 2010
that it is initiating an open-source project called OpenStack that will begin with the
code used to run its Cloud Files and Cloud Servers technologies.
• OpenStack.org’s home page ( http://www.openstack.org/ )
Assessing the Value Proposition

• Eucalyptus ( http://open.eucalyptus.com/) is a Linux-based software platform for creatingcloud computing

IaaS systems based on computer clusters
• •The project has an interface that can connect to Amazon’s compute and storage cloud systems (EC2 and S3),
and it maintains a private cloud as a sandbox for developers to work in.
• Eucalyptus works with a number of technologies for system virtualization, including VMware, Xen, and KVM.
• OpenStack and Eucalyptus are by no means unique; several other projects are underway to createopen-
source cloud platforms.
• The IEEETechnical Committee on Services Computing (http://tab.computer.org/tcsc/) sponsors a conference
in this area called CLOUD
Assessing the Value Proposition

• Cloud computing is particularly valuable because it

shifts capital expenditures into operating expenditures
• Service Level Agreements (SLAs) are an important
aspect of cloud computing. They are essentially your
working contract with any provider.
• A cloud is an infrastructure that can be partitioned and
provisioned, and resources are pooled and virtualized.
• These are the unique characteristics of an ideal cloud
computing model:
Measuring the Cloud’s Value

• Cloud computing presents new opportunities to users and developers

because it is based on the paradigm of a shared multitenant utility.
• A cloud is defined as the combination of the infrastructure of a datacenter
with the ability to provision hardware and software.
1. A service that concentrates on hardware follows the Infrastructure as a
Service (IaaS) model

2. When you add a software stack, such as an operating system and

applications to the service, the model shifts to the Software as a Service
(SaaS) model.

3. When the service requires the client to use a complete

hardware/software/application stack, it is using the most refined and
restrictive service model, called the Platform as a Service (PaaS) model.
Measuring the Cloud’s Value

• These are the unique characteristics of an ideal cloud computing model:

1. Scalability: You have access to unlimited computer resources as needed.

(This feature obviates the need for planning and provisioning. It also enables batch
processing, which greatly speeds up high-processing applications.)

2. Elasticity: You have the ability to right-size resources as required. This feature
allows you to optimize your system and capture all possible transactions.

3. Low barrier to entry: You can gain access to systems for a small investment.
( This feature offers access to global resources to small ventures and provides the
ability to experiment with little risk.)

4. Utility: A pay-as-you-go model matches resources to need on an ongoing basis.

This eliminates waste and has the added benefit of shifting risk from the client.
Measuring the Cloud’s Value
• The virtualization of pooled resources—processors or compute engines, storage, and network
connectivity—optimizes these investments and allows the cloud provider to pass along these
economies to customers.
• Companies become cloud computing providers for several reasons:
• Profit: The economies of scale can make this a profitable business.
• Optimization: The infrastructure already exists and isn’t fully utilized.
(This was certainly the case for Amazon Web Services.)
• Strategic: A cloud computing platform extends the company’s products and defends their
franchise.
( This is the case for Microsoft’s Windows Azure Platform.)
• Extension: A branded cloud computing platform can extend customer relationships by offering
additional service options.
(This is the case with IBM Global Services and the various IBM cloud services.)
• Presence: Establish a presence in a market before a large competitor can emerge.
(Google App Engine allows a developer to scale an application immediately. For Google, its
office applications can be rolled out quickly and to large audiences.)
• Platform: A cloud computing provider can become a hub master at the center of
many ISV’s (Independent Software Vendor) offerings.
(The customer relationship management provider SalesForce.com has a development platform
called Force.com that is a PaaS offering.)
Early adopters and new applications
• Cloud computing is still in its infancy, but trends in adoption are already evident.
• Top 10 adopters of cloud computing:
1.Messaging and team collaboration applications
2. Cross enterprise integration projects
3. Infrastructure consolidation, server, and desktop virtualization efforts
4. Web 2.0 and social strategy companies
5. Web content delivery services
6. Data analytics and computation
7. Mobility applications for the enterprise
8. CRM applications
9. Experimental deployments, test bed labs, and development efforts
10. Backup and archival storage
The laws of cloudonomics

1. Utility services cost less even though they cost more: Utilities charge a
premium for their services, but customers save money by not paying for services that
they aren’t using.
2. On-demand trumps forecasting: The ability to provision and tear down resources
(de-provision) captures revenue and lowers costs.
3. The peak of the sum is never greater than the sum of the peaks. A cloud can
deploy less capacity because the peaks of individual tenants in a shared system are
averaged over time by the group of tenants.
4. Aggregate demand is smoother than individual: Multi-tenancy also tends to
average the variability intrinsic in individual demand because the “coefficient of
random variables” is always less than or equal to that of any of the individual
variables. With a more predictable demand and less variation, clouds can run at
higher utilization rates than captive systems. This allows cloud systems to operate at
higher efficiencies and lower costs.
5. Average unit costs are reduced by distributing fixed costs over more units of
output: Cloud vendors have a size that allows them to purchase resources at
significantly reduced prices. (This feature was described in the previous section.)
The laws of cloudonomics

6. Superiority in numbers is the most important factor in the result of a combat

(Clausewitz): Weinman argues that a large cloud’s size has the ability to repel botnets and
DDoS attacks better than smaller systems do.
7. Space-time is a continuum (Einstein/Minkowski): The ability of a task to be
accomplished in the cloud using parallel processing allows realtime business to respond quicker
to business conditions and accelerates decision making providing a measurable advantage.
8. Dispersion is the inverse square of latency: Latency, or the delay in getting a response
to a request, requires both large-scale and multi-site deployments that are a characteristic of
cloud providers. Cutting latency in half requires four times the number of nodes in a system.
9. Don’t put all your eggs in one basket. The reliability of a system with n redundant
components and a reliability of r is 1-(1-r)n.
• Therefore, when a datacenter achieves a reliability of 99 percent, two redundant datacenters
have a reliability of 99.99 percent (four nines) and three redundant datacenters can achieve a
reliability of 99.9999 percent (six nines). Large cloud providers with geographically dispersed
sites worldwide therefore achieve reliability rates that are hard for private systems to achieve.
The laws of cloudonomics

• An object at rest tends to stay at rest (Newton). Private datacenters tend to be

located in places where the company or unit was founded or acquired.
• Cloud providers can site their datacenters in what are called “greenfield sites.” A
greenfield site is one that is environmentally friendly: locations that are on a network
backbone, have cheap access to power and cooling, where land is inexpensive, and the
environmental impact is low.
• A network backbone is a very high-capacity network connection. On the Internet, an
Internet backbone consists of the high-capacity routes and routers that are typically
operated by an individual service provider such as a government or commercial entity
• https://he.net/3d-map/
• http://www.nthelp.com/maps.htm/
Cloud computing obstacles
Behavioral factors relating to cloud adoption

• The “10 Laws of Behavioral Cloudonomics” are summarized below:

1. People are risk averse and loss averse. Ariely argues that losses are more painful than
gains are pleasurable. Cloud initiatives may cause the concerns of adoption to be weighed
more heavily than the benefits accrued to improving total costs and achieving greater agility.
2. People have a flat-rate bias. Loss aversion expresses itself by preferences to flat-rate
plans where risk is psychologically minimized to usage-based plans where costs are actually
less.
3. People have the need to control their environment and remain anonymous. The
need for environmental control is a primal directive. Loss of control leads to “learned
helplessness” and shorter life spans.
4. People fear change: Uncertainty leads to fear, and fear leads to inertia. This is as true for
cloud computing as it is for investing in the stock market.
5. People value what they own more than what they are given.
6. People favor the status quo and invest accordingly. There is a bias toward the way
things have been and a willingness to invest in the status quo that is out of line with their
current value.
Behavioral factors relating to cloud adoption

7. People discount future risk and favor instant gratification.

8. People favor things that are free. When offered an item that is free or another
that costs money but offers a greater gain, people opt for the free item.
9. People have the need for status. A large IT organization with substantial assets is
a visual display of your status; a cloud deployment is not.
10.People are incapacitated by choice. The Internet enables commerce to shift to a
large inventory where profit can be maintained by many sales of a few items each, the
so-called long tail.
• When this model is applied to cloud computing, people tend to be overwhelmed by the
choice and delay adoption.