GMO Cloud

A Look at Cloud Computing Efficiency

Whenever you hear anyone talk about cloud computing, one of the biggest reasons most people bring up for moving to the cloud is that it is so much more efficient. Generally when people say this, they are thinking in terms of it costing less for staff and hardware to run a program in the cloud instead of at your own mainframe. But what about energy efficiencies?

There was an analysis done recently by WSP Environment & Energy that took a look at just this question for in-house data centers. Jonathan Koomey at GigaOm discussed this recently on his blog, and the findings should be of interest to more than just WSP’s client Salesforce.com. Looking at the per-transactions cost, they found on average a 95% reduction in transmissions. That is a huge amount of savings, so let’s take a look at where those savings originated.

One of the biggest impacts was the economy of scale, not that surprising when you truly consider it. Just as you can spread the work over a larger server base, so too can you spread the cost. When it comes to fixed costs such as equipment inventory, the improvement of the centers airflow and other costs associated with assessing Power Usage Effectiveness, spreading this cost across a wider customer base and larger number of transactions allows for a greater efficiency. You also get the advantage in size by being able to hire specialists in energy conservation who will know all the latest technology and how to implement it.

Whenever flexibility comes up as a cost saver for moving to the cloud, generally the speaker is referring to the ability to use such techniques as virtualization to separate software from the structure of physical servers. This capability may indeed cut software costs, but it also cuts energy costs due to its ability to allow you to drop features that are not energy efficient or even route the software around dead servers, eliminating the need for multiple power supplies in these circumstances. You are delivering IT services, and so the death of one server does not have to impact your reliability or the energy needed to perform.

Another area of impact is the fact that your users are spread around the globe, giving a larger operation the ability to diversify its load at any given time or day. With users who have peak needs at various days and times the end result is that those facilities are running at a much higher capacity. If you were to run efficiency tests in a typical data center you would find that most servers run at between 5 and 15% capacity making them highly underutilized. When looking at the vast majority of major players in the cloud, you will see a server utilization range of 30 to 40%.

One of the biggest discussions within many enterprises is the tug of war between IT and facilities over the cost of energy. For an IT department, the question is always how they can expand the number of servers in order to assist in more and more complex operations. Facilities departments tend to see the skyrocketing cost of electricity as a threat to their budgets. Somewhere along the line, Operations gets caught in the middle, looking for a solution to a need. In the end what happens is that they find it easier to take out the corporate credit card and simply go to the cloud to get what they need, bypassing both departments. Since IT and Facilities are under the same budget in a cloud scenario, the economy of scale once again plays into a savings of energy as it allows operations to get what it needs in a timely manner and within their budget. Problem solved, without the inter-department headaches.

As time goes on these savings in energy, when placed alongside the cost efficiencies of staffing down and the reduction in hardware needs and software upgrades will make it hard to ignore the cloud. When the capital cost of a standard in-house facility, which is now standing at $25,000 per kilowatt, becomes unthinkable the move to the cloud will be inevitable for all but the largest or most security-sensitive enterprises, such as the financial market.

There are still a few kinks in the system, one being the question of liability for cloud outages and the other being the development of truly secure public clouds. For some that solution will be an expansion into a members only private cloud structure. But even with these, there will be energy cost savings worth making the pursuit worth the time and effort. The movement to the clouds with its cost efficiencies and energy savings is just starting to really take off. Where it will eventually lead us in the next few years will be an interesting journey.

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Five Simple Cloud Applications for Small Businesses

One of the basics of the cloud is that it has created a level playing field when it comes to competition between small and large businesses. Many of the first wave of cloud users were, in fact, innovative small businesses who saw the value of putting some aspects, if not all of their operations, in the cloud. Here are five good business operation areas for any small business to consider moving to the cloud.

1. Communication – This is a key tool for any business but can be a vital one for a small business. VoIP was one of the early applications of the cloud for communications, and then came online video conferencing. Today you can add cloud email, instant messaging, video chat and more to that arsenal. And the beauty of most of them is that they are not only often inexpensive to implement, they will make your business more efficient.

2. File Sharing – As business becomes more mobile and remote offices more common, being able to keep your files in the cloud just makes good sense. Your clients can access the information they need, your email will not get filled up with all those bulky and memory consuming attachments and you will soon find that being able to pull up that file of information you need at the snap of a button on your smartphone is habit forming, and good for business.

3. Software – Why should a small business have to spend all of its time and money keeping software up to date when it doesn’t need to? Put your operations in the cloud with web-based software or services and everyone in the company is always on same application and same version of that application. Collaborate online, share files back and forth, send notes through the net, it is all possible and not as out of reach as you may think.

4. Backup – The dreaded backup is something all small businesses should do and often don’t. The days of having the last person out the door turn on the tape-drive backup machine are gone – and good riddance. Now you can back up everything in the cloud so no matter what happens, fire, hurricane or break-in, you are covered. There is no worse feeling then realizing your entire business just went up in smoke because your backup was on the machine next to that smoking hulk that used to be your computer.

5. Customer service – Today there are so many great cloud-based CRM programs it is hard to even know where to start. The cloud is the perfect tool for customer service, and for many small businesses, customer service is key to success.

This is truly just scratching the surface of the many great ways that the cloud makes sense for any small business. While it is true that not every business needs the cloud, and not every aspect of a business should be in the cloud, many small businesses find that moving the daily operations into it has made them more efficient, cost effective and that the ROI is better than they expected.

What are some of your favorite small business cloud applications?

Our newsletters and blogs are written to provide you with tools and information to meet your IT and cloud solution needs. We invite you to engage in our online community by following us on Twitter @GMOCloud and ‘Liking’ us on Facebook.

Cloud Case for the Insurance Industry

The Insurance Industry, a risk-averse culture that has been slow to adapt to the cloud, is finding that there are some avenues where moving to the cloud is making a lot of sense. When it comes to SaaS (Software as a Service) and PaaS (Platform as a Service) the insurance industry can see some real opportunities for new efficiencies that have many of the traditional carriers looking at moving some elements of their business to the cloud.

Security, however, remains a major concern for many in the industry, and with good reason. “Recent headlines about major data breaches have by no means allayed insurers’ anxieties around client data confidentiality,” comments Aite Group Director of Research, Clark Troy. He does, however, point out that there are some applications, including new business, underwriting and claims solutions, along with some industry-specific needs such as monthly analytical scoring that are particularly well suited for the cloud. With the monthly analytical scoring, most systems are running only 12 days out of the year, making this the perfect application for the cloud as there is then no need to pay for the other 353 days of the year when the infrastructure will sit idle.

“The beauty of it is that it is vapor – you push a button and it’s there and the second you have completed your activity, you tear it down,” says Steve Byrne, VP of Agency and Field Automation Technology and acting CTO of Harleysville Insurance. Byrne stresses that the cloud has been particularly useful for software development and testing.

“To buy the hardware for test environments is extremely expensive and they will sit idle most of the time anyway, ” comments Byrne. The cloud allows a company to “quickly provision the needed resources, including platform, database and operating systems, and applications, required to support and develop testing activities.”

Another advantage of the cloud is when an insurance company is looking at the possibilities of new business ventures. This kind of exploration often requires having IT acquire and build out infrastructure to support the new venture, and if it does not succeed you are left with unwanted infrastructure. A good example of this is Harleysville Insurance’s current opportunity to explore the development of disaster recovery. The model for this type of use allows them to create and put on hold the required structure, until it is needed in a disaster. The end result: they only pay for it when they need it.

Although Byrne readily admits that he would be uncomfortable moving core data into the cloud at this point in time, the possibilities that it opens up for other types of ventures makes it a good fit for his industry in that regard.

Our newsletters and blogs are written to provide you with tools and information to meet your IT and cloud solution needs. We invite you to engage in our online community by following us on Twitter @GMOCloud and ‘Liking’ us on Facebook.

The Emergence of Applications as King in the Cloud

June’s Structure Conference in San Francisco was much more business and market dynamics centric in its look at the cloud than in previous years where the focus had always been on pure technology and services. This new focus gave coherence to the talks that had not been there before.

Unlike the previous year’s conferences where the preponderance of “vaporware” overshadowed all else, this year saw vendors with real products and services and customers who had experiences with private and public cloud deployments. What a difference a year makes.

One of the biggest changes was from a focus in 2009 on “virtual machines” and 2010 on “workloads” to the current emphasis on “applications”. Everywhere you heard talk about the importance of supporting application development, integrating applications and the operation of applications in the cloud. Truly in 2011 applications was King.

If you accept the concept that cloud computing is an operations model and not a technology, then this development makes perfect sense. In the stack there is nothing that is truly “cloud”. For cloud, management and monitoring protocols are not changed because it is how you operate and provision these elements that make it cloud. And the secret to this is to make them on demand and with the ability to scale appropriately.

Cloud is not just an operations model – it is an application centric operations model. As we have witnessed in the past year, IT is moving slowly towards an application-centric operations model and away from the old server centric model. The end result will be management and monitoring tasks that are defined by and targeted at the application itself instead of the infrastructure that is underlying.

This leads to an interesting corollary. If clouds are application-centric, then the perspective of the application must be considered when reviewing the problems resolved by cloud solutions. Or to look at it another way, it is a short-term solution to develop a tool specifically for virtual machine management in the cloud. Sooner or later managing a guest operating system in a virtual machine will become unworkable as the application begins to hide the containers in which it runs.

However a disruptive concept that has tremendous promise is the development of tools in the cloud model that have the development, deployment and operations of code and data, in essence displacing the old server-centric model of the past. In terms of operations, very few enterprises have the tools and processes for this concept. At least today.

There are a few application-centric tools for cloud around, such as EnStratus or RightScale. Although each of these is looking to provide tools for managing applications across disparate cloud systems, they tend to still be a trifle VM-centric. At least from this point of view. But then again most applications are built and deployed these days as an end product of this VM viewpoint.

There are several approaches one can take that would make an application-centric approach achievable:

• The development and use of application management tools for deployment of IaaS
• These should include both development platforms tools and cloud management tools (such as those illustrated above)
• Operation tasks should be organized around operations and not server groups
• When you create platforms as a service environment, ensure that they hide operation tasks, freeing you to focus on the application itself
• Make use of SaaS model vendors instead of building your own applications, so that except for the use of the application, your vendor operates all aspects of the application for you

Keep in mind that even with application-centric operations you will still require an ability to deliver the service that the application is deployed to and the infrastructure that supports this service. This includes the delivery of the application itself when deploying SaaS. Remember that managed services and data center operations become the responsibility of the cloud provider, whether it is public or private, and not the end user.

At the end of the day the center of this difficult cultural change for many IT departments is the concept of separating concerns in operations. The good thing is that this resulting change will give business units the true ability to focus on business functionality. This is the gain from making applications the center of the cloud computing universe.

Our newsletters and blogs are written to provide you with tools and information to meet your IT and cloud solution needs. We invite you to engage in our online community by following us on Twitter @GMOCloud and ‘Liking’ us on Facebook.

Three Common Concerns Moving Your Business to the Cloud

With news of sites being hacked and other disturbing events on the web, is it any wonder that many businesses are apprehensive about moving their business into the cloud? Yet despite these events experts are predicting a large increase in the number of businesses that are planning to move to the cloud in the next few years. The reason is obvious, with the cloud making possible custom IT services simply and quickly at a lower cost every business, whether a start-up or established company, wants to move to the cloud.

There are still some businesses that are holding back, primarily because of fear or lack of information. There are three primary areas where knowledge of the risks and how to combat them can help any business decide if moving to the cloud is right for them.

Security – Cloud computing can be seen as more vulnerable to online attacks than the alternative of storing data on the company’s private servers because of being based on the Internet. While this sounds logical, the actual situation is that having dedicated staff ensuring cloud security and setting security standards will give you a higher level of security and is more reliable. To be sure that a cloud service provider’s security is at the level you need, examine their security policy. You can also stay in touch with the latest in cloud security through The Cloud Security Alliance which is a collaboration of cloud experts who are actively promoting best standards and practices for security assurance in the cloud computing community.

Compatibility – This is another issue which often holds back larger organizations and enterprises from moving forward with cloud technology. Sometimes the existing IT configuration is too complicated to restructure for compatibility with cloud technology. When this happens, often the best solution is the hybrid cloud to give the business the best of both worlds. Often a third party provider is brought into the picture to provide assistance in handling the transition that will dramatically reduce time and costs for both personnel and technology for the business.

Availability – Many businesses express concern about the degree that cloud data will be available to them. This is of particular concern when it comes to data and service interruptions because businesses may be used to their servers being in close physical proximity and control. The best way to approach this is to discuss with the provider and assess the risks involved along with risk management responsibilities for each of the parties.

In the final analysis, cloud computing for each business can only be undertaken once all of the IT advantages and disadvantages along with the business impact it will have are taken into account. The determination of what the business is looking to achieve from cloud computing along with a discussion with your cloud provider regarding security risks can help any business to configure the cloud environment that works best for their particular business context.

Our newsletters and blogs are written to provide you with tools and information to meet your IT and cloud solution needs. We invite you to engage in our online community by following us on Twitter @GMOCloud and ‘Liking’ us on Facebook.