2009 EXECUTIVE REPORT

What Cloud Computing Means to You:

Efficiency, Flexibility, Cost Savings
 What Cloud Computing Means to You: Efficiency, Flexibility, Cost Savings

What Cloud Computing Means to You:

Efficiency, Flexibility, Cost Savings
By Mike Stevens

Cloud computing is being heralded as the Next Big Thing was whether enough of it would be available on a reliable
in IT infrastructure, promising new levels of eff ciency, basis. Three factors have changed this mindset:
f exibility and cost savings—particularly in the area of
• Rising energy costs
outsourced hosting, also known as infrastructure-as-a-
service (IaaS). But because cloud computing is at the • A trend toward IT and Facilities Management sharing
early stages of what Gartner calls the “hype cycle,” there responsibility—and budget—for data-center energy
is widespread confusion about what the term actually usage
means, not to mention questions about how this new
technology can deliver practical business benef ts. • Concern about the general ecological impact of IT,
and its contribution to companies’ carbon footprint in
The fact is, cloud computing has real value right now. particular
This paper will explain how it works in the context of
evolving technology trends and how, through emerging Increasingly, data-center managers must meet not only
IT outsourcing models, cloud computing can function SLAs but “performance per watt” goals as well. Two
as an extension of a company’s existing infrastructure, technologies have already emerged to meet this goal:
with enterprise-class features like redundancy, high virtualization and grid computing (also known as utility
availability and disaster recovery (fail-over) provided at a computing). Both embody principles that are central to
substantially lower cost than on-premises approaches. cloud computing.

One IT Web site recently collected 21 different def nitions Virtualization: Key to Boosting
for cloud computing from various experts, but in the Server Utilization
broadest sense the def nition is simple. Cloud computing
Server virtualization was one of the f rst and most
provides a remote service that users can access via the
important responses to demands for IT energy eff ciency.
Internet. Under this broad def nition, we are all familiar
It is specif cally a response to the one-application-per-
with cloud computing. Facebook, Flickr and the various
server mentality that has been prevalent in data centers
Internet-based e-mail offerings such as Yahoo! Mail and
for many years and that results in a situation where only
Google’s Gmail all store and process data remotely, and
15 or 20 percent of their total computing capacity is in
we take this for granted. Because of the close association
use at any given time. By enabling IT departments to run
of these familiar services with cloud computing, some
multiple applications on the same server, virtualization
analysts and trade-press editors are beginning to refer to
provides dramatic gains in server utilization. It is also
all Internet-accessible services as cloud computing. This
an approach that non-technical senior managers can
is both confusing and inaccurate. Such services more
understand and may even demand (often without
properly fall into the category of software-as-a-service
realizing that virtualization can be more diff cult in
(SaaS).
practice than in theory).
It is more accurate to look at cloud computing as a new
Although virtualization clearly increases server resource
approach to infrastructure—one that is a logical next step
utilization, it is not the ultimate answer to computing
on a path to more eff cient use of computing resources.
eff ciency because it does not deal with the problem of
usage spikes, such as the increased demand put on
Clouds, Economics and Energy
f nancial applications at the end of each f nancial quarter
The search for economic eff ciency in IT infrastructure is or the huge (but short-lived) spikes in e-commerce traff c
a relatively new concern. Until recently, the only energy- following the airing of an infomercial. For example, if
related question that data-center managers worried about

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 What Cloud Computing Means to You: Efficiency, Flexibility, Cost Savings

application X exceeds the processing capability of the New Attitudes Toward Servers
initially provisioned and available hardware during a peak
In simple terms, cloud computing exploits two new
transaction period, the application suffers a performance
attitudes toward servers:
hit because virtualization cannot dynamically add
additional hardware components and additional virtual • Servers can run more than one application
machines on demand. (virtualization).

This is where technologies like VMware DRS (Distributed • Servers need not be located on the premises
Resource Scheduler) come into play. VMware DRS can (distributed computing).
aggregate resources from multiple servers into pools of
resources. By doing so, DRS can intelligently allocate These new attitudes, combined with technical advances
available resources among virtual machines according in CPU capacity and greater bandwidth availability, have
to business needs. Highly demanding, short-lived led to this new mode of delivering computing resources.
applications will have access to all the necessary server Cloud computing utilizes virtualization technology to
resources when needed without isolating those resources maximize eff ciency, but it avoids the complexity of grid
specif cally to those applications. When those highly computing issues by not attempting to parse out single
demanding, short-lived applications are not demanding workloads over multiple physical servers. In other words,
excessive resources, those resources can be dynamically cloud computing retains the one-application-per-machine
reallocated to other virtual machines as needed. approach, but it does so using virtual machines.

One of the best-suited business models for exploiting this

Grid Computing vs. Usage Spikes
new technology is infrastructure outsourcing, which is the
Another technology known as grid or utility computing second theme of this paper.
was developed in the mid 1990s to address this
issue. The central concept was to create a pool of The Evolution of Infrastructure Outsourcing
geographically distributed computing resources that The business case for infrastructure outsourcing has two
any application could draw on as necessary to execute components, and cloud computing strengthens both of
a task—a pool large enough to easily absorb usage them. The f rst is cost. Acquiring the requisite hardware
spikes by a single application. This pool or grid would to meet the requirements of a growing company is a
provide computing power in the same way an interstate capital expense that many companies would like to avoid.
power grid provides electricity, with each “customer” Furthermore, the acquisition-through-purchase model is
(application) drawing as much power as necessary.
Users would neither know nor care about the location of
their data or the CPU that was processing that data. Figure A

It now appears that the grid vision of computing power

Applications SaaS
as a utility was somewhat ahead of its time. A number
of signif cant issues must be resolved before today’s
mission-critical applications can run on a grid, primarily Software Development Environment PaaS
related to the diff culties of simultaneously running one
instance of an application on multiple physical servers. At Computing Communication
Storage
present, the cost of resolving these issues and getting a Resources Bandwith
grid to work is so high that it destroys the business case IaaS
for grids. But by propagating the idea that users and the Hardware/OS
computing resources they use don’t need to be in the
same physical location, grid computing paved the way for
Currently, managed hosting, or infrastructure-as-a-service
a practical, technologically viable approach to computing
(IaaS) is one of the most important and fastest growing uses of
based on shared, distributed resources that may be cloud computing. Other uses include platform-as-a-service and
remote: cloud computing. software-as-a-service.

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 What Cloud Computing Means to You: Efficiency, Flexibility, Cost Savings

inherently wasteful. Servers and memory systems are Conclusion

almost always purchased to meet projected capacity
The success of companies offering infrastructure-as-
needs, not current needs. As a result, a substantial
a-service (IaaS) based on cloud computing is a strong
percentage of acquired resources are always wasted until
indication that cloud computing will become increasingly
the company grows into them, which may take as long as
more important over time. Meanwhile, as the debate
a year.
over the exact def nition of cloud computing continues
In contrast, an outsourced model such as managed in academic circles and technical chat rooms, the reality
hosting offers a pay-as-you-grow model that enables of cloud computing is giving companies cost eff ciencies
companies to utilize only the capacity they need. In and f exibility that have never before been possible.
addition, the actual cost of providing these resources is
lower. Hosting companies reduce their own costs through Candystand.com: a Case Study
a combination of superior technology and economies of
The experience of an online gaming company is a
scale, and they can pass on a portion of their savings to
perfect example of how a managed hosting company
customers. can use cloud computing to make it easier for its clients
to better serve the needs of their customers.
Strategic Focus, Extreme Flexibility
The second argument for infrastructure outsourcing Candystand.com is the Web’s premier destination for
is that it enables IT departments to focus on strategic free-to-play, high-quality online games suitable for the
initiatives that add value and create competitive entire family, serving approximately 5 million unique
advantage, rather than getting mired in the everyday visitors per month. Recently, when the company’s
details of managing servers (plus the support technology ownership structure changed, it needed to migrate to a
and technicians required to keep those servers up and new managed hosting provider to replace the current
provider, which would no longer be available.
running).
As a company that depends on online advertising
Infrastructure outsourcing was able to deliver these
as its source of revenue, literally every minute of
benef ts even in its early days, when servers were run on
down time affects Candystand.com’s bottom line. In
the old one-application-per-server model. As virtualization
addition, Candystand.com enjoys substantial loyalty
technology became available, eff ciency increased
and user conf dence among its players, and any hint
dramatically. Cloud computing takes eff ciency (and its
of unreliability could seriously affect that valuable
cost benef ts) to a whole new level and adds a benef t
business asset. Because of these two factors, high
that virtualization alone cannot provide: extreme f exibility. availability was the company’s most important criterion
A hosting company using cloud technology can literally in choosing a new hosting company. In addition,
double a customer’s capacity in half an hour. Candystand.com has very aggressive growth targets,
which made scalability a second important criterion. A
Security: Comparable to Physical
third criterion, of course, was cost.
Environments
When IT managers begin to consider infrastructure Cloud technology provided by Hosting.com was able
outsourcing, one of their major concerns is always to meet all these criteria, and its ability to do so can be
security, particularly when a virtualized environment specif cally attributed to its use of cloud computing. The
virtualized environment facilitates the load balancing
is involved. But as cloud computing has matured, the
that is absolutely necessary for a site like Candystand.
security issues have been resolved. For networks, unif ed
com to ensure high availability, and no technology
threat management (UTM) technology combined with
provides faster scalability than cloud computing.
virtual domains (VDOMs) can provide the same isolation
Perhaps most important, Hosting.com was able to
and hardened f rewall/IPS security policies as traditional
meet these criteria at a cost that was between 30 and
physical environments. Data security can be ensured
40 percent lower than competitors using conventional
when each customer has its own isolated virtual SAN
“pre-cloud” technology.
disk, with no sharing between customers.

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 What Cloud Computing Means to You: Efficiency, Flexibility, Cost Savings

This IT Business Edge Executive Report Sponsored by

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About the Author

Mike Stevens began his career as a technical writer in semiconductor manufacturing and then switched to marketing. At his
own Silicon Valley–based agency, he worked with an impressive list of clients, including HP, EMC, Fujitsu and Microsoft. His
primary focus for the last seven years has been enterprise software.

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