Pritam De

Cloud Computing
PRITAM DE

CLOUD COMPUTING

2
Cloud Computing
2nd edition
© 2020 Pritam De & bookboon.com
ISBN 978-87-403-3558-3

3
CLOUD COMPUTING Contents

CONTENTS
Table of Figures 6

Acknowledgement 8

1 Introduction to Cloud Computing 9

1.1 What is Cloud Computing? 9
1.2 Cloud Computing History 14
1.3 Types of Cloud Computing 16
1.4 Benefits and Challenges 19

2 How Cloud Computing Works 22

3 Cloud Computing Landscape & Value Drivers 25

3.1 Cloud Value Proposition 25
3.2 Cloud Computing Value Chain 25
3.3 Predicted Market Growth 27
3.4 Competitive Landscape 28
3.5 Cloud Computing Adoption Factors 30

4 Cloud Computing Business Case 33

5 Cloud Computing Reference Framework 35

6 Cloud Computing Maturity Model 42

7 Cloud Computing Pricing Model 53

8 Cloud Computing Return on Investment (ROI) 56

9 Is Cloud Computing Right Fit for Your Organization? 61

10 Cloud Computing Adoption Roadmap 63

11 Public Cloud Migration Requirements 66

12 Cloud Implementation Challenges 69

13 Public Cloud Service Provider Selection Model 71

14 Cloud Readiness Assessment Questionnaire 74

15 Next Generation Cloud Computing 75

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CLOUD COMPUTING Contents

16 Top Questions to Ask Yourself Before Adopting Cloud Computing 78

17 Top Questions to Ask Your Cloud Service Provider 79

18 Top Three Cloud Service Providers 81

19 References 95

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CLOUD COMPUTING Table of Figures

TABLE OF FIGURES
Figure 1: Types of Cloud Computing 18
Figure 2: Cloud Computing Architecture Overview 22
Figure 3: Model of Virtualization in Cloud 24
Figure 4: Cloud Computing Value Chain 26
Figure 5: Worldwide Public Cloud Services Revenue Forecast
(Billions of U.S. Dollars (Gartner October 2017) 27
Figure 6: Compound Annual Growth Rate (CAGR) By Cloud Service Category,
2016-2020 (Gartner) 28
Figure 7: Cloud Market Growth & Segment Leaders – H1 2019 29
Figure 8: Global Cloud Infrastructure Services Market: AWS, Azure and Google
Lead the List 30
Figure 9: Cloud Computing Adoption Factors 32
Figure 10: Cloud Computing Reference Framework 36
Figure 11: NIST Conceptual Reference Model (Source: NIST) 39
Figure 12: Interactions between the Actors in Cloud Computing (Source: NIST) 40
Figure 13: Usage Scenario for Cloud Brokers (Source: NIST) 41
Figure 14: Usage Scenario for Cloud Carriers (Source: NIST) 41
Figure 15: Usage Scenario for Cloud Auditors (Source: NIST) 41
Figure 16: The Cloud Maturity model has five progressive levels of maturity 45
Figure 17: Open Data Center Alliance Cloud Maturity Model 46
Figure 18: Example Domain Outcomes 49
Figure 19: Business Domains 50
Figure 20: Technical Domains 51
Figure 21: Open Data Center Technical Cloud Adoption Roadmap 52
Figure 22: Key Components of Cloud Computing Pricing 54
Figure 23: The Capacity vs. Utilization Curve (Source: Amazon Web Services) 57
Figure 24: Cloud Computing ROI Models and KPIs 58
Figure 25: Cloud ROI Indicator Ratios (Source: The Open Group) 58
Figure 26: Cloud ROI Time Indicator Ratios (Source: The Open Group) 59
Figure 27: Cloud ROI Quality Indicator Ratios (Source: The Open Group) 59
Figure 28: Cloud ROI Profitability Indicator Ratios (Source: The Open Group) 60
Figure 29: Cloud ROI Savings Ratios (Source: The Open Group) 60
Figure 30: Cloud Computing Adoption Model 64
Figure 31: Public Cloud Migration Requirements 66
Figure 32: Virtualization and Cloud Computing TCO Source: CISCO 67
Figure 33: Example TCO of Migration to Cloud IaaS Over Three Years
(Source: Gartner) 68

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CLOUD COMPUTING Table of Figures

Figure 34: Next Generation Cloud Computing Aspects 75

Figure 35: OpenStack Cloud Operating System (Source: OpenStack) 76
Figure 36: Intel Cloud 2015 Vision (Source: Intel) 77
Figure 37: Worldwide market share of leading cloud infrastructure
service providers in Q4 2019 81
Figure 38: Gartner Magic Quadrant for Cloud Infrastructure as a Service,
Worldwide 82

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CLOUD COMPUTING Acknowledgement

ACKNOWLEDGEMENT
This eBook is a compilation of various Cloud computing concepts, frameworks, and ideas
summarized and put together in an easily readable and digestible format. My deep gratitude
goes to the Cloud computing pioneers in the industry, framework-provider organizations,
and colleagues whom I have worked with. The intent of this eBook is to explain Cloud
computing concepts in an easily understandable way. It is not my intent to introduce materials
as my own creation. I am, as always, indebted to the industry from which I learned so
much. As far as possible, I have tried to cite the source of my references. Any omission is
purely unintentional and accidental. I would like to express my gratitude to the following
organizations whose works I have cited in this eBook.

• National Institute of Standards and Technology (U.S. Dept of Commerce)

• Association for Information Systems
• The Open Group
• Open Alliance for Cloud Adoption (OACA
• Everware-CBDI
• OpenStack
• Gartner
• Capability Maturity Model Institute (CMMI)
• Amazon Web Services
• Google Cloud Platform
• Microsoft Azure

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CLOUD COMPUTING Introduction to Cloud Computing

1 INTRODUCTION TO
CLOUD COMPUTING

1.1 WHAT IS CLOUD COMPUTING?

Cloud computing is ubiquitous. It is the most talked about topic nowadays. Businesses
talk about adopting cloud platform to reduce operational cost. Our emails are stored on
cloud at locations not obvious to us. We upload our pictures to websites that store them
in cloud storage (e.g. iCloud). Our personal files are stored in Google Cloud drive. Our
office uses Microsoft OneDrive. Our videos are uploaded to YouTube. In today’s world, it
is tough to imagine a scenario where cloud computing has not touched our lives. So, what
exactly is cloud computing?

Cloud computing is a term used to signify a way of accessing software, infrastructure,

and computing power from a location other than our own. The resources usually reside in
distant data centers comprising of hundreds and thousands of servers. The reach of cloud
computing is so vast that the resources are in a different country and continent that often
we have no clue of the exact location. Think of the emails in your Gmail inbox. The emails
do not reside in our personal computers. Google serves these emails from their servers that
reside in data centers located in Americas, Asia, or Europe.

Another simple way to explain Cloud concept is through the example of ordering food.
In the absence of a Cloud model, you would typically have a kitchen in your house where
you will prepare your food. This entails a few financial and non-financial implications.
There are costs involved to maintain the kitchen, procuring groceries to prepare the food,
paying for utility expenses, etc. The non-financial factors are the time involved to prepare
the food, cleaning the kitchen, maintaining hygienic conditions, etc. There is an overhead
involved in running your own kitchen. But what if you could just buy the food you need
without going through the hassle of cooking? You could either buy the food from the store
or order online from the restaurant. You are least bothered about where the food is prepared
and what costs are entailed in the process. The kitchen is hosted in some location. All you
care is the delivery of quality food at right time and price. You only pay for the service (in
this case, food) you consume. The Cloud model works on the same concept. You only pay
for the service you consume; the infrastructure that provides the service is not located in
your premise. It is hosted and managed by a third party. The nitty-gritties of the host are
unknown to you. This ‘unknown’ is diagrammatically represented as a ‘cloud’.

Where did Cloud computing get its name from? If you remember the IT network diagrams,
the internet is often represented as a cloud pictorially as shown below.

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CLOUD COMPUTING Introduction to Cloud Computing

Cloud = Internet

Internet = Global computer network of

interconnected devices

The cloud icon is like the proverbial “black box” that makes the internet work. We don’t
know what it contains but it serves our purpose. Since it is owned and managed by someone
else, we do not need to include the details in the diagram? Therefore, the cloud computing
concept, likely, may have been derived from this notion. A more elaborated Cloud computing
structure is shown here.

Servers

Laptops Application Desktops

Monitoring Collaboration
Finance
Content Communication

Platform

Identity
Queue
Object Storage Runtime Database
Infrastructure

Compute Network
Block Storage
Phones Tablets

Cloud Computing

Source: Wikipedia

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CLOUD COMPUTING Introduction to Cloud Computing

All the elements inside the cloud – applications, platform, and infrastructure – are oblivious
to the end users. All the users need are the access devices such as laptops, phones, tablets, etc.
and network connectivity to the cloud that is mostly provided by Cloud service providers.

Let us look at some of the popular definitions of Cloud computing.

Cloud computing is the on-demand availability of computer

system resources, especially data storage and computing
power, without direct active management by the user. The
term is generally used to describe data centers available
to many users over the Internet.

– Wikipedia

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.

– The National Institute of Standards and Technology

(NIST)

Cloud computing is the on-demand delivery of compute

power, database storage, applications, and other IT resources
through a cloud services platform via the Internet with pay-
as-you-go pricing. ... You can access as many resources as
you need, almost instantly, and only pay for what you use.

– Amazon Web Services

In cloud computing, the capital investment in building

and maintaining data centers is replaced by consuming
IT resources as an elastic, utility-like service from a cloud
“provider” (including storage, computing, networking, data
processing and analytics, application development, machine
learning, and even fully managed services).

– Google Cloud

Simply put, cloud computing is the delivery of computing

services—including servers, storage, databases, networking,
software, analytics, and intelligence—over the Internet (“the
cloud”) to offer faster innovation, flexible resources, and
economies of scale. You typically pay only for cloud services
you use, helping you lower your operating costs, run your
infrastructure more efficiently, and scale as your business
needs change.

– Microsoft Azure
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CLOUD COMPUTING Introduction to Cloud Computing

According to NIST, the cloud computing model is composed of five essential characteristics,
three service models, and five deployment models.

Essential Characteristics Service Models Deployment Models

• On-demand self-service • Software as a Service (SaaS) • Public Cloud

• Broad network access • Platform as a Service (Paas) • Private Cloud
• Resource pooling • Infrastructure as a Service • Community Cloud
• Rapid elasticity (IaaS) • Hybrid Cloud
• Measured service • Multi Cloud

Essential Characteristics
• On-demand self-service
A consumer can unilaterally provision computing capabilities, such as server time
and network storage, as needed automatically without requiring human interaction
with each service provider.

• Broad network access

Capabilities are available over the network and accessed through standard mechanisms
that promote use by heterogeneous thin or thick client platforms (e.g., mobile
phones, tablets, laptops, and workstations).

• Resource pooling
The provider’s computing resources are pooled to serve multiple consumers using
a multi-tenant model, with different physical and virtual resources dynamically
assigned and reassigned according to consumer demand. There is a sense of location
independence in that the customer generally has no control or knowledge over the
exact location of the provided resources but may be able to specify location at a
higher level of abstraction (e.g., country, state, or datacenter). Examples of resources
include storage, processing, memory, and network bandwidth.

• Rapid elasticity
Capabilities can be elastically provisioned and released, in some cases automatically,
to scale rapidly outward and inward commensurate with demand. To the consumer,
the capabilities available for provisioning often appear to be unlimited and can be
appropriated in any quantity at any time.

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CLOUD COMPUTING Introduction to Cloud Computing

• Measured service
Cloud systems automatically control and optimize resource use by leveraging a
metering capability at some level of abstraction appropriate to the type of service
(e.g., storage, processing, bandwidth, and active user accounts). Resource usage
can be monitored, controlled, and reported, providing transparency for both the
provider and consumer of the utilized service.

Service Models
• Software as a Service (SaaS)
The capability provided to the consumer is to use the provider’s applications running
on a cloud infrastructure. The applications are accessible from various client devices
through either a thin client interface, such as a web browser (e.g., web-based email),
or a program interface. The consumer does not manage or control the underlying
cloud infrastructure including network, servers, operating systems, storage, or even
individual application capabilities, apart from limited user-specific application
configuration settings.

• Platform as a Service (PaaS)

The capability provided to the consumer is to deploy onto the cloud infrastructure
consumer-created or acquired applications created using programming languages,
libraries, services, and tools supported by the provider. The consumer does not
manage or control the underlying cloud infrastructure including network, servers,
operating systems, or storage, but has control over the deployed applications and
possibly configuration settings for the application-hosting environment.

• Infrastructure as a Service (IaaS)

The capability provided to the consumer is to provision processing, storage, networks,
and other fundamental computing resources where the consumer can deploy and
run arbitrary software, which can include operating systems and applications. The
consumer does not manage or control the underlying cloud infrastructure but has
control over operating systems, storage, and deployed applications; and possibly
limited control of select networking components (e.g., host firewalls).

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CLOUD COMPUTING Introduction to Cloud Computing

Deployment Models
• Private cloud
The cloud infrastructure is provisioned for exclusive use by a single organization
comprising multiple consumers (e.g., business units). It may be owned, managed,
and operated by the organization, a third party, or some combination of them, and
it may exist on or off premises.

• Community cloud
The cloud infrastructure is provisioned for exclusive use by a specific community
of consumers from organizations that have shared concerns (e.g., mission, security
requirements, policy, and compliance considerations). It may be owned, managed,
and operated by one or more of the organizations in the community, a third party,
or some combination of them, and it may exist on or off premises.

• Public cloud
The cloud infrastructure is provisioned for open use by the general public. It may be
owned, managed, and operated by a business, academic, or government organization,
or some combination of them. It exists on the premises of the cloud provider.

• Hybrid cloud
The cloud infrastructure is a composition of two or more distinct cloud infrastructures
(private, community, or public) that remain unique entities, but are bound together
by standardized or proprietary technology that enables data and application portability
(e.g., cloud bursting for load balancing between clouds)

• Multi cloud
Multi cloud (also multi-cloud) is the use of multiple cloud computing and storage
services in a single network architecture. This refers to the distribution of cloud
assets, software, applications, and more across several cloud environments. With
a typical multi-cloud architecture utilizing two or more public clouds as well as
private clouds, a multi-cloud environment aims to eliminate the reliance on any
single cloud provider or instance.

1.2 CLOUD COMPUTING HISTORY

Cloud computing is the result of evolution of several key technology concepts such as
virtualization, grid computing, multi-tenancy, scalability, and the exponential increase in
computing power and storage.

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CLOUD COMPUTING Introduction to Cloud Computing

Even though the origin of cloud computing is not exactly known, the analogy of cloud
computing has been existed since 1950s when mainframe computers became available to
perform high-volume computing processing. Mainframes were costly and bulky to use.
Therefore, to make more efficient use of them, a practice evolved that allowed several
thin clients (or static computer terminals) to share the computing power of mainframes.
And this is how “resource pooling” and “time-sharing” – key terms associated with cloud
computing – came into common parlance.

The 1990s saw telecommunication service providers using virtual private network (VPN)
to manage their network bandwidth effectively. Depending on the demand load, they
would switch the traffic to the available servers. This process happened at the infrastructure
and data center level without the users being aware of it. The telecommunication service
providers began to use the cloud symbol to demarcate the boundary between the network
service providers and the users. In other words, it is akin to saying to end users, “You do
not need to know where and how you get the network bandwidth as long as it is available
to you uninterrupted. Leave it to us.” This is where the concept of Infrastructure-as-a-
Service took roots.

The decade of 2000s saw the actual emergence and evolution of Cloud computing to
its present form. Scientists and technologists explored ways to extend Cloud computing
beyond applications and platforms. Technology companies made major breakthroughs in
their Cloud products and services. This decade saw the introduction and popularization of
“pay-as-you- go” pricing model. Gartner predicted that Cloud computing would change
the relationship between consumers and providers of IT services. It also observed that
“organizations are switching from company-owned hardware and software assets to per-use
service-based models” so that the “projected shift to computing…will result in dramatic
growth in IT products in some areas and significant reductions in other areas.”

Major cloud technology innovations were made in this decade. In 2008, OpenNebula
came out with open-source software for deploying private and hybrid clouds. In 2008,
Rackspace – another major player in Cloud space – launched OpenStack, an open-source
cloud software. In 2011, IBM launched SmartCloud framework to support Smarter Planet.
Companies such as Microsoft, Amazon, and Oracle also came out with your own Cloud
products and services. Today most of the technology companies have some presence in the
Cloud market space.

Today Cloud computing has become so ubiquitous that people are no longer talking about
the potential or implementation-challenges of Cloud. The talk of the town is how Cloud
platforms can be used for the next generation innovations such as Big Data, Internet of
Things, Mobility, Analytics, Digitization, and Advanced Research. By removing the overhead
of CAPEX, Cloud has made possible for innovators to use ready-made technology platform to
test and roll-out their ideas quickly. In other words, it has reduced the time-to-market of ideas.

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CLOUD COMPUTING Introduction to Cloud Computing

1.3 TYPES OF CLOUD COMPUTING

Cloud Service Models Examples / Providers

Infrastructureas- This is the most basic cloud service Amazon Web Services,
a-Service (IaaS) model where cloud service providers Rackspace, Cloud Scaling,
provide hardware capacities by Eucalyptus Systems, HP
demand. Key services provided are:
virtual machines, servers, storage,
load balancers, network, firewalls, IP
addresses, virtual local area networks
(VLANs). Users are billed according
to the amount of resource allocated
and consumed.

Platform-asa- Service Cloud providers provide a computing Amazon Web Services,

(PaaS) platform to build applications Google App Engine,
without the need to buy hardware or Salesforce.com, Openstack,
software licenses. Rightscale
Typical services provided are:
Operating System, Execution runtime
environment, database, web server,
development tools.

Software-asa- Service SaaS providers provide users Salesforce.com, Oracle on

(SaaS) access to application software and Demand, AppDynamics,
databases without the need to install Microsoft Office 365
on their devices. Cloud service
providers manage the infrastructure
and platforms that run the
applications. This is usually priced on
a pay-per-use basis.

Unified Communicatio In this model, multi-platform Telesphere, Verizon, AT&T,

ns as a Service communications over the network Microsoft, Cisco
(UCaaS) are packaged by the service provider.
The services could be in different
devices, such as computers and
mobile devices. Services may include
IP telephony, unified messaging,
video conferencing and mobile
extension.

TelePresence as a Providers provide Telepresence as a TeleSpace

Service (TPaaS) service.

Contact Center as a Providers provide Contact Centre Cisco HCS, Metro CSG
Service (CCaaS) services such as interactive voice
response, email, web and real-time
chat as a service.

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CLOUD COMPUTING Introduction to Cloud Computing

Cloud Deployment Models Examples / Providers

Private Cloud Cloud infrastructure dedicated to a HP, Cisco Systems, Microsoft

single customer (or organization),
managed internally or by a third-
party, and hosted internally or
externally

Public Cloud Cloud infrastructure resources shared Salesforce.com, Amazon

by multiple customers. The services Web Services, Microsoft,
are rendered over the internet and Oracle, Google
offered on pay-per-usage model.

Hybrid Cloud Hybrid cloud is a combination of IBM, VMware, Rackspace,

private, public and community cloud HP, Expedient, Eucalyptus
services. These services could be
from different service providers.

Community Cloud Cloud infrastructure dedicated to a Cloudian, CFN Services

group of customers.

Distributed Cloud Cloud computing provided by a Amazon Web Services,

distributed set of machines that are Microsoft, Google
running at different locations, while
still connected to a single network or
hub service.

Intercloud Interconnected global “cloud of Cisco

clouds”

Multi-cloud Multi-cloud refers to multiple cloud

services that could be running in a
single heterogeneous architecture.
Multi-cloud is mostly used to reduce
dependence on single vendor, and
spread the risk across multiple
service providers.

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CLOUD COMPUTING Introduction to Cloud Computing

A pictorial representation of the above table is depicted below.

Governance

Business Function Services Application Services SaaS

Software Development Platform PaaS

Computing Computing
Storage
Power Bandwidth
IaaS
Hardware/Operating System

Unified Communications Services UCaaS

Tele Presence Services TPaaS

Contact Center Services CSaaS

Public Hybrid Private

Economies of Scale

Figure 1: Types of Cloud Computing

A clear segregation of each Cloud computing layers is shown here. At the top are the
business and application services that are provided by Software as a Service (SaaS) layer. If
an organization decides to develop the software in-house but does not have the necessary
development platform, it can opt for Platform as a Service (PaaS). PaaS provides the platform
to develop application software. The application software needs servers (for computing
power), storage, and Operating System. These can be procured through Infrastructure as a
Service (IaaS). The network and communication services are provided through models such
as UCaaS, TPaaS, and CSaaS.

The economies of scale are increasingly achieved as we move from Private to Public cloud
model as the infrastructure is shared with a large pool of consumers. Similarly, efficiency
in governance is achieved as move from in-house to Cloud services.

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CLOUD COMPUTING Introduction to Cloud Computing

1.4 BENEFITS AND CHALLENGES

Cloud computing offers multiple benefits. Some of the top reasons organizations adopt
cloud are:

• Cost effective: Cloud computing services help in cost savings because you pay
only for what you consume. The additional overheads of maintaining Capital
Expenditure (CAPEX) is removed. Cloud computing eliminates the capital
expense of buying hardware and software and setting up and running on-site
datacenters—the racks of servers, the round-the-clock electricity for power and
cooling, and the IT experts for managing the infrastructure.
• Ease of implementation: Cloud services are easy to procure and implement. All
you need is a subscription to the cloud services and network connectivity to the
cloud. The cloud service provider is responsible for the installation, upkeep and
maintenance of the cloud environment.
• Secure & Reliable: Cloud services are generally considered to be secure and
reliable if extremely sensitive data is not hosted on cloud. Cloud Computing
services strictly adhere to a broad set of policies, technologies, and controls (both
internal and external) that strengthens security. This protects data, deployed
applications, and infrastructure resources from potential threats.

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CLOUD COMPUTING Introduction to Cloud Computing

• Flexibility & Scalability: One of the biggest benefits of cloud is that it is highly
flexible and scalable. One can scale up the computing requirements based on the
business demand. And if you no longer need the service, you can scale down the
usage too.
• Interoperability: Cloud interoperability means the ability of applications to
move from one cloud environment to the next (e.g. switching between public
and private cloud), or the ability of applications running in different clouds to
share information. Nowadays customers can use the same management tools
with variety of cloud computing platforms and providers.
• Global Scale: Cloud computing services include the ability to scale elastically
and scale fast. It means delivering the right amount of IT resources at the right
time, and from the right geographic location.
• Performance: The biggest cloud computing services run on a worldwide network
of secure and redundant data centers. This offers benefits over a single corporate
data center, including high availability, high redundancy, reduced network
latency, and greater economies of scale.
• Speed: Most cloud computing services provide self-service ability to customers
to provision resources quickly (mostly within minutes). This helps business to
improving their time-to-market of their products and services.
• Productivity: Cloud computing removes the operational headache of
provisioning and managing the resources, as typically done in a corporate data
center. This allows the organization to focus on their core business competencies
and achieving business goals.
• Reliability: Cloud computing makes data backup, disaster recovery, and business
continuity easier and less expensive because data can be mirrored at multiple
redundant sites on the cloud provider’s network.

Cloud computing comes with its own sets of challenges and pitfalls.

• Security: One of the biggest challenges of cloud computing is its perceived

security risks. There is a general notion that anything hosted on cloud is not safe
and secure; they are vulnerable to hackings and data compromise. However, the
cloud computing service providers have made their data centers more robust and
resistant to external and internal threats.
• Data Governance: If the data is stored on cloud servers, the consumers may not
be accurately aware of the physical location of the servers. Some countries forbid
storage of personal data outside the country. Therefore, it becomes extremely
challenging to provide data governance when you cannot see where the data is
stored. Another point of debate is who owns the data stored in cloud. Is it the
cloud service providers or the cloud service consumers? The cloud service providers

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CLOUD COMPUTING Introduction to Cloud Computing

may demand significant extra service fee to return the date to the organizations.
Amazon Web Services have a simple rule to data governance. Their Shared
Responsibility Model says that AWS is responsible for security OF the cloud; the
customers are responsible for security IN the cloud. This means anything stored by
the customers in their data centers is the responsibility of the customer.
• Multi-tenancy: If the same cloud environment is used as multi-tenancy (sharing
of cloud infrastructure/applications by multiple organizations), security and
privacy comes a major concern for organizations. To circumvent this, cloud
service providers provide dedicated host/tenancy where the infrastructure is
provisioned for a single customer.
• Data Privacy and Integrity: As users, we are mostly concerned with data
privacy. How do we know that our sensitive personal information is not sold by
the cloud service provider to a third-party?
• Regulatory compliance: Nowadays regulations require that sensitive corporate or
user data cannot be stored in a cloud environment hosted in a different country.
There are compliance challenges around data location or cloud security policies.
Privacy laws, Payment Card Industry (PCI) requirements, or financial reporting
laws are some of the compliance requirements that organizations need to abide by.
• Disaster Recovery: It is a concern of enterprises about the resiliency of cloud
computing as data may reside in multiple servers and geographical locations. In
such a situation, what is the disaster recovery plan if any of the servers go down?
What if we lose data at a point in time due to server failure? Organizations
therefore are extremely concerned on the disaster recovery plan.

Listed above are just few of the benefits and challenges. We will uncover more of them as
we proceed in the later chapters.

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CLOUD COMPUTING How Cloud Computing Works

2 HOW CLOUD COMPUTING

WORKS
The underlying tenet of Cloud Computing is that capabilities are delivered as a service.
Cloud computing model is based on the principle that customers pay only for usage; not for
investment in hardware, software licenses, upgrades, maintenance fees, and man-power cost
to run the service in-house. A major reason for this shift is the increasing commoditization of
IT. Internet has become cheaper and available everywhere; cost of IT platforms has reduced
substantially; hardware could be commoditized; storage has become cheaper (for the same
price, one can buy bigger storage capability – thus justifying Moore’s Law); virtualization
technologies have become common and affordable; there is an increase in adoption of open
source software; availability of abstraction for the users, and lastly increased standardization
of IT. Additionally there has been a constant pressure on IT to cut costs (largely because in
most organizations, IT is still seen as a cost center rather than a profit center).

From an architectural standpoint, Cloud computing includes dynamic delivery of capabilities

(or services) in the form of applications (Software as a Service), Platform services (Platform
as a Service), and Infrastructure services (Infrastructure as a Service).

Internet
CUSTOMERS

APPLICATION Enterprise Application Software DEVELOPERS/

APPLICATION PROVIDERS
Service & Build-in Functionality
(Web 2.0, Mesh-ups)
Internet
Development Tools Operational
PLATFORM Services
SaaS Applications and Business (Application
Services Management)
Middleware Services
(Database services, Application Server,
Web Access)

Virtualization

Basic Monitoring and Security Operational

Services
INFRASTRUCTURE (Hardware
Operating System Management)

Server – Bandwidth – Storage

Figure 2: Cloud Computing Architecture Overview

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CLOUD COMPUTING How Cloud Computing Works

Cloud service providers expose these services mostly through a web interface. All the
consumers need to do is possess a stable internet connection and subscribe to these services.
Basically they are leasing the services and returning them when they no longer need them.

From a cloud service provider point of view, Cloud Computing provisioning is made
capable through major architectural innovations. A multi-tenancy allows customers to
share computing resources in a public or private cloud. Each tenant’s data is isolated and
remains invisible to other tenants. Multi-tenant architecture help providers to use the same
infrastructure to provide services to multiple consumers. Multi-tenancy is fundamental to both
public and private clouds; it applies to all three layers of a cloud: Infrastructure-as-a-Service
(IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). Multi-tenancy is the
fundamental technology that providers use to share IT resources with multiple applications
and tenants (businesses, organizations, etc.) This enables the providers to spread the CAPEX
across multiple consumers, thus driving down the cost of cloud services. According to an
article on Multi-tenancy in Computerworld, Salesforce.com, for example, supports 72,500
customers who are supported by 8 to 12 multi-tenant IaaS/PaaS instances in a 1:5000
ratio. In other words, each multi-tenant instance supports 5,000 tenants who share the
same database schema.

The second architectural characteristic of cloud computing is the increasing portability

and interoperability between in-house applications and cloud solutions. “Portability and
interoperability relate to the ability to build systems from re-usable components that will
work together “out of the box”, according to The Open Group. The most common kinds
of cloud computing portability are data portability, application portability, and platform
portability. Data portability enables re-use of data components across different applications.
Application portability enables the re-use of application components across cloud PaaS
services and traditional computing platforms. Platform portability enables re-use of platform
components across cloud IaaS services and non-cloud infrastructure, and re-use of bundles
containing applications and data with their supporting platforms. Interoperability provides
the ability to have different application components deployed on one platform communicate
with similar application components deployed on different platforms. For example, an
application deployed in-house in a traditional IT setup may communicate with another
component deployed in a hybrid cloud or one deployed on private cloud. This aspect of
portability and interoperability is critical to cloud computing success.

The third major architectural innovation in Cloud computing is virtualization. In simple

terms, virtualization is the capability that separates physical infrastructure to create multiple
dedicated resources. “Virtualization software makes it possible to run multiple operating
systems and multiple applications on the same server at the same time,” said Mike Adams,
director of product marketing at VMware, a pioneer in virtualization and cloud software and

23
CLOUD COMPUTING How Cloud Computing Works

services. “It enables businesses to reduce IT costs while increasing the efficiency, utilization
and flexibility of their existing computer hardware.” The technology behind virtualization
is known as a virtual machine monitor (VMM) or virtual manager, that separates compute
environments from the actual physical infrastructure. Virtualization separates the physical
infrastructure, and cloud computing builds on that separation. The key benefits of virtualization
are it helps to maximize infrastructure resources, provides multi-tenancy capability, and better
rationalization of IT costs. Virtualization provides the basic building blocks to enhance
agility and flexibility. So much so that businesses and organizations who are thinking of
moving to cloud are advised to fully implement and leverage the virtualization capability
in their IT environment.

VIRTUAL CLOUD MODEL

VIRTUAL MACHINE VIRTUAL MACHINE VIRTUAL MACHINE

APPLICATION APPLICATION APPLICATION

OPERATING SYSTEM OPERATING SYSTEM OPERATING SYSTEM

VIRTUALIZATION MANAGEMENT LAYER

TYPICALLY A HYPERVISOR OR VIRTUAL MACHINE MONITOR THAT CREATES AND RUNS VIRTUAL
MACHINES

VIRTUAL INFRASTRUCTURE

STORAGE VIRTUALIZATION

MEMORY VIRTUALIZATION

SERVER VIRTUALIZATION

NETWORK VIRTUALIZATION

Figure 3: Model of Virtualization in Cloud

The fourth architectural aspect of Cloud computing is load-dependent scalable architecture.

The unique selling proposition of Cloud is its ability to scale based on demand. Scalability
is the ability of computer solutions (software or hardware) to continue to function well
and efficiently irrespective of the load on its infrastructure. It should provide the same
performance and Quality of Service (QoS). This is usually made possible by using several
servers and distributing the load between them according to the demand. This is typically
done by Load Balancers that do the necessary scaling. Load Balancers provide the aggregation
of new servers to distribute the load among several servers. Like server scalability, there is
also network scalability. Network scalability allows bandwidth- provisioned network pipes
and other network resources to handle the sudden increase in network bandwidth.

24
CLOUD COMPUTING Cloud Computing Landscape & Value Drivers

3 CLOUD COMPUTING LANDSCAPE

& VALUE DRIVERS

3.1 CLOUD VALUE PROPOSITION

The adoption of Cloud computing has proved to be a significant value driver by addressing
key concerns of CIOs/CTOs. Cloud computing has brought in much-needed resiliency,
availability, and optimum usage of existing IT infrastructure. It can scale up to the increasing
demand for compute & storage space by optimally utilizing the IT infrastructure. This is
accomplished by building in much-needed redundancy in the infrastructure landscape by
quickly provisioning additional hardware/storage requirements from Cloud service provider.
At the same time by using server consolidation and virtualization features of existing
infrastructure, Cloud computing can increase the ROI of the infrastructure. This leads to
reduced Total Cost of Ownership (TCO).

3.2 CLOUD COMPUTING VALUE CHAIN

An understanding of cloud computing value chain is needed to grasp the potential of the
cloud computing opportunities in markets, and the space major cloud players play their game
in. The traditional linear value chain for IT services starts from consulting, and extends to
design, implementation, and operation/maintenance of IT infrastructure and applications.
The same value chain model can be applied to cloud computing business.

At the top of the value chain, we have the Cloud Advisory Service providers and System
Integration. The next layers are the service delivery, application management, service brokering,
and customer support. This is the space where SaaS providers & system integrators focus on.
The cloud applications are built on Cloud platform and Application services – the domain of
PaaS & SaaS providers. The bottom layer is occupied by Infrastructure & Hosting services.
This is where major IaaS hardware vendors such as Dell, HP, IBM, Oracle, etc. dominate
the market. The last mile – network connectivity layer – is left to Telecom companies, ISPs
and HW vendors to service.

Because of the segregation of capabilities at each step of the Cloud computing value chain,
several new, innovative and independent players have entered the market choosing the
segment where they are likely to achieve competitive advantage. They can launch their IT
service offerings on the market with minimal capital expenditure and controllable operating
costs. This resulted in a rich ecosystem of IT service providers who choose to play at any
step of the value chain according to their capabilities and long-term strategies.

25
CLOUD COMPUTING Cloud Computing Landscape & Value Drivers

CLOUD COMPUTING VALUE CHAIN

Cloud Platform &

Consulting Firms:
Advisory Application PaaS & SaaS providers
System Integration Players
Services Services

System Infrastructure
System Integration Players IaaS vendors
Integration & Hosting

Application
Hardware
Management SaaS Providers Hardware
Vendors
Services

Brokering Network Telcos and Internet Service

Integrators
Services Connectivity Providers

Figure 4: Cloud Computing Value Chain

Figure: Cloud Computing Value Chain

26
CLOUD COMPUTING Cloud Computing Landscape & Value Drivers

3.3 PREDICTED MARKET GROWTH

According to Gartner, the overall cloud computing market size is about $400 billion in 2020.

Worldwide Public Cloud Services Revenue Forecast (Billions of U.S. Dollars)

Source: Gartner (October 2017)
$450
$411.4B
$400
$355.6B
$350
$151
$305.8B
$300
$134
$260.2B
$250 $119
$219.6B $72
$105
$200 $58
$14
$90
$46 $12
$150
$35 $10
$100
$25 $9 $85
$100 $7 $71
$59
$48
$21
$14 $17
$50 $9 $11

$40 $42 $46 $50 $54

$0
2016 2017 2018 2019 2020
Cloud Business Process Services (BPaaS) Cloud System Infrastructure Services (IaaS)
Cloud Application Infrastructure Services (PaaS) Cloud System Infrastructure Services (IaaS)
Cloud Application Services (SaaS) Cloud Advertising

Figure 5: Worldwide Public Cloud Services Revenue Forecast (Billions of U.S. Dollars (Gartner October 2017)

Gartner’s worldwide public cloud services revenue forecast predicts Infrastructure-as-a-

Service (IaaS), currently growing at a 23.31% Compound Annual Growth Rate (CAGR),
will outpace the overall market growth of 13.38% through 2020. Software-as-a-Service
(SaaS) revenue is predicted to grow from $58.6B in 2017 to $99.7B in 2020. Considering
the entire forecast period of 2016 – 2020, SaaS is on pace to attain 15.65% compound
annual growth throughout the forecast period, also outpacing the total cloud market. The
following graphic compares revenue growth by cloud services category for the years 2016
through 2020.

Gartner predicts by 2021, 28% of all IT spending will be for cloud-based infrastructure,
middleware, application and business process services. Another factor is the adoption of
Platform-as-a-Service (PaaS). Gartner notes that enterprises are confident that PaaS can be
a secure, scalable application development platform in the future. The following graphic
compares the compound annual growth rates (CAGRs) of each cloud service area including
the total market.

27
CLOUD COMPUTING Cloud Computing Landscape & Value Drivers

Compound Annual Growth Rates (CAGR) By Cloud Service Category, 2016 -2020
Worldwide Public Cloud Services Revenue Forecast (Billions of U.S. Dollars)
Source: Gartner (October 2017)
Compound Annual Growth Rate, 2016–2020

25
23.31%

20
18.24%

15.65%
14.38%
15
13.38%
10.84%
10

6.24%
5

0
Cloud System Cloud Cloud Cloud Total Market Cloud Cloud Business
Infrastructure Application Application Management Advertising Process
Service Infrastructure Services and Security Services
(IaaS) Services (PaaS) (SaaS) Services (BPaaS)

Figure 6: Compound Annual Growth Rate (CAGR) By Cloud Service Category, 2016-2020 (Gartner)

3.4 COMPETITIVE LANDSCAPE

More than a technical solution, Cloud computing has brought in tremendous changes in
the way of doing business. Since cloud computing is built on a dynamic environment where
the cloud service is expected to be provided on-demand, self-provisioning, and pay-as-you-
use model, it opened up a plethora of opportunities for players in the market to offer new
ways of doing business, offering services in new ways, and making the supply chain more
integrated and cohesive.

The advent of Social, Mobility, and Analytics, combined with the power of Cloud computing,
has made the world heavily connected. This connectivity has led to emergence of new
companies that develop new applications, services, and the next generation of platforms.

Apart from the traditional Cloud Service providers, the competitive landscape is gradually
bringing into its fold new players in the markets. The competitive advantage may be shifting
from traditional players who concentrated on offering infrastructure capability to new players
who offer infrastructure, application, and data services on cloud. In coming days, we will
increasingly witness the co-existence of traditional Cloud players (such as Oracle, HP, or
Dell) with non-infrastructure players (such as Amazon and Google). We are going to see
a new and constantly-evolving battleground in Cloud computing competitive landscape.

28
CLOUD COMPUTING Cloud Computing Landscape & Value Drivers

The cloud computing market is huge. New data from the Synergy Research Group, across
seven key cloud service and infrastructure market segments, operators, and vendors – reports
revenues in excess of $150 billion for the first half of 2019. A 24% growth on the previous
year. (Source: Kinsta)

As big as the cloud market has become, there is massive scope for expansion. Especially
when you consider Gartner is projecting worldwide IT spending of $3.79 trillion in 2019.

Cloud Market Growth & Segment Leaders - H1 2019

Microsoft
Infrastructure

IaaS & PaaS Salesforce

Services
Cloud

Adobe
Hosted IBM Rackspace
Private Cloud NTT

Enterprise Microsoft
Other Cloud
Services

SaaS Salesforce Adobe

Ring Central
UCaaS
Mitel 8x8
Cloud Infrastructure

Public Dell EMC

Hardware &
Software

Cloud Cisco HPE

Private & Dell EMC

Hybrid Cloud Microsoft HPE
Center

Colocation & Digital Realty

Data

Leasing Equinix CyrusOne

0% 10% 20% 30% 40%
Growth from H1 2018

Figure 7: Cloud Market Growth & Segment Leaders – H1 2019

Based on projections from the IDC, worldwide spending on public cloud services and
infrastructure is forecast to double over the next five years. Growing from a $229 billion
run rate in 2019 to almost $500 billion by 2023. Driven by a five-year compound annual
growth rate (CAGR).

The IDC report identifies SaaS as the largest spending category, capturing more than half
of all public cloud spending throughout the forecast period. IaaS is reported as the second
largest spending category and is the fastest growing with a projected five-year CAGR of
32.0%. PaaS is the lowest spending category, with the second largest five-year CAGR of
29.9%.

Some of the major players in the Cloud Infrastructure Services Market are Amazon Web
Services (AWS), Microsoft Azure, and Google. They are the Big Three in the market.

29
CLOUD COMPUTING Cloud Computing Landscape & Value Drivers

• Azure is generally bought by new-gen and small- to-medium-size enterprises;

• Google Cloud is being used mostly by developers working on enterprise
applications; and
• AWS is being bought by everybody else—about one-third of the market (exactly
33 percent as of Q2 2019, according to Synergy Research), no less.

According to eWeek.com, a small group of competitors is outpacing the market in general

and slowly but surely growing their shares: IBM, Salesforce, Alibaba and Tencent. However,
in aggregate, Amazon is still bigger than the first three combined (Azure owns about 16
percent of the market, Google 8 percent, about IBM 7 percent). Oracle, Rackspace and
a slew of others are fighting to break out. We’ll take a close look at those players in a
subsequent article.

Global Cloud Infrastructure Services Market:

AWS, Azure and Google Lead the List

$25 Cloud Infrastructure Services Market

(IaaS, PaaS, Hosted Private Cloud)
Microsoft Google
Worldwide Revenues ($B)

16% 8%
IBM

Alibaba
Amazon
Salesforce
33%
Oracle
Tencent

Others

$0 Market Share Q2 2019

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
16 16 16 16 17 17 17 17 17 18 18 18 19 19

Figure 8: Global Cloud Infrastructure Services Market: AWS, Azure and Google Lead the List

3.5 CLOUD COMPUTING ADOPTION FACTORS

There have been host of factors that led to the increasing adoption of Cloud computing.

The primary reason for the rapid increase in Cloud adoption is the growth in demand for
virtual machines, memory, and storage. According to a study conducted by Verizon in 2013,
the use of cloud-based storage has increased by 90 percent during the time period studied
(January 2012 and June 2013), and cloud-based memory by 100 percent; this has been
driven largely by the shift of business-critical applications to the cloud.

30
CLOUD COMPUTING Cloud Computing Landscape & Value Drivers

Another key factor is the independence of firms get from disinvesting in capital expenditure
for costly IT infrastructure. The pay-as-you-go model provides the much-needed economic
flexibility to invest solely based on business demand. The overhead of procuring, implanting,
operating, maintaining, and upgrading of the infrastructure frees up the bandwidth of the
firms which can be better utilized for core business activities.

Another factor that led to the growth in adoption of cloud computing is the declining
cost over the years. Due to the network effect (declining per unit cost with growth in the
number of consumers), the cost of Cloud technology has been significantly coming down.
Firms have the bargaining power to procure right solution and services at a price affordable
to them. They also have the upper-hand to negotiate on the right Service Level Agreements
(SLAs) advantageous to them.

Another factor is the availability of cloud skills in the market. Early adopters of Cloud faced
significant challenges in implementation and support. The lack of adequate consultants with
right skills and the limited support capability of Cloud service providers had led CIOs to
spend sleepless nights trying to figure out solutions to the technical challenges. Nowadays
there is ample availability of consultants with Cloud computing skills. There is also marked
improvements in vendor’s customer support capability.

The Cloud technology maturity has also been another growth factor in Cloud adoption.
Due to the increased reliability of cloud technology, the user confidence around Cloud
adoption is on the rise. Cloud service providers and vendors can tailor the product according
to consumer needs. Cloud consumers now know better how they want to use Cloud for
their business needs. According to a Verizon study, organizations have moved beyond testing
and development in the cloud and are now running external-facing and critical business
applications.

Security is still one of the major impediments to Cloud adoption. While the industry has
seen marked improvements in addressing the security risks, the larger security concerns
around data privacy remains.

In conclusion, according to the Verizon study, “Enterprise cloud has reached a tipping
point. Organizations have seen the benefits cloud can provide – both in efficiency and
cost – and are ready to move an increasing number of mission-critical applications to cloud-
based infrastructure. However, for this to happen, cloud service providers must deliver to
enterprise-grade availability and security.”

31
CLOUD COMPUTING Cloud Computing Landscape & Value Drivers

According to Association of Information Systems, Cloud Computing adoption is driven by

four set of contexts – innovation, technology, organizational, and environment contexts.

Technology Context
6. Technology Readiness

Innovation Characteristics
1. Relative Advantage Organizational Context
2. Complexity CLOUD COMPUTING 7. Global Scope
3. Compatibility ADOPTION FACTORS 8. Top Management Support
4. Security Concerns 9. Firm Size
5. Cost Reduction

Environmental Context
10. Competitive Pressure
11. Regulatory Support

Figure 9: Cloud Computing Adoption Factors

32
CLOUD COMPUTING Cloud Computing Business Case

4 CLOUD COMPUTING
BUSINESS CASE
Most people think that Cloud Computing is a new technology model solution created to
solve specific problems around applications and IT infrastructure. While this is true to some
extent and cannot be debated otherwise, organizations willing to adopt Cloud would be
short- changed if they consider Cloud as just another technology platform. On the contrary,
they can derive greater value from Cloud Computing if they treat it as a business model.

Why should Cloud Computing be treated as a business model? Precisely because of the reasons
mentioned earlier in this book. Cloud computing is a business model because it changes
the way IT is delivered and consumed. Cloud is a flexible, scalable, and pay-per-use model
that helps business address cost and scalability challenges. With its pay-as-you-use model,
Cloud helps move IT costs from CAPEX to OPEX. It is scalable because IT capability can
be ramped up or down depending on the changing business demand. For new start-ups,
Cloud facilitates them to set up their IT environments quickly without creating an overhead
of IT expenditure. Organizations are moving to SaaS-based solutions that help them to
avoid large investments in licensing enterprise software. This aspect of cloud computing
business model has come as a boon to Small & Medium Enterprises (SME) who mostly
do not have the resources and funding to invest in expensive IT ecosystem.

Over the years, this has enabled organizations to channelize their savings from Cloud
adoption to invest in innovating their products and services. Cloud computing therefore
speeds up entry to new markets and shortens time-to-market of new products. This is the
reason Cloud computing is synonymously known for innovative IT service delivery model.

This does not mean that Cloud computing is a solution for everything or everyone. Cloud is
recommended in situations where there is likelihood of rapidly growing computing resource
demand, the need to reduce IT capex, rapid setup and deployment of IT environment,
increased business agility, and need to leverage the cloud computing infrastructure to a broader
set of users for per-unit cost reduction. Cloud computing is not usually recommended when
the demand for computing resource is likely to be stable over a period of time, sensitive
data is involved, heavy integration is involved between in- house and cloud applications;
the benefits of cloud computing is marginal as opposed to the effort involved in adopting
cloud, and there is not a clear business case for cloud adoption.

33
CLOUD COMPUTING Cloud Computing Business Case

There is also a clear distinction between what is feasible to be hosted on private cloud vis-à-vis
public cloud. Core business applications, applications built on significant internal intellectual
property (IP), mission critical applications are better candidates for private cloud. Similarly,
enterprise-wide collaboration tools used across geographical locations can be deployed on
private cloud. Data analytics platforms & storage solutions are best retained within the
boundaries of private cloud as data security is still a major concern for business. At the
other end of the spectrum, customer solutions such as Customer Relationship Management
(CRM), Enterprise Resource Planning (ERP) can be moved to public cloud as SaaS-based
solutions have gained customer trust and confidence. Disaster Recovery and backup solutions
can be moved to public cloud as they can lead to big cost savings.

34
CLOUD COMPUTING Cloud Computing Reference Framework

5 CLOUD COMPUTING
REFERENCE FRAMEWORK
For an organizations embarking on a Cloud computing journey, is there a framework that can
be used as a reference to make sense of various elements of Cloud computing? Fortunately,
the answer is yes. A vendor-neutral Reference Framework can be used to organize Cloud
computing concepts in a conceptual and logical structure.

In simple terms, a Reference Framework consists of two elements – a Reference Model and
a Reference Architecture. A Reference Architecture provides the decomposition, various
views, and best practices of the subject in discussion. Basically, it helps us to answer the
question, “what is the composition of the subject matter (Cloud computing in this case)?
What are the capabilities that Cloud Computing provides?” The Reference Model, on
the other hand, explains the concepts and relationships of the various components of the
Reference Architecture. Together the Reference Framework helps us to understand any
technical subject matter better.

There are various Reference Frameworks available for Cloud Computing. This is because
each Reference Framework is built around the viewpoint of a specific organization or person.
A Cloud service provider would define a Reference Framework that may differ significantly
from the one defined by a Cloud hardware vendor. There is no strictly mandated standard
for defining the Reference Framework. It is left to the judgement of the designing authority
to define the framework that best addresses its perspective and needs. However, the thumb
rule is any Reference Framework designed must be at a high-level and understandable.

There are several Cloud Computing Reference Architecture, Models and Frameworks.
Everware-CBDI – an innovator in architectures and practices for Cloud, Service and
Component based concepts, technologies and techniques – classifies Cloud reference models
as one of two styles:

1. Role-Based: Where activities or capabilities are mapped to roles such as cloud

provider or consumer.
a. DMTF Cloud Service Reference Architecture
b. IBM Cloud Computing Reference Architecture
c. NIST Cloud Computing Reference Architecture

35
CLOUD COMPUTING Cloud Computing Reference Framework

2. Layer-Based: Where activities or capabilities are mapped to layers in

architecture such as application or resource layers or to the service management
architecture or security architecture.
a. Cloud Security Alliance Reference Model is one of many layered models
showing the cloud ‘stack’
b. CISCO Cloud Reference Architecture Framework is an architecture of
architecture, placing Cloud on top of layers of Service, Security and
Technology architectures
c. IEFT Cloud Reference Framework goes into more depth, showing the
capabilities for each layer.

Everware-CBDI Reference Architecture

Everware-CBDI has taken the various elements from these different architectures, models
and framework and places them into a generic Reference Framework. It consolidates the
elements contained across the different reference architectures, models and frameworks for
Cloud Computing into a unified framework.

Cloud Computing Reference Framework

Cloud Computing Reference Model Process

Principles Maturity Level Meta Model Life Cycle Capability Model Streams
Elastic Level 1 Concepts Planned Architecture Consume
Self-Service Level 2 Packages Specified Framework & Provide
Process
Measured Level 3 Business Provisioned Manage
Lifecycle
Resource Pooling Level 4 Specification Certified Enable
Infrastructure
... Implementation Deployed
Operational Organization
Deployment Operation Infrastructure
Deployment Model Roles (Organization)
Service Retired Projects &
Public Cloud Consumer
... Programs
Private Cloud Provider
Management
Community Cloud Broker
Hybrid Cloud Auditor
Cloud Carrier
Cloud Computing Reference Architecture

Views Best Practice Architecture Service Layers Computing Layers Roles (Individual)
Business Standards Service ..aaS Client Cloud Provisioner
Specification Patterns Software SaaS Service Cloud Manager
Implementation Techniques Technology PaaS Application Cloud Architect
Deployment Deliverables IaaS Platform Cloud...
Technology Policy Storage
Infrastructure

Figure 10: Cloud Computing Reference Framework

36
CLOUD COMPUTING Cloud Computing Reference Framework

The above Reference Framework can then be mapped to the requirements of the different
scenarios. The mapping can be done against either roles or capability streams as shown in
the two tables below:

RAEW1 Consumer Provider Broker Auditor Carrier

Consume

Provide

Manage

Enable

Table – Mapping Process Activities to Roles

1
RAEW: Responsibility, Authority, Expertise, Work

Capability
Consumer Provider Broker Auditor Carrier
Streams

Architecture

Framework
and Process

Lifecycle
Infrastructure

Operational
Infrastructure

Organization

Projects and
Programs

Management

Table – Mapping Capabilities to Roles

It is up to the organization adopting the Reference Framework to manage its reuse effectively
minimizing the reinvention of the wheel.

37
CLOUD COMPUTING Cloud Computing Reference Framework

NIST Cloud Computing Reference Architecture

Let us look at another Reference Architecture developed by National Institute of Standards
and Technology (NIST) (U.S. Department of Commerce).

NIST’s reference architecture was developed as an Actor/Role based model that lays out the
central elements of cloud computing.

According to NIST, the overview of the Reference Architecture describes five major actors
with their roles & responsibilities using the newly developed Cloud Computing Taxonomy.
The five major participating actors are the Cloud Consumer, Cloud Provider, Cloud Broker,
Cloud Auditor and Cloud Carrier. These core individuals have key roles in the realm of
cloud computing. For example, a Cloud Consumer is an individual or organization that
acquires and uses cloud products and services. The purveyor of products and services is the
Cloud Provider. Because of the possible service offerings (Software, Platform or Infrastructure)
allowed for by the cloud provider, there will be a shift in the level of responsibilities for
some aspects of the scope of control, security and configuration. The Cloud Broker acts
as the intermediate between consumer and provider and will help consumers through the
complexity of cloud service offerings and may also create value-added cloud services as well.
The Cloud Auditor provides a valuable inherent function for the government by conducting
the independent performance and security monitoring of cloud services. The Cloud Carrier
is the organization who has the responsibility of transferring the data akin to the power
distributor for the electric grid. The Architectural Components of the Reference Architecture
describes the important aspects of service deployment and service orchestration.

The reference architecture contains a set of views and descriptions that are the basis for
discussing the characteristics, uses, and standards for cloud computing. This actor/role-based
model is intended to serve the expectations of the stakeholders by allowing them to understand
the overall view of roles and responsibilities in order to assess and assign risk. The NIST
cloud computing reference architecture focuses on the requirements of “what” cloud services
provide, not a “how to” design solution and implementation. The reference architecture is
intended to facilitate the understanding of the operational intricacies in cloud computing.
It does not represent the system architecture of a specific cloud computing system; instead
it is a tool for describing, discussing, and developing a system-specific architecture using a
common framework of reference.

38
CLOUD COMPUTING Cloud Computing Reference Framework

The Conceptual Reference Model

Below figure presents an overview of the NIST cloud computing reference architecture, which
identifies the major actors, their activities and functions in cloud computing. The diagram
depicts a generic high-level architecture and is intended to facilitate the understanding of
the requirements, uses, characteristics and standards of cloud computing.

Cloud Provider

Cloud Service Orchestration Cloud Broker

Consumer
Service Layer Cloud Service
Management
SaaS Service
Intermediation
PaaS
Cloud Auditor Business
IaaS Support

Security

Privacy
Service
Security Audit
Resources Abstraction Provisioning/ Aggregation
and Control Layer Configuration
Privacy Impact
Physical Resource Layer
Audit
Portability/ Service
Hardware
Interoperability Arbitrage
Performance
Facility
Audit

Cloud Carrier

Figure 11: NIST Conceptual Reference Model (Source: NIST)

As shown in above figure, the NIST cloud computing reference architecture defines five major
actors: cloud consumer, cloud provider, cloud carrier, cloud auditor and cloud broker. Each
actor is an entity (a person or an organization) that participates in a transaction or process
and/or performs tasks in cloud computing. Table below briefly lists the actors defined in
the NIST cloud computing reference architecture.

Figure 12 illustrates the interactions among the actors. A cloud consumer may request cloud
services from a cloud provider directly or via a cloud broker. A cloud auditor conducts
independent audits and may contact the others to collect necessary information. The details
will be discussed in the following sections and presented in increasing level of details in
successive diagrams.

39
CLOUD COMPUTING Cloud Computing Reference Framework

Actor Definition

A person or organization that maintains a business relationship with, and uses

Cloud Consumer
service from, Cloud Providers.

A person, organization, or entity responsible for making a service available

Cloud Provider
to interested parties.

A party that can conduct independent assessment of cloud services, information

Cloud Auditor
system operations, performance and security of the cloud implementation.

An entity that manages the use, performance and delivery of cloud services,
Cloud Broker
and negotiates relationships between Cloud Providers and Cloud Consumers.

An intermediary that provides connectivity and transport of cloud services

Cloud Carrier
from Cloud Providers to Cloud Consumers.

Table: Actors in Cloud Computing

Cloud Cloud
The communication path between a cloud
Consumer Auditor
provider and a cloud consumer

The communication paths for a cloud

auditor to collect auditing information

The communication paths for a cloud

broker to provide service to a cloud
Cloud Cloud
consumer
Broker Provider

Figure 12: Interactions between the Actors in Cloud Computing (Source: NIST)

The following interactions are possible between the actors.

1. A cloud consumer may request service from a cloud broker instead of

contacting a cloud provider directly. The cloud broker may create a new service
by combining multiple services or by enhancing an existing service. In this
example, the actual cloud providers are invisible to the cloud consumer and the
cloud consumer interacts directly with the cloud broker.

40
CLOUD COMPUTING Cloud Computing Reference Framework

Cloud Provider 1

Cloud Consumer Cloud Broker

Cloud Provider 2

Figure 13: Usage Scenario for Cloud Brokers (Source: NIST)

2. Cloud carriers provide the connectivity and transport of cloud services from
cloud providers to cloud consumers.

SLA SLA
1 2
Cloud Consumer Cloud Provider Cloud Carrier

SLA between cloud consumer SLA between cloud provider

and cloud provider and cloud carrier
Figure 14: Usage Scenario for Cloud Carriers (Source: NIST)

3. For a cloud service, a cloud auditor conducts independent assessments of the

operation and security of the cloud service implementation. The audit may
involve interactions with both the Cloud Consumer and the Cloud Provider.

Cloud Consumer Cloud Provider

Cloud Auditor

Figure 15: Usage Scenario for Cloud Auditors (Source: NIST)

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CLOUD COMPUTING Cloud Computing Maturity Model

6 CLOUD COMPUTING
MATURITY MODEL
Cloud Maturity Models are used to benchmark an organization against others in the industry.
A cloud maturity model (CMM) helps to answer the question “What should our journey
to cloud (or hybrid IT) look like?” By utilizing a CMM, an organization can analyze its
current state and plan the implementation of cloud technologies. With business objectives
as a parameter, the CMM defines a target state and then provides the keys to performing
a gap analysis.

Since Cloud adoption is a long-term incremental journey, a true awareness and understanding
of an organization’s current capability in Cloud computing helps in crafting a sustainable
strategy and architecture to harness the full benefits of Cloud, and reduce the risks
associated with Cloud adoption and transformation. Based on the Capability Maturity
Model Integration (CMMI), the Cloud Maturity Model measures Cloud capability against
six defined maturity levels.

There are various Cloud Computing Maturity Models available in the market. While a
detailed study of these various models is outside the purview of this eBook, it is worthwhile
to discuss at least one model so that you have a general idea of Cloud Maturity Model and
how it could be useful in defining a Cloud strategy.

The Open Alliance for Cloud Adoption (OACASM) Cloud Maturity Model (henceforth
referred to as OACA CMM) supports multiple perspectives in order to accommodate the
variety of cloud adoption patterns that different organizations will encounter. They explore
an organization’s maturity across each of the individual cloud service models: SaaS, PaaS,
IaaS, and Info-aaS.

Excerpts from OACA Usage Manual: Cloud Maturity Model (Revision 4.0):

The objective of the CMM is to help enterprise IT maximize the potential of hybrid IT
through development of a targeted road map, a set of plans and changes necessary to achieve
appropriate business objectives using cloud services and hybrid IT integration.

The CMM helps enterprises to:

1. Understand the different dimensions that constitute cloud maturity from the
perspectives of the consumers and providers of cloud services.
2. Define goals to be achieved with hybrid IT and develop a corresponding cloud
strategy.

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CLOUD COMPUTING Cloud Computing Maturity Model

3. Determine the target maturity levels required for enabling specific use cases for
cloud that the business may have, and thereby achieving their defined goals.
4. Develop a roadmap of projects to accomplish the changes that will raise
maturity levels for each cloud capability and domain to enable the achievement
of the desired use case or cases.
5. Develop focused investment initiatives that move selected cloud capabilities and
domains, targeting maturity levels that enable the business to achieve targeted
capabilities and use case enablement.
6. Steer priorities relating to enabling cloud service usage and adoption.
7. Leverage the OACA publications to identify characteristics and artifacts that
enable an organization to increase their cloud maturity and service success
through cloud service adoption.
8. Maximize the potential to achieve the expected benefits of cloud.

The CMM identifies five levels of cloud maturity, but depending on the business requirements,
it is not necessary for an enterprise to aspire to CMM Level 5 in all cases. Different levels
in the different domain capability areas may also be quite acceptable when they adequately
meet enterprise requirements. It is up to each enterprise to determine for itself where it
wants to be and what actions and enablers will take it there, per domain capability.

In addition, it is possible to provide IaaS, PaaS, or SaaS through a combination of legacy

systems, vested environments, multi-cloud and private and hybrid clouds. CMM Level 5
does not dictate pure public or SaaS-based systems. It describes a managed set of controls,
processes, and systems to consistently manage cloud services in line with business priorities,
with processes integrated and aligned across the enterprise.

As an enterprise progresses through introspection regarding the above, it is common to

identify islands of excellence within the enterprise, in contrast to other areas that may have
lower cloud maturity. This is normal and an indication of being at a level that is “Ad Hoc”
(Level 1) or “Repeatable/Opportunistic” (Level 2). A consolidated, cohesive enterprise-aligned
cloud strategy will enable consistent CMM measurement and rating of the entire enterprise
against the CMM. In turn, this will aid in developing a clearly defined road map that will
deliver on enablement and capabilities.

An enterprise could achieve a high CMM rating by:

1. Identifying consistent frameworks and controls

2. Enabling selected business systems according to a defined set of categorizations
3. Running according to a defined strategy in the cloud
4. Representing the characteristics and artifacts identified in the CMM model

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CLOUD COMPUTING Cloud Computing Maturity Model

The CMM considers the multiple layers of people, process, and technology across enterprise
IT in the context of the different operating models driven by IT service type and internal
and external delivery models.

The CMM analyzes maturity from two key perspectives

Non-technical Capability Technical Capability

Business support uses Technical support functions

The OACA Cloud Maturity Model helps build this road map by analyzing cloud maturity
from two key perspectives: (1) nontechnical enabling capabilities in specific domains and
(2) technical enabling capabilities in specific domains. These groupings include maturity
levels for the individual cloud service models such as SaaS, PaaS, IaaS, DBaaS, Platform
Integration-as-a-Service and Information-as-a-Service, among others. Each domain within
a capability is considered from the viewpoints of people, process, and technology.

The nontechnical capability addressed in the CMM provides a comprehensive view of the
maturity model’s stages through the lens of “business use of the cloud.” Across business
categories, this perspective includes cloud service models, cloud deployment models, and
capabilities for each cloud domain.

The technical capability perspective of the CMM provides a similar view of cloud capability
maturity through the lens of cloud and information and communications technology (ICT).

These perspectives on cloud maturity offer a way for an enterprise to plot its maturity level
in the context of several possible use cases. This enables an enterprise to select the use cases
that are most aligned with its business needs. Some enterprises are organized or targeted
toward business models, where one or more of the cloud service models are of little value
or produce an inverse total cost of ownership. Each enterprise can assess its maturity across
the cloud service model that is applicable to its enterprise, without the added complexity
of the service models that do not apply.

The CMM helps to establish a methodical and efficient journey to the cloud, aligned with
business objectives and likely cost-effective and comprehensive. It also shows how the
enterprise can increase its organizational ability to adopt cloud-based services within defined
objectives, governance, and control parameters.

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CLOUD COMPUTING Cloud Computing Maturity Model

As an organization matures, the use of cloud-based services becomes more sophisticated,

comprehensive, and optimized. The CMM plots the progression of structured cloud service
integration from a baseline, at which point no cloud solutions are used, through five
progressive levels of maturity, as shown in Figure 1.

Initial Ad Repeatable Defined Measured

None N/A Optimized
Hoc Opportunistic Systematic Measurable

Figure 16: The Cloud Maturity model has five progressive levels of maturity

Figure 2 provides a summary description of each maturity level. It does not differentiate
among the various types of cloud technology, cloud methodologies, or cloud deployment
models. Each of these factors will be considered as the progressive levels of cloud maturity
are explored in detail.

Legacy Applications Analysis of Current Processes for Cloud Tooling and Manual Federated,
on Dedicated Environments' Adoption Integration for Federation Interoperable, and
Infrastructure Cloud Defined Automated Cloud Open Cloud
Readiness Usage
There is no cloud Mapping and An approach has The approach has Cloud-aware Metrics are
approach analysis of cloud been decided upon been reviewed and applications are consistently gathered
being taken. No potential for existing and is opportunisti- accepted by affected deployed according and used to
elements of systems and services. cally applied. The parties. There has to business incrementally
cloud is being Awareness of cloud approach is not been buy-in to the requirements on improve the
implemented. computing is widely accepted and documented public, private, and capability. Assets are
established and redundant or approach and the hybrid platforms. proactively
some groups are overlapping approach is always The capability is maintained to ensure
beginning to approaches exist. (or nearly always) being measured relevance and
implement cloud May be informally followed. and quantitatively correctness. The
computing elements. defined or if managed via some potential for market
There is no cohesive documented, may type of governance mechanisms to be
cloud computing exist primarily as structure. used to leverage
plan being followed. "shelfware." Initial Appropriate metrics inter-cloud
benefits of leveraged are being operations has been
infrastructure. gathered and established.
reported.

45
CLOUD COMPUTING Cloud Computing Maturity Model

CMM 2 CMM 4
CMM 0 CMM 1 CMM 3 CMM 5
Repeatable Measured
Legacy Initial Ad Hoc Defined Systematic Optimized
Opportunistic Measurable
Legacy applications Analysis of current Processes for cloud Tooling and Manual Federation Federated,
on dedicated environment’s cloud adoption defined integration for interoperable, and
infrastructure readiness automated cloud open cloud
usage
• No cloud • Mapping and • An approach has • Affected parties • Cloud-aware • Capability
approach. analysis of cloud been decided upon have reviewed and applications are incrementally
• No cloud elements potential for and is applied accepted the deployed improves based on
implemented. existing systems opportunistically. approach according to are consistently
and services. • The approach is • The documented business gathered metrics
• There are some not widely approach is always requirements on • Assets are
awareness of cloud accepted and or nearly always public, private, and proactively
computing, and Redundant or followed. hybrid platforms. maintained to
some groups are overlapping • Governance ensure relevance
beginning to approaches exist. infrastructure is in and correctness.
implement cloud • Informally defined place that • The organization
computing or exists as measures and has established the
elements. "shelfware." quantitatively potential to use
• Initial benefits manages cloud market
realized from capability. mechanisms to
leveraged leverage inter-
infrastructure. cloud operations.

INCREASE IN
ANALYSIS CAPABILITY GAINS EFFICIENCY GAINS VELOCITY AND PROACTIVE
QUALITY

Figure 17: Open Data Center Alliance Cloud Maturity Model

Cloud Maturity Model—Level Progression

Progression through the maturity levels defined in the CMM is based on the analysis of
parallel specific domains, which are grouped into capabilities represented in Table 2 and
Table 3. At a high level, each of the CMM maturity levels may be understood as follows:

CMM 0: None
There are no virtualized environments and physical platforms and operation teams are siloed.
Processes are highly manual with the use of some tools for isolated activities. Automation
does not exist. There is little to no knowledge of cloud.

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CLOUD COMPUTING Cloud Computing Maturity Model

CMM 1: Initial/Ad Hoc

The existing environment is analyzed and documented for initial cloud potential. Pockets of
virtualized systems exist, for limited systems, without automation tooling, operated under
the traditional IT and procurement processes. Most of the landscape still runs on physical
infrastructure. The focus is on the private cloud, although the public cloud is used for
niche applications.

CMM 2: Repeatable/Opportunistic
IT and procurement processes and controls are updated specifically to deal with the cloud.
It is defined who may order services and service elements and how this is done. On-prem
Private cloud is fully embraced with physical-to-virtual movement of apps and the emergence
of cloud-aware apps.

CMM 3: Defined/Systematic
Tooling is introduced and updated to facilitate the ordering, control, and management of
cloud services. Risk and governance controls are integrated and more in line to support
cloud services into this control layer, ensuring adherence to corporate requirements and
local regulation. Complementary service management interfaces are operational. More
sophisticated use of SaaS is evident, and private PaaS emerges.

CMM 4: Measured/Measurable
Online controls exist to manage federated system landscapes, distributed data and data
movement, distributed application transactions, and cross-boundary interactions within the
cloud environment.

Defined partners and integration and connectivity exist, enabling dynamic movement of
systems and data, with supporting tool layer integration (e.g., service desk, alerting, commercial
systems, and governance). Cloud-aware apps are the norm, and PaaS is pervasive. Hybrid
apps develop across cloud delivery models.

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CLOUD COMPUTING Cloud Computing Maturity Model

CMM 5: Optimized
All service and application deployments are automated, with orchestration systems automatically
locating data and applications in the appropriate cloud location and migrating them according
to business requirements (such as agility, time-to-market and flexibility), transparently (e.g.,
to take advantage of carbon targets, cost opportunities, quality, or functionality).

Moving through the CMM levels allows an organization to achieve several key characteristics
in its cloud solution: federated, interoperable, and open standards. When these characteristics
area achieved, the organization enables new business functionality and benefits. These
benefits are the recommended results of positioning domain capabilities within the various
CMM levels: functional capability gains, efficiency gains, quality gains, velocity gains, and
“optimizations” such as cost and automation, i.e. alignment with the CI/CD pipeline.
Attaining these benefits ultimately results in powerful business strategy enablement.

According to OACA, these CMM levels enable the realization of several cloud characteristics
which in turn translate into the enablement of business functionality and value. These business
outcomes are the recommended results of positioning capabilities within the various CMM
levels: capability gains, efficiency gains, quality gains, and velocity gains, which ultimately
result in powerful business strategy enablement.

• Federated. Federation refers to the ability of identity and access management

software to be able to securely share user identities and profiles. This ability
allows users within a specific organization to utilize resources located in multiple
clouds without having to generate separate credentials in each cloud individually.
IT can manage one set of identities, authorizations, and set of security review
processes. From the user perspective, this enables seamless integration with
systems and applications.
• Interoperable. There are two key concepts of interoperability: (1) The ability to
connect two systems that are concurrently running in cloud environments, and
(2) the ability to easily port a system from one cloud to another. Both involve
the use of standard mechanisms for service orchestration and management,
enabling elastic operation and flexibility for dynamic business models, while
minimizing vendor lock-in.
• Open Standards. The term “open” refers to both software and standards. Open
source software operates at a fast rate of change supported by diverse, vibrant
community updates. These frequent update cycles provide access to the latest
features and capabilities, including performance and efficiency improvements.
The use of common APIs or abstraction layers makes it easier for end users
to rapidly consume cloud services from different providers to meet business
requirements. Even if the software is not open source, it should adhere to open
standards, in order to maximize the benefits of cloud deployment.

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CLOUD COMPUTING Cloud Computing Maturity Model

Maturity Level Outcomes

In order to effectively steer the control sets for the various domains, a set of outcomes for
each domain are defined. These can also be used to help enterprises determine their target
state for that domain. Many of the domains are interdependent—that is, one cannot be at
a certain maturity level without the other being at a supporting maturity level, but not all
domains are interdependent.

CMM 0 CMM 1 CMM 2 CMM 3 CMM 4

Domain (none, n/a) (initial, ad hoc) (repeatable, (defined, (managed,
opportunistic) systematic) measurable)
Expected Expected Expected Expected Expected
Outcome at Outcome at Outcome at Outcome at Outcome at
CMM Level 0 CMM Level 1 CMM Level 2 CMM Level 3 CMM Level 4
Control
Question
(People, Process (People, Process (People, Process (People, Process (People, Process
& Technology & Technology & Technology & Technology & Technology
aspects) aspects) aspects) aspects) aspects)

Figure 18: Example Domain Outcomes

CMM Domains
The CMM domains are divided into two primary capability areas: technical and nontechnical.
Each capability area encompasses a set of appropriate domains such as finance, governance,
and portfolio management. A consultant or auditor can select and review the capability areas
and domains that best apply to an organization’s use case. In order to create an effective
road map and priority plan using the CMM, avoid reviewing too many domains at once.

Cloud Maturity Model—Non-Technical Capability

The nontechnical capability and the associated business domains and benefits are depicted
in the figure below

49
CLOUD COMPUTING Cloud Computing Maturity Model

ple cess
Peo Pro ology
Techn
Finance

Enterprise Strategy

Structure

Culture Capability

Governance Efficiency

Skills Velocity
Non
Technical Capability
Compliance Flexibility

Business Process Quality

Procurement

Commercial

Portfolio Mgmt.

Projects

DOMAINS BENEFITS

Figure 19: Business Domains

Cloud Maturity Model—Technical Capability

The technical capability and the associated business domains and benefits are depicted in
the image below.

50
CLOUD COMPUTING Cloud Computing Maturity Model

ple ces
s
ology
Peo Pro Techn

IT Architecture

Applications

Management Tools

Operation(IT) Processes

DevOps

Security
Capability
IaaS
Efficiency
PaaS
Velocity
Technical Capability SaaS
Flexibility
IPaaS
Quality
Information Services

Data

Network

AI

IOT

APIs

Config Mgmt.

DOMAINS BENEFITS

Figure 20: Technical Domains

It is not necessary for an organization to aspire to CMM Level 5 in all cases – different levels
in the different capability areas may be quite acceptable and may meet that organization’s
requirements adequately. It is up to each organization to determine for itself where it wants
to be, and what actions and enablers will take it there, per capability.

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CLOUD COMPUTING Cloud Computing Maturity Model

The key takeaway from the various perspectives of OACA Cloud Maturity Model is that
it helps an organization to define a well-thought out Cloud adoption roadmap. The cloud
adoption roadmap provides an end-to-end visualization for how the technical use of cloud
technologies in the enterprise develops over time. This adoption roadmap gives context to
technical planning and assists organizations in quantifying existing deployments and the
steps that following from that point.

Start Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

End User Simple SaaS Simple SaaS Complex SaaS Hybrid SaaS
Legacy Apps on Dedicated Infrastructure

Cloud-Aware Apps Cloud-Aware Apps Cloud-Aware Apps

Application Enterprise Legacy Enterprise Legacy Enterprise Legacy Enterprise Legacy

Federated
Developer Apps Apps Apps Apps
Interoperable, and
Complex Compute Open Cloud
Application Simple Compute IaaS
Private PaaS Hybrid PaaS
Owner IaaS Simple Compute
IaaS

Compute, Storage, Compute, Storage,

IT Operations Full Private IaaS Hybrid IaaS
& Network & Network

Figure 21: Open Data Center Technical Cloud Adoption Roadmap

The CMM provides a methodology to achieve the objectives that the enterprise seeks from
cloud services and the establishment of a hybrid IT landscape. The CMM helps to identify
the different layers that must be considered between the consumer and the provider. It also
provides a method for identifying gaps and provides guidance with suggested outcomes,
helping to determine what should be done to close gaps in order to improve maturity. The
CMM is also useful for both consumers and providers to prepare their requirements and
their service offerings in a structured, sustainable way. Using the CMM, an organization
can eliminate the risk associated with the approach of moving to the cloud and just hoping
for the best, instead developing a road map that enables truly successful cloud adoption.

52
CLOUD COMPUTING Cloud Computing Pricing Model

7 CLOUD COMPUTING
PRICING MODEL
A significant amount of innovation has gone into pricing Cloud Computing services
correctly. Unlike fixed-price models of IT resources with definite demand projections, the
pricing of Cloud Computing is based on amount of resources allocated. This makes Cloud
pricing constitute a significant portion of variable pricing. Think of Cloud pricing model
similar to the utility services you consume. You pay electricity bill for the number of units
you consumed, or the amount of your water consumption bill is proportionate to the
amount of consumption. The bill varies as per your consumption. While the pricing of
Cloud computing is similar in concept, there is a slight variance as compared to the utility
service pricing. The shift from fixed-price model to variable-price model mainly happened
because not all users have the same need; hence charging them for units they don’t consume
is not considered fair. Cloud Computing pricing varies according to its various models. A
SaaS model will be priced differently than an IaaS model. The table below shows the key
components of Cloud pricing based on the Cloud service model.

IaaS Amount of resource allocated No. of physical or virtual machines, IP addresses,

firewalls, load balancers, virtual machine images,
virtual local area networks (VLANs)

PaaS Usage of Computing platform Operating systems, hardware, programming

language execution environments, servers, and
databases.

SaaS Usage of software applications No. of software licenses

Cloud computing pricing consists of two main approaches – fixed and dynamic. In fixed
pricing, the customer the same amount always. This includes the pay-per-use model, in
which the customers pays for the amount they consume of a product or the amount of
time they use a certain service. In dynamic pricing, the pricing varies according to the level
of consumption, service features, Quality of Services (QoS), etc. A new pricing model that
is being increasingly adopted is the market-dependent pricing; this pricing depends on the
real-time market conditions such as bargaining, auctioning, demand behavior, and yield
management.

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CLOUD COMPUTING Cloud Computing Pricing Model

Note the key drivers of Cloud Computing pricing are on-demand self-service, range of
network access, speed of elasticity, resource pooling, and quality of service. The most
important factors that influence pricing in cloud computing are:

• Initial Costs: This is the initial setup costs the service provider spends to buy
resources.
• Contract Period: This is the period the customer will lease resources from the
service provider. Longer the contract period, lower is the subscription price.
• Quality of Service: This is the quality of service the service provider guarantees
to meet. This is the mostly debated component of Cloud pricing. Better the
QoS guaranteed, higher is the pricing.
• Age of resources: This is the age of the resources employed by the service
provider. The older the resources are, the lower the price charged will be.
• Cost of maintenance: This is the amount the service provider spends to
maintain the cloud service.

In general terms, the cloud pricing model consists of three main components: actual cloud
pricing approach, Quality of Service (QoS), and Utilization/Contract Period.

PRICING
MODELS

Fixed Fee + Per Competition- Service feature

Pay-as-you-go Hybrid Pricing Dynamic Market
Unit Price based Pricing dependent

Value-based Value-based Yield

Subscription Per Unit Price Bargaining
Pricing Pricing Management

Per Unit Price Cost-based Volume

Fixed Price Reverse Auction Auction
with Ceiling Pricing dependent

QUALITY OF
SERVICE

Service
Performance Privacy Reliability Interoperability Transparency
Assurance

Service
Availability Security Accountability Cost Stability
Response Time

Service
Reliability Scalability Agility Usability Sustainability
Response Time

CONTRACT
PERIOD

Pay Per Use Subscription Perpetual

Figure 22: Key Components of Cloud Computing Pricing

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CLOUD COMPUTING Cloud Computing Pricing Model

As mentioned earlier, Cloud computing pricing models have undergone tremendous innovation
and changes in recent years. Partly since a Cloud service provider’s incoming cash flow may
decrease because of consumers’ preference for pay-per-use mechanism, industry has come up
with various Cloud pricing model. The table below provides a quick summary of these models.

Pricing Model Approach

Pay-as-you-go model Price is set by service provider

and remains constant

Subscription Price is based on the period of subscription

A novel-financial economic model Usage-based

Pay-for-resources model Cost-based

Pricing algorithm for cloud computing Real-time pricing

Dynamic resource pricing on federated clouds Auction-based pricing

Genetic model for pricing in

Real-time pricing
cloud computing markets

Datacenter net profit optimization

Based on job scheduling
with individual job deadlines

Price set according to the value

Value-based pricing
perceived by the customer

Price set by adding a profit

Cost-based pricing
element on top of cost

Competition-based pricing Price set according to competitors’ prices

Price set according to what the

Customer-based pricing
customer is prepared to pay

Price changed according to

Hybrid pricing
the job queue wait times

In short, the underlying theme of Cloud computing pricing is “pay-as-you-go” model. It is

advised to prospective consumers of Cloud Computing services that they should negotiate
adding Quality of Service (QoS) attributes to the pricing set by Cloud service providers.
This will ensure that the pricing is not biased towards the service provider; and they have
a pressure to deliver on consistent performance and Quality of Service.

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CLOUD COMPUTING Cloud Computing Return on Investment (ROI)

8 CLOUD COMPUTING RETURN

ON INVESTMENT (ROI)
Until recently business viewed Cloud Computing Return on Investment (ROI) through
capacity-utilization lens primarily because it wanted to avoid the cost impact of over-
provisioning and under- provisioning. The on-demand service model and ability to pay-
as-you-go enables business to provision for the service just when they required it (without
worrying about the fixed cost and up-front investment cost). To a large extent, the Capacity
vs. Utilization model sufficed for a practical ROI model as it focused on operational efficiency.

As the industry matured, business realized that there could be other drivers to measure the
ROI. In addition to operational efficiency, performance efficiency is another critical aspect
they cannot overlook. Not all cloud computing service providers provide the same level
of Quality of Service (QoS). Hence business has started to push service providers to add
stringent Service Level Agreements (SLA) to the service agreements/contracts. A common
QoS Key Performance Indicator (KPI) used is Availability and Recovery SLA – an indicator
of availability performance compared to current service levels.

The next driver of ROI is the security assurance. For business involved in sensitive data
management (e.g. financial services, healthcare industry), data security and risk management
are critical components of their business. They are willing to pay more for a service if they
are assured that their data would be protected and not compromised with.

Depending on the nature of the business and its requirements/expectations from cloud
service providers, organizations use a plethora of combinations of KPIs and ROI models
to measure the cloud ROI. The key ROI drivers are still a continuation of traditional IT
drivers – time, cost, quality, and profitability. Based on the specific need of the business,
parameters such as compliance, risk management, sustainability, etc. are added.

The Capacity-Utilization Curve

The famous graph used by Amazon Web Services illustrating the capacity versus utilization
curve has become an icon in Cloud Computing. The model illustrates the central idea
around Cloud-based services enabled through an on-demand business provisioning model
to meet actual usage.

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CLOUD COMPUTING Cloud Computing Return on Investment (ROI)

Predictions Cost Capacity-Cost

Money Performance

Capacity Large
Capital
You just lost
Expenditure
customers
Compute
Storage
Opportunity
Cost

Predicted Demand Actual Demand Time

Traditional Hardware Committed Cloud
Figure 23: The Capacity vs. Utilization Curve (Source: Amazon Web Services)

The Open Group: Why this matter to business is that one of the core precepts of Cloud
Computing is to avoid the cost impact of over-provisioning and under-provisioning. This is
in addition to the opportunity for cost, revenue, and margin advantages of business services
enabled by rapid deployment of Cloud services with low entry cost, and the potential to
enter and exploit new markets. We contend that in years from now, when Cloud Computing
is seen in a historical context, the capacity versus utilization curve will be an iconic model
that had the same effect as previous well-known business models.

The Open Group introduced a key approach to measure Cloud computing ROI by giving
an overview of Cloud KPIs and metrics.

Excerpts from The Open Group - Building Return on Investment from Cloud Computing:

Developing ROI models that show how Cloud Computing adoption can benefit both
business and IT consumers and providers involve examining the key technology features
and business operating model changes.

This section gives an overview of ROI models to support Cloud Computing assessments
and business cases in two aspects:

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CLOUD COMPUTING Cloud Computing Return on Investment (ROI)

• Key Performance Indicator ratios that target Cloud Computing adoption,

comparing specific metrics of traditional IT with Cloud Computing solutions.
These have been classified as cost, time, quality, and profitability indicators
relating to Cloud Computing characteristics.
• Key Return on Investment savings models that demonstrate cost, time, quality,
compliance, revenue, and profitability improvement by comparing traditional IT
with Cloud Computing solutions.

The overview of Cloud Computing ROI models considers both indicators and ROI viewpoints.

Cloud Computing ROI Models Cloud Computing KPIs

Optimizing Workload -
Speed of Availability vs. Workload- Capex vs.
TIME Cost of Predictable
Reduction Recovery SLA Variable Cost Opex Costs
Capacity Costs

Optimizing Optimizing Workload

Speed of Workload vs. Instance to Ecosystem -
COST Cost of Ownership Type
Reduction Utilization % Asset Ratio Optionality
Capacity Use Allocations

Optimizing
Green Costs SLA Response Intelligent
QUALITY Cost of Experiential
of Cloud Error Rate Automation
Capacity

Market
Optimizing Revenue
MARGIN Disruption
Margin Efficiencies
Rate

Figure 24: Cloud Computing ROI Models and KPIs

Cloud ROI Cost Indicator Ratios

Cloud Computing ROI Models Cost Indicator Ratios

Availability
Indicator of availability performance Workload versus Indicator of cost-effective Cloud
versus Recovery
compared to current service levels Utilization % workload utilization
SLA

Workload- Workload size versus Memory/

Indicator of Capex costs for Workload type
Predictable Processor distribution. Indicator of
on-premise ownership versus Cloud allocations
Costs % IT asset workloads using Cloud

Indicator of % and cost of

Workload- Indicator of Opex costs for Instance to Rationalization/Consolidation of IT
Variable Costs on-premise ownership versus Cloud Asset ratio assets. Degree of Complexity
reduction (%)

Indicator of on-premise physical Indicator of number of commodity

Capex versus Ecosystem-
asset TCO versus Cloud TCO assets, APIs, Catalog items,
Opex Costs Optionality
self-service

Figure 25: Cloud ROI Indicator Ratios (Source: The Open Group)

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CLOUD COMPUTING Cloud Computing Return on Investment (ROI)

Cloud ROI Time Indicator Ratios

Cloud Computing ROI Models - Time Indicator Ratios

• The degree of service responsiveness

Timeliness
• An indicator of the type of service choice determination

• The latency of transaction

Throughout • The volume per unit of time throughout
• An indicator of workload efficiency

• The frequency of demand and supply activity

Periodicity
• The amplitude of the demand and supply activity

Temporal • The event frequency to real-time action and outcome result

Figure 26: Cloud ROI Time Indicator Ratios (Source: The Open Group)

Cloud ROI Quality Indicator Ratios

Cloud Computing ROI Models - Quality Indicator Ratios

• The quality of perceived user experience of the services

Experiential
• Quality of user interface design and interaction – ease of use

SLA Response • Frequency of defective responses

Error Rate

Intelligent
• The level of automated response (agent)
Automation

Figure 27: Cloud ROI Quality Indicator Ratios (Source: The Open Group)

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CLOUD COMPUTING Cloud Computing Return on Investment (ROI)

Cloud ROI Profitability Indicator Ratios

Cloud Computing ROI Models - Profitability Indicator Ratios

Revenue • Ability to generate margin increase per revenue

Efficiencies • Rate of annuity improvement

Market Disruption • Rate of revenue growth

Rate • Rate of new product market acquisition

Figure 28: Cloud ROI Profitability Indicator Ratios (Source: The Open Group)

Cloud ROI Savings Models

Cloud Computing ROI Savings Models

Time Cost Quality Profitability

Speed of Reduction Speed of Reduction Green costs of Cloud Optimizing Margin

• Rate of change of • Rate of change of • Green sustainability • Increase in

TCO reduction by TCO reduction by revenue/profit
Cloud adoption Cloud adoption margin from Cloud
adoption

Optimizing time to Optimizing cost of Optimizing cost to

deliver/execution Capacity deliver/execution

• Increase in • Aligning cost with • Reduced supply

provisioning speed usage, Capex to chain costs
• Speed of Opex utilization • Flexibility/choice
multi-sourcing pay-as-you-go • Lower error rates
savings from Cloud • Cost of errors
adoption

Optimizing cost of
Capacity

• Increase in
provisioning speed
• Speed of
multi-sourcing

Figure 29: Cloud ROI Savings Ratios (Source: The Open Group)

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CLOUD COMPUTING Is Cloud Computing Right Fit for Your Organization?

9 IS CLOUD COMPUTING RIGHT

FIT FOR YOUR ORGANIZATION?
There is no straight forward answer to this question. Whether cloud computing is right
solution for you depends on various factors:

• Total Cost of Ownership (TCO): Since cost savings is one of the most
important decision factors for opting for Cloud solution, it needs to be assessed
what impact it would have on the TCO. A thorough TCO analysis needs to be
done. The actual value (value realized after adopting Cloud) vs. Perceived value
(expected value perceived before adopting Cloud) may be marginal for some
organizations if other non-tangible factors are considered (e.g. data security,
implementation ease, support availability, Quality of Service, etc.).
• Data Security: Data security is still one of the top fear factors for enterprises.
There have been ample evidences of breach of data security in recent years. The
high-profile Sony hack is now famous in the industry. In 2014, JP Morgan
Chase saw 80 million records breached for use of identity theft. In the same
year, Apple iCloud was a victim of hacking of major celebrity accounts, leading
to the release of private photos and videos to public domain. If your business
involves dealing with mission critical accounts and sensitive confidential
customer information, conduct proper risk assessment and evaluation of cloud
service provider. Perform proper and regular risk assessments to identify where
the cloud service provider stores and transmits valuable data. In such cases,
opting for private cloud could be a better option than public cloud.
• Compliance and Governance: Cloud computing gets increasingly complex
(for both Cloud service providers and consumers) when it comes to legal,
regulatory and compliance issues. There are a host of regulations to deal with.
There are government regulations such as Sarbanes-Oxley and European Union
Data Protection Act, and industry regulations such as PCI DSS for payment
cards, and HIPAA for healthcare. Additionally, there are geo-specific regulations
such as country and state laws to deal with. Therefore, before embarking on a
Cloud solution (for service consumers), evaluate how creating and implementing
measures to comply with the regulations is going to add to the existing
governance workload. Check with your service providers where Cloud data
centers are located; and ascertain whether the regulations permit storing data
outside the country. For example, the EU Data Protection Act mandates keeping
personal information within the European Union. If an organization is storing
health-related information regardless of which industry it belongs to, then it

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CLOUD COMPUTING Is Cloud Computing Right Fit for Your Organization?

is subjected to HIPAA. Hence work closely with your cloud service provider
to identify all legal and regulatory requirements, and the steps to meet these
regulations. Even if you are dealing with a third-party provider, subject them to
the same contractual clauses as you would do for your primary supplier. After
all, non-compliance could be costly. The Payment Card Industry (PCI) can
impose fines of up to $100,000 per month for violations to its compliance.
• Ease of Integration: Determine how easy it is to integrate the cloud solution
to your existing on-premise data center. Check for interoperability with your
corporate applications, custom applications, in-house developed solutions, and
non-standard interfaces.
• Service Level Agreements (SLA): A carefully-crafted SLA is paramount to
receiving the right Quality of Service (QoS). Note that by adopting cloud
services, you may be giving up control of your ability to manage availability,
performance, maintainability, and timely support as you would have with your
in-house infrastructure. Therefore, negotiate the process, control mechanisms,
and SLAs tightly with your service provider to guarantee consistent QoS.

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CLOUD COMPUTING Cloud Computing Adoption Roadmap

10 CLOUD COMPUTING
ADOPTION ROADMAP
The Cloud Computing adoption plan depends on the cloud model one opts for. If the
requirement is simply for SaaS or PaaS solutions, the adoption plan is straightforward. One
must assess the business application functionality that one wants to outsource, determine
the right cloud solution and vendor, and procure the cloud services.

For IaaS adoption, especially for organizations that have a significant investment in infrastructure
CAPEX, the migration to Cloud depends on several factors. The basic requirement is to
leverage the existing infrastructure fully through virtualization, and other related concepts.

In general, the Cloud Computing adoption roadmap includes the following approach:

Cloud

Manage Change & Cloud Landscape

Select best-fit Cloud Partner

Define Cloud Architecture

Virtualize & Standardize

Conduct Proof of Concept

Establish Business Case

Assess Cloud Suitability

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CLOUD COMPUTING Cloud Computing Adoption Roadmap

Cloud Computing Adoption

Model

Manage Change & Cloud Landscape

Adopt Cloud (Private, Public, Hybrid)

Select best-fit Cloud Partner

Define Cloud Architecture

Virtualize & Standardize

Conduct Proof of Concept

Establish Business Case

Assess Cloud Suitability

Figure 30: Cloud Computing Adoption Model

1. Determine what to move to Cloud – Assess the business needs and what you
will migrate to cloud. Prepare an inventory of workloads that you want to
procure from Cloud. Some of the common workloads that are readily available
from Cloud are in the areas of analytics, infrastructure such as storage, backup,
applications, collaboration tools, infrastructure compute, disaster recovery,
business processes, and so on. Once you decide the service you will procure
from Cloud, define the parameters such as service availability requirements,
no. of users (for SaaS solutions), subscription model, support model and such
things. This step is mainly to come up with a clear requirements and roadmap.
2. Assess Cloud Suitability: The first step is to assess the need to move to Cloud
or procure Cloud services. Assess whether the business functionality is core to
business, whether a Cloud-based solution is worth the risks associated with it
(i.e. data theft, service downtime, etc.).
3. Establish Business Case: Establish clear business case for cloud adoption.
Determine the financial and non-financial benefits to be realized over medium
to long term (3+ years).
4. Conduct Proof of Concept (PoC): The safest option is to conduct a small
PoC to validate whether the Cloud model really works for you. Lots of cloud
service providers provide trial period to try out their Cloud solutions. During
the PoC stage, assess the technical feasibility of integrating in-house solutions
with Cloud solutions.

64
CLOUD COMPUTING Cloud Computing Adoption Roadmap

5. Virtualize and Standardize: As mentioned earlier in the document, fully

leverage the capability of virtualization before moving to Cloud. Virtualization
provides the same benefits as those provided by Cloud services. There could be
lots of unutilized capacity in your infrastructure; virtualization enables you to
optimize them fully. Also standardize your process and technology (software,
hardware, tools, etc.) so that you can avail standardized cloud services.
6. Lay Cloud Foundation: Lay a clear Cloud computing foundation if you have
a long-term roadmap for moving to Cloud. Define reference architecture and
scalable application architecture including an integration roadmap. A well-defined
architecture will help in managing the change and impact of cloud adoption.
7. Select Cloud Partner: Carefully evaluate the Cloud service partner. Assess
their capability, strengths/weaknesses, and their ability to meet your support
and service requirements. Determine how safe is your data in their Cloud
environment and what preventive mechanisms they have in place for any
eventualities. Ask for relevant case studies and do reference checks if needed.
The key is to determine the level of trust you can place on your cloud partner.
8. Manage Cloud Infrastructure: This is post-cloud migration activity. This
should include managing your cloud infrastructure by enabling self-service
features such as ramping up/down your demand (e.g. storage needs), change
subscription models, support services, etc. The idea is to retain some control to
yourself, rather than depending completely on the service provider.

65
CLOUD COMPUTING Public Cloud Migration Requirements

11 PUBLIC CLOUD MIGRATION

REQUIREMENTS
Successful cloud migration requires an overhaul of organization structure, processes and
technology, and a clear understanding of business impact and risks.

Public Cloud Migration Requirements

Consumer Service
Cloud Provider Technology Security
(Organization) Management

Service Level Infrastructure

Cloud Strategy Legal Data Privacy
Management Capacity
Contract Information Security
Maturity Assessment Governance Interoperability
Management Management
Regulatory Identity and Access
Cloud Business Case Qos Management Data Portability
Compliance Management
Application
Resource Planning Audit Service Availability Security Governance
Development/
Support
Vendor Selection Business Continuity

Disaster Recovery
ROI Model
Plan
Change
Management

Figure 31: Public Cloud Migration Requirements

One of the key pre-requisites for moving to Cloud is to fully leverage the capability and
benefits of virtualization. In most cases, virtualization provides the same benefits as those
provided by Cloud computing. The key benefits of virtualization are:

a. Provisioning of available capacity can be procured quickly to meet business

demands.
b. Significant infrastructure management efforts are minimized by adoption of
virtualization tools.
c. It eases in managing the elasticity and scalability of demand as ramping up or
down the required infrastructure capacity is easy.
d. Reduced OPEX due to optimization of available infrastructure.
e. Reduced CAPEX due to sharing of assets
f. Increased utilization and availability of infrastructure.
g. Reduced Total Cost of Ownership (TCO) as depicted in the figure below.

66
CLOUD COMPUTING Public Cloud Migration Requirements

CITEIS TCO and Provisioning Times

Cloud Brings Agility and Cost Benefits

Compute TCO
VIRTUALIZATION  UNIFIED COMPUTING  CLOUD
($/Qtr/OS instance)
$4,000
$3,500
TCO Physical
$3,000
Average TCO
$2,500
$2,000
TCO Virtual
$1,500 TODAY
$1,000
$500 -37% -32% -22%
$0
Current state: 40/60% Target state:100%
Legacy (rackmount): Legacy: medium
Legacy/UCS: 80% UCS/Cloud: 80%
all physical virtualization (54%)
Virtualized virtualization

Delivery 6 - 8 weeks 2 - 3 weeks 15 mins VM 15 minutes

Time (on demand) (manual) (2-9 days E2E) (Self-service)

Figure 32: Virtualization and Cloud Computing TCO Source: CISCO

If virtualization is as good as Cloud computing and both are complimentary to each other,
how does organizations decide which option to opt for? The simple answer is, it depends. It
depends on the type of organization, and the CAPEX/OPEX spent, scalability requirements,
security needs, etc. One should also note the key difference between virtualization and Cloud.

While Cloud mostly includes the virtualization capability, additionally Cloud provides benefits
such as self-service, elasticity, automated management, scalability and pay-as you go service
that is not inherent in virtualization. Smaller organizations that have fewer IT staff, less
prone to security risks, and more OPEX oriented are likely candidates for adopting cloud
computing. Cloud is suitable for such organizations who want to hit the ground running,
keep IT costs under control by only paying for usage they consume. On the other hand,
large organizations that have invested heavily in CAPEX, have unique business applications
that may pose challenge integrating with Cloud environment, and have better need for
security controls may want to continue with virtualization of current infrastructure. Such
large organizations usually maximize the power of virtualization before going for low-hanging
Cloud services such as backup, storage scalability, SaaS-based solutions for non-core business
functionalities, etc.

The key point to note is: Virtualization is fundamental technology on which cloud computing
is built; it makes Cloud computing work. Hence both are not interchangeable. Virtualization
is employed locally, while virtualization in cloud computing is accessed as a service.

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CLOUD COMPUTING Public Cloud Migration Requirements

According to Gartner, “cloud services can initially be more expensive than running on-
premises data centers. [However, it also proves that] cloud services can become cost-effective
over time if organizations learn to use and operate them more efficiently.” The statement
is backed by an example of workload migration for 2,500 virtual machines from an on-
premises data center to Amazon Web Services EC2. The example TCO (shown in Figure
1) shows an initial uptake in cloud costs and a steady decline as soon as organizations learn
how to apply cost optimization best practices (as described in this other framework). The
chart also shows how on-premises costs may have a long tail as organizations take time to
shut down their data centers.

Example TCO of Migration to Cloud IaaS Over Three Years

On-premises costs Migration investments Cloud costs Efficiency gains
$800,000

$700,000

$600,000
Rightsizing
$500,000
Test/POCs Scheduling Policies
$400,000
55%
$300,000
Reserved Instances
$200,000

$100,000

$0
Y1Q1 Y1Q2 Y1Q3 Y1Q4 Y2Q1 Y2Q2 Y2Q3 Y2Q4 Y3Q1 Y3Q2 Y3Q3 Y3Q4
-$100,000
Migration Migration Data Center
Starts Completed Shut Down

Figure 33: Example TCO of Migration to Cloud IaaS Over Three Years (Source: Gartner)

Therefore, organization should bear in mind that the overall ROI from investing in Cloud
computing may be negative in the short term. The ROI turns positive after a few years
once the cloud environment is stabilized and hefty investments in transformation is over.

68
CLOUD COMPUTING Cloud Implementation Challenges

12 CLOUD IMPLEMENTATION
CHALLENGES
Cloud Computing has its own pitfalls when it comes to implementation. Implementation
challenges may happen outside the boundaries of an organization – in a realm not in
organization’s total control. There are challenges around security, risks, regulations, etc. It
is worthwhile to highlight the most common challenges surrounding Cloud computing
deployments.

• Regulatory challenges: Some cloud service providers may not be familiar with
all the security requirements that are unique to each country. There are host of
regulations around data center locations, general security risks, data loss and
privacy risks, violation of intellectual property rights etc.
• High deployment costs: Most often than not, organizations realize that the one-
time cost for Cloud deployment, integration and transition may be higher than
expected. In the long run, does the benefits from Cloud computing offset this
cost? This is something that every cloud adopter must address.
• Data portability and interoperability: There is a lack of standards on data
portability and interoperability between cloud service providers. Hence there
is an inherent risk that cloud service consumer may get locked into a Cloud
product/ vendor. Hence it is best advised to avoid cloud solutions that lack
inter-operability.
• Integration challenges: Integration with existing on-premise architecture is
a big challenge when it comes to Cloud deployment. A make of servers in
an organization’s data center may not be compatible with the infrastructure
provided by the Cloud providers. This mostly happens if the organization
persists with legacy infrastructure that has not been upgraded to recent versions.
Cloud providers mostly adopt the latest technologies to be able to leverage
virtualization as well as establish a common infrastructure platform that is likely
to cater to diverse consumers’ environment.
• Managing change: Adopting cloud services results in significant disruption to
business. Organizations have still not geared up to operating in an environment
where cloud computing is the norm. Who do business users reach out to when
they need urgent changes in the applications, or the core business application
is down? How does in-house IT department manage the crisis when the
management of application resides with the cloud service provider? Will not the
ability to address business challenges lead to erosion of trust between IT and
business? Hence a change management process related to cloud computing must
be clearly defined.

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CLOUD COMPUTING Cloud Implementation Challenges

• Governance and Control: Organizations are yet to put in place management

capabilities and processes of operating with cloud services. Processes need to be
defined on supervising and managing cloud usage, performance, scalability, SLAs,
and any unplanned downtime. For example, Amazon Web Services (AWS) has a
shared responsibility model between AWS and the customer. AWS is responsible
for “Security OF the Cloud”; Customer is responsible for “Security IN the
Cloud.” Therefore, it is important for cloud consumers to go for robust IT
governance and control processes. Commoditization vs. Customization: A major
challenge is how to balance between commoditization and customization. Cloud
service providers are looking to commoditize their services, cloud consumers may
need to go for specific customized services to achieve business differentiation?
How can one reconcile the two?
• Managing the vendors: Most cloud computing contracts come with a mixed
bag of outsourcing, leasing, and software contracts. There could be multiple
contracts related to the software, platform, and hardware services. Secondly a
single cloud provider may not suffice all the needs of the businesses. They may
have to procure services from multiple cloud providers. If it comes to his stage,
managing the multiple cloud vendors and contracts could be an organizational
nightmare.Service Provider Reliability: It is important to ascertain how reliable
the cloud service provider’s capacity and capability is. Are they available when
you need them?
• Downtime: Downtime is a significant shortcoming of cloud technology. What
plans do the cloud service provider to resume services after a downtime? Do they
rely completely on public internet connectivity or can they offer a dedicated line
between their data center and the consumer.
• Data Security & Privacy: Data security and privacy is one of the leading
concerns in cloud computing. The major concern for the service provider is to
realize the data security and privacy of the end user. For cloud service consumer,
it is important to understand the regulations and policies around data security
and privacy.
• Vendor Lock-in: Entering a cloud computing agreement is easier than leaving
it. “Vendor lock-in” happens when switching providers is either excessively
expensive or just not possible. It could be that the service is nonstandard or that
there is no viable vendor substitute.
• Cyber Attacks: The data stored in cloud is always at risk of cyber-attack leading
to the risk of losing critical data. It is important to assess the service provider’s
security measures against these harmful attacks.
• Service Quality: Service performance, scalability, and availability are important
factors to consider before migrating to Cloud. Therefore, the Service Level
Agreements (SLAs) need to be carefully discussed and drafted.

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CLOUD COMPUTING Public Cloud Service Provider Selection Model

13 PUBLIC CLOUD SERVICE

PROVIDER SELECTION MODEL
Once you have decided to go to Cloud, the next step is selecting the right cloud service
provider. An analytical approach and well-defined evaluation criteria would be helpful in
such scenarios. A snapshot of the criteria is provided in the table below:

• Physical security of the location/data center where

cloud service is hosted
• Application & data security
Security
• Security related to multi-tenancy
• Data encryption management
• User access management

• Performance guarantees (through SLAs)

• Availability of service
• Service reliability
• Network performance and latency
Quality of Service
• Underlying hardware performance
• Scalability of performance
• Incident response time
• Planned maintenance and upgrade downtime

• Are the SLAs SMART?

• S – Specific
Service Level • M – Measurable
Agreement (SLAs) • A – Achievable
• R – Realistic
• T – Timely

• Price – relative to in-house solution, other public cloud

service
• offerings and providers
• Price-to-performance ratios
Total Cost of
• Cost for upgrade
Ownership (TCO)
• Support costs
• Overhead costs
• Hidden costs
• Total cost

71
CLOUD COMPUTING Public Cloud Service Provider Selection Model

• Easy of deployment
• Deployment/implementation lead time and support
• Ease of technical integration and interoperability with
Technical Ease in-house solutions
• Compatibility with legacy systems
• Ease of connectivity with cloud solution
• Analytics and reporting access

• Location of data centres (in-country or outside the

Location and country)
Regulations • Local and international regulations
• Geographic redundancy

• Data centre architecture redundancy

• Backup and failover services and options
• Time to recover down services (including track record!)
Disaster Planning • Cloud architecture (disaster avoidance / preventive
perspective)
• Location of alternate data centres with duplicate
services

• Data Management
• Data Security
Data Assurance
• Ownership and use rights
• Data Conversion

• Service Definition
• Roles and Responsibilities
• Service Management
• Service Availability
• Service Continuity
Service Delivery • Disaster Recovery
• Support services
• Managed services
• Professional services
• Recovery services
• Service monitoring

72
CLOUD COMPUTING Public Cloud Service Provider Selection Model

• Indemnification
• Intellectual property
• Limitation of liability
Legal Protections • Warranties
• Sustainability (green data centres and environment
efficiency)
• Level of carbon footprint

Certifications and • Adherence to Industry best practices and standards

Standards

• Alignment with provider’s platform and preferred

technologies
• Provider’s Cloud architecture and standards
Technology & Service
• Level of re-coding or customization needed to make
Roadmap
applications cloud ready
• Migration Services
• Network architecture & connectivity

Service Dependencies • Vendor relationships

& Partnerships • Subcontractors and service dependencies

• Contracts & SLAs

• Service delivery
Contracts, • Data policies and protection
Commercials & SLAs • Business terms
• Legal Protections
• Service level agreements

• Financial health of the company

• Planned corporate changes, mergers and acquisitions,
Business Health &
or business aspirations
Company Profile
• Financial performance
• Corporate governance

73
CLOUD COMPUTING Cloud Readiness Assessment Questionnaire

14 CLOUD READINESS ASSESSMENT

QUESTIONNAIRE
Following table highlights the top questions that business and organizations must ask
themselves before embarking on a Cloud journey (especially Public Cloud).

Dimension Description

• Have you developed business justification for

implementing cloud project?
• Have you identified success factors for implementing
Business Case
cloud project?
• Have you identified the availability and business
continuity requirements for your next cloud project?

Have you leveraged virtualization fully? Data center

Data Center Virtualization virtualization creates economies by putting in-house
resources (infrastructure and people) to best use?

To be cloud-compatible, applications must share a common

method of programmatic interaction to underlying
Interoperability cloud resources and services. Have you assessed the
interoperability of your business applications with the
applications on Cloud?

How would in-house applications integrate with applications

Integration
on the cloud?

How much do your demands for computing resources change

Computin g resource usage
over the course of a year?

• Do you have a data security plan to determine the

minimum level of data security that you would accept
Data security from a cloud service provider?
• Where is your core business data located – in-house or
at Cloud location?

Application Migration Have you developed a plan for migrating applications to a

Strategy cloud?

What performance requirements have been identified for

Performance Requirements
your cloud project?

Have you assessed the risks and implications if the Cloud

Risk Management
service goes down or your data on Cloud is compromised?

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CLOUD COMPUTING Next Generation Cloud Computing

15 NEXT GENERATION
CLOUD COMPUTING
The next generation of cloud computing will be the confluence of three key cloud capabilities –
(a) ability to build and deploy quickly in Cloud environment (Platform as a Service), (b)
ability to work from anywhere and anytime using cloud solutions (Software as a Service),
and (c) availability of host of next generation Cloud services (e.g. Data as a Service).

W
ou

or
Cl

kf
ro
in

m
ly
ick

An
Qu

yw
he
oy

re
pl

Next Generation
De

a
nd

Cloud Computing
d

An
an

yti
ild

m
Bu

Choose from Hybrid of Advanced Cloud Services

Figure 34: Next Generation Cloud Computing Aspects

Major innovation will take place in the area of Cloud platform services. The next generation
cloud platform will be highly intelligent, support multiple configurations, inter-operable
across various infrastructures, provides high degree of service flexibility to consumers, and
easily integrate with enterprise environment and processes. It will provide a common platform
for building SMAC capability in an organization – Social Media, Mobility, Analytics, and
Cloud-driven services. The merger of Cloud and Internet of Things (IoT) will create next
generation of intelligent, software-driven machines that can be operated remotely with
minimum supervision and control. The software-driven concept will also extend to hardware
such as servers, storage, networking equipment. The entire infrastructure can be virtualized
and centrally controllable, or software-defined.

75
CLOUD COMPUTING Next Generation Cloud Computing

Organization (cloud service consumers) will be at an enormous advantage as it is highly likely

that any new technology or business service could be available as Cloud service. Already
concepts such as Big Data, Analytics are already available on Cloud. In August 2014, IBM
launched Watson Discovery Service to enable researchers accelerate the pace of scientific
breakthroughs by discovering previously unknown connections in Big Data. According to
IBM, “Available now as a cloud service, IBM’s Watson Discovery Advisor is designed to scale
and accelerate discoveries by research teams. It reduces the time needed to test hypotheses
and formulate conclusions that can advance their work – from months to days and days
to just hours – bringing new levels of speed and precision to research and development.”

Cloud computing is also embracing open source in a big way. OpenStack is one such
example. It is an open source Infrastructure as a Service. “OpenStack is a cloud operating
system that controls large pools of compute, storage, and networking resources throughout
a datacenter, all managed through a dashboard that gives administrators control while
empowering their users to provision resources through a web interface.” – OpenStack.
OpenStack also provides various shared services such as Identity Service, Image Service,
Telemetry Service, Orchestration Service, and Database Service.

Your Applications

APIs O P E N S TA C K
CLOUD OPERATING SYSTEM

OpenStack Dashboard

Compute Networking Storage

OpenStack Shared Services

Standard Hardware

Figure 35: OpenStack Cloud Operating System (Source: OpenStack)

Extending this same open source adoption further, Intel laid out a vision for open cloud
computing. Called Intel’s Open Cloud Vision, its three key themes are federation, automation,
and client-awareness. Federation will allow “communication, data and services move easily
within and across cloud computing infrastructure.” Automation will allow cloud services to
be “specified, located, and securely provisioned will minimum human interaction.” Client-
aware means that “cloud-based applications are able to recognize individual client device
capabilities to adapt and optimize application delivery securely, while enhancing the user’s
experience.”

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CLOUD COMPUTING Next Generation Cloud Computing

INTEL CLOUD 2015 VISION

MAKING THE CLOUD WORK FOR YOU

FEDERATED AUTOMATED
FEDERATED COMMUNICATIONS, DATA, AND AUTOMATED CLOUD COMPUTING SERVICES AND
SERVICES CAN MOVE EASILY WITHIN AND ACROSS RESOURCES CAN BE SPECIFIED, LOCATED AND
CLOUD COMPUTING INFRASTRUCTURES. SECURELY PROVISIONED WITH VERY LITTLE OR
ZERO HUMAN INTERACTION

CLIENT-AWARE
CLOUD COMPUTING SOLUTIONS ADAPT SEAMLESSLY TO END USER DEVICES REGARDLESS OF
THE TYPE OF CLIENT SYSTEM THEY ARE USING.

Figure 36: Intel Cloud 2015 Vision (Source: Intel)

InterCloud – a concept briefly introduced in the first chapter – will become increasingly
popular. We will see bundling of different cloud services provided by different cloud provides
into one to manage cloud resource better.

Finally, next generation cloud computing will bring in enormous amount of benefits to
end users. End users will increasingly use more personal cloud services such as putting
personal data in the cloud. Organizations will realize that employees no longer maintain
personal folders in their office workstations; employees just put everything in cloud (e.g.
Google drive, Apple iCloud) by leveraging BYOD (Bring Your Own Device) policies that
corporates extend. Therefore, employers will be compelled to explore ways to incorporate
personal cloud services in the enterprise environment.

According to Herb Van Hook, Deputy Chief Technology Officer (CTO) for BMC Software,
the next generation cloud computing “…will deliver value to the business faster by automating
everything from request to deployment and configuration – and do so up and down the stack
and across the entire infrastructure.” The key drivers of next generation cloud computing
will be Business Value, Efficiency, Scalability, Security, and Self-Service.

77
 TOP QUESTIONS TO ASK YOURSELF BEFORE
CLOUD COMPUTING ADOPTING CLOUD COMPUTING

16 TOP QUESTIONS TO ASK

YOURSELF BEFORE ADOPTING
CLOUD COMPUTING
1. What are the business goals we are trying to achieve through Cloud computing?
2. Do we have a clearly defined and approved business case for cloud computing?
3. Which cloud model (Private, Public, and Hybrid) is fit for our environment?
4. Which cloud solution (SaaS, PaaS, and IaaS) will address our business needs?
5. Have we clearly assessed the financial and non-financial cost of the cloud solution?
6. Do we have a clear cloud strategy and roadmap?
7. What are the business problems we seek to address through the cloud solution?
8. Which business process/functionality do we plan to roll out to cloud?
9. Have we clearly articulated the economic benefits we are going to achieve
through the cloud solution?
10. Have we assessed the various risks (security, technical, regulatory, etc.) that the
cloud solution may impart?
11. Have we done proper due-diligence to validate that the cloud solution will pose
no integration and deployment challenges?
12. Has the cloud vendor addressed our information security risks?
13. Have we assessed the impact of any impacted risks? E.g. impact of data loss?
14. Are we convinced that our data is safe in the vendor’s cloud environment?
15. Have the cloud vendor ably demonstrated the disaster recovery and backup plan?
16. Has the cloud vendor demonstrated enough credibility and trust in its
capabilities? Are we comfortable doing business with them?
17. What are our SLA requirements?
18. What is our Quality of Service (QoS) requirements?
19. What business impact would it have if the cloud solution does not meet the
Ser vice Level Agreements (SLA)?
20. What are the tangible and intangible business impacts of the solution not
achieving the minimum SLA?
21. Do we understand the contractual terms and obligations?
22. Have we understood the pricing plan, and terms & conditions? What
immediate set-up/implementation cost do we incur?
23. What is the Return on Investment (ROI) over a 3–5-year term?
24. How will the cloud solution impact our Total Cost of Ownership (TCO)?
25. Have we check cloud vendor’s references and similar deployments?
26. What level of support will the cloud vendor provide?

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CLOUD COMPUTING Top Questions to Ask Your Cloud Service Provider

17 TOP QUESTIONS TO ASK YOUR

CLOUD SERVICE PROVIDER
1. Have you understood our Cloud strategy and the business goals we seek to
achieve through Cloud?
2. How will your solution/service address our business problem?
3. How will your Cloud solution/service meet our needs – both functionally and
financially?
4. How does your solution/service differentiate from your competitors?
5. Why should we adopt your solution/service?
6. Can you demonstrate successfully implementation at organizations/situation
like ours?
7. Do you have a trial period where we validate whether your solution can
integrate with our environment?
8. What contractual flexibility do you provide?
9. Are the service level agreements (SLA) amendable to changing business needs?
If so, how frequently?
10. What price protection do you provide?
11. What Quality of Performance (QoS) parameters does your solution/service
consistently meet?
12. How transparent are you in sharing SLA performance feedback on a regular basis?
13. Can we tie the pricing to the SLA performance objectives?
14. What efficiency and pricing gains can we achieve through your multi-tenancy
model?
15. Where are your data centers located? In which data center will our solution and
data reside?
16. Do you have a Disaster Recovery Plan? What are your Recovery Point
Objective (RPO) and Recovery Time Objective (RTO)?
17. How frequently do you test your DR plan?
18. How will your cloud solution/service meet the operational, security, and
compliance risks?
19. How do you plan to meet the stringent general and industry-specific security
and compliance standards security requirements?
20. Are you aware of the different regulatory requirements that we both need to
comply with? How do you plan to comply with them?
21. What are your policies to safeguard and protect our data?
22. What flexibility does your solution provide to configure to our needs?
23. Does your solution provide the integration capabilities that our business needs?

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CLOUD COMPUTING Top Questions to Ask Your Cloud Service Provider

24. What is the division of responsibilities between you and our organization once
the solution/service is successfully deployed?
25. What level of Cloud management control do you provide to your consumers?
Can we have a self-service tool/mechanism to manage the elasticity of our
demands?
26. What level of support do you provide? What is the escalation matrix?

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18 TOP THREE CLOUD

SERVICE PROVIDERS
It would be worthwhile to conclude this eBook by covering briefly about the top three
global cloud service providers. Between Amazon Web Services (AWS), Microsoft Azure, and
Google Cloud, they cover more than 50% of the worldwide market share (as of 2019).
Having established itself as an early leader in the market for cloud infrastructure, Amazon
Web Services (AWS), the online retailer’s profitable cloud platform, is still ahead of the
pack. According to estimates from Synergy Research Group, Amazon’s market share in the
worldwide cloud infrastructure market amounted to 33 percent in the fourth quarter of
2019, more than the combined market share of its three largest competitors.

Figure 37: Worldwide market share of leading cloud infrastructure service providers in Q4 2019

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CLOUD COMPUTING Top Three Cloud Service Providers

CHALLENGERS LEADERS

Amazon Web Services

Microsoft

Google

Alibaba Cloud
Oracle
ABILITY TO EXECUTE

IBM

NICHE PLAYERS VISIONARIES

COMPLETENESS OF VISION As of July 2019

Figure 38: Gartner Magic Quadrant for Cloud Infrastructure as a Service, Worldwide

Let us see briefly the unique selling proposition of each of these three players, and what
differentiation they bring to the market.

Amazon Web Services (AWS)

Amazon Web Services (AWS) is a subsidiary of Amazon that provides on-demand cloud
computing platforms and APIs to individuals, companies, and governments, on a metered
pay-as-you-go basis. In aggregate, these cloud computing web services provide a set of
primitive abstract technical infrastructure and distributed computing building blocks and
tools. One of these services is Amazon Elastic Compute Cloud, which allows users to have

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at their disposal a virtual cluster of computers, available all the time, through the Internet.
AWS’s version of virtual computers emulate most of the attributes of a real computer,
including hardware central processing units (CPUs) and graphics processing units (GPUs)
for processing; local/RAM memory; hard-disk/SSD storage; a choice of operating systems;
networking; and pre-loaded application software such as web servers, databases, and customer
relationship management (CRM).

In 2006, Amazon Web Services (AWS) began offering IT infrastructure services to businesses
in the form of web services -- now commonly known as cloud computing. One of the key
benefits of cloud computing is the opportunity to replace up-front capital infrastructure
expenses with low variable costs that scale with your business. With the Cloud, businesses
no longer need to plan for and procure servers and other IT infrastructure weeks or months
in advance. Instead, they can instantly spin up hundreds or thousands of servers in minutes
and deliver results faster.

The AWS technology is implemented at server farms throughout the world and maintained
by the Amazon subsidiary. Fees are based on a combination of usage (known as a „Pay-as-
you-go“ model), the hardware/OS/software/networking features chosen by the subscriber,
required availability, redundancy, security, and service options. Subscribers can pay for a
single virtual AWS computer, a dedicated physical computer, or clusters of either. As part
of the subscription agreement, Amazon provides security for subscribers’ systems. AWS
operates from many global geographical regions including 6 in North America.

In 2020, AWS comprised more than 212 services including computing, storage, networking,
database, analytics, application services, deployment, management, mobile, developer tools,
and tools for the Internet of Things. The most popular include Amazon Elastic Compute
Cloud (EC2) and Amazon Simple Storage Service (Amazon S3). Most services are not
exposed directly to end users, but instead offer functionality through APIs for developers
to use in their applications. Amazon Web Services’ offerings are accessed over HTTP, using
the REST architectural style and SOAP protocol for older APIs and exclusively JSON for
newer ones.

Amazon markets AWS to subscribers as a way of obtaining large scale computing capacity
more quickly and cheaply than building an actual physical server farm. All services are
billed based on usage, but each service measures usage in varying ways. As of 2017, AWS
owns a dominant 34% of all cloud (IaaS, PaaS) while the next three competitors Microsoft,
Google, and IBM have 11%, 8%, 6% respectively according to Synergy Group.

As of 2019, AWS has distinct operations in 22 geographical „regions“: 7 in North America,

1 in South America, 5 in Europe, 1 In Middle-East and 8 in Asia Pacific.

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CLOUD COMPUTING Top Three Cloud Service Providers

AWS has announced 5 new regions that will be coming online in Italy, South Africa, Spain,
Osaka and Indonesia.

Each region is wholly contained within a single country and all its data and services stay
within the designated region. Each region has multiple „Availability Zones“, which consist of
one or more discrete data centers, each with redundant power, networking and connectivity,
housed in separate facilities. Availability Zones do not automatically provide additional
scalability or redundancy within a region, since they are intentionally isolated from each
other to prevent outages from spreading between Zones. Several services can operate across
Availability Zones (e.g., S3, DynamoDB) while others can be configured to replicate across
Zones to spread demand and avoid downtime from failures.

Today, Amazon Web Services provides a highly reliable, scalable, low-cost infrastructure
platform in the cloud that powers hundreds of thousands of businesses in 190 countries
around the world. With data center locations in the U.S., Europe, Brazil, Singapore, Japan,
and Australia, customers across all industries are taking advantage of the following benefits:

Low Cost
AWS offers low, pay-as-you-go pricing with no up-front expenses or long-term commitments.
AWS can build and manage a global infrastructure at scale and pass the cost saving benefits
onto you in the form of lower prices. With the efficiencies of scale and expertise, AWS has
been able to lower its prices on 15 different occasions over the past four years.

Agility and Instant Elasticity

AWS provides a massive global cloud infrastructure that allows you to quickly innovate,
experiment and iterate. Instead of waiting weeks or months for hardware, you can instantly
deploy new applications, instantly scale up as your workload grows, and instantly scale down
based on demand. Whether you need one virtual server or thousands, whether you need
them for a few hours or 24/7, you still only pay for what you use.

Open and Flexible

AWS is a language and operating system agnostic platform. You choose the development
platform or programming model that makes the most sense for your business. You can
choose which services you use, one or several, and choose how you use them. This flexibility
allows you to focus on innovation, not infrastructure.

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CLOUD COMPUTING Top Three Cloud Service Providers

Secure
AWS is a secure, durable technology platform with industry-recognized certifications and
audits: PCI DSS Level 1, ISO 27001, FISMA Moderate, FedRAMP, HIPAA, and SOC 1
(formerly referred to as SAS 70 and/or SSAE 16) and SOC 2 audit reports. Our services
and data centers have multiple layers of operational and physical security to ensure the
integrity and safety of your data.

Solutions
The AWS cloud computing platform provides the flexibility to launch your application
regardless of your use case or industry. Learn more about popular solutions customers are
running on AWS:

Application Hosting
Use reliable, on-demand infrastructure to power your applications, from hosted internal
applications to SaaS offerings.

Websites
Satisfy your dynamic web hosting needs with AWS’s scalable infrastructure platform.

Backup and Storage

Store data and build dependable backup solutions using AWS’s inexpensive data storage
services.

Enterprise IT
Host internal- or external-facing IT applications in AWS’s secure environment.

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CLOUD COMPUTING Top Three Cloud Service Providers

Content Delivery
Quickly and easily distribute content to end users worldwide, with low costs and high data
transfer speeds.

Databases
Take advantage of a variety of scalable database solutions, from hosted enterprise database
software or non-relational database solutions.

Microsoft Azure
Microsoft Azure (formerly Windows Azure) is a cloud computing service created by Microsoft
for building, testing, deploying, and managing applications and services through Microsoft-
managed data centers. It provides software as a service (SaaS), platform as a service (PaaS)
and infrastructure as a service (IaaS) and supports many different programming languages,
tools, and frameworks, including both Microsoft-specific and third-party software and systems.

Azure was announced in October 2008, started with codename „Project Red Dog“, and
released on February 1, 2010, as „Windows Azure“ before being renamed „Microsoft Azure“
on March 25, 2014.

Microsoft Azure lists over 600 Azure services, of which some are covered below:

• Computer services
• Mobile services
• Storage services
• Data management
• Messaging
• Media services
• CDN
• Developer
• Management
• Machine learning
• Azure Blockchain Workbench
• Functions
• Internet of Things (IoT)

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CLOUD COMPUTING Top Three Cloud Service Providers

Azure is generally available in 54 regions around the world. Microsoft has announced an
additional 12 regions to be opened soon (as of October 2018). Microsoft is the first hyper-
scale cloud provider that has committed to building facilities on the continent of Africa
with two regions located in South Africa. An Azure geography contains multiple Azure
Regions, such as for example “North Europe” (Dublin, Ireland), “West Europe” (Amsterdam,
Netherlands, where a location represents the city or area of the Azure Region. Each Azure
Region is paired with another region within the same geography; this makes them a regional
pair. In this example, Amsterdam and Dublin are the locations which form the regional-pair.

Microsoft Azure uses a specialized operating system, called Microsoft Azure, to run its
„fabric layer“: A cluster hosted at Microsoft’s data centers that manage computing and
storage resources of the computers and provisions the resources (or a subset of them) to
applications running on top of Microsoft Azure. Microsoft Azure has been described as a
„cloud layer“ on top of several Windows Server systems, which use Windows Server 2008
and a customized version of Hyper-V, known as the Microsoft Azure Hypervisor to provide
virtualization of services.

Scaling and reliability are controlled by the Microsoft Azure Fabric Controller, which
ensures the services and environment do not fail if one or more of the servers fails within
the Microsoft data center, and which also provides the management of the user’s Web
application such as memory allocation and load balancing.

Azure provides an API built on REST, HTTP, and XML that allows a developer to interact
with the services provided by Microsoft Azure. Microsoft also provides a client-side managed
class library that encapsulates the functions of interacting with the services. It also integrates
with Microsoft Visual Studio, Git, and Eclipse.

In addition to interacting with services via API, users can manage Azure services using the
Web-based Azure Portal, which reached General Availability in December 2015.[46] The
portal allows users to browse active resources, modify settings, launch new resources, and
view basic monitoring data from active virtual machines and services.

Microsoft Azure offers two deployment models for cloud resources: the „classic“ deployment
model and the Azure Resource Manager. In the classic model, each Azure resource (virtual
machine, SQL database, etc.) was managed individually. The Azure Resource Manager,
introduced in 2014, enables users to create groups of related services so that closely coupled
resources can be deployed, managed, and monitored together.

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CLOUD COMPUTING Top Three Cloud Service Providers

Google Cloud Platform

Google Cloud Platform (GCP), offered by Google, is a suite of cloud computing services
that runs on the same infrastructure that Google uses internally for its end-user products,
such as Google Search, Gmail and YouTube. Alongside a set of management tools, it provides
a series of modular cloud services including computing, data storage, data analytics and
machine learning.

Google Cloud Platform provides infrastructure as a service, platform as a service, and

serverless computing environments.

In April 2008, Google announced App Engine, a platform for developing and hosting web
applications in Google-managed data centers, which was the first cloud computing service
from the company. The service became generally available in November 2011. Since the
announcement of the App Engine, Google added multiple cloud services to the platform.

Google Cloud Platform is a part of Google Cloud, which includes the Google Cloud
Platform public cloud infrastructure, as well as G Suite, enterprise versions of Android
and Chrome OS, and application programming interfaces (APIs) for machine learning and
enterprise mapping services.

Google lists over 90 products under the Google Cloud brand. Some of the key services are
listed below.

• Compute
• Storage & Databases
• Networking
• Big Data
• Cloud AI
• Management Tools
• Identity & Security
• IoT
• API Platform

As of Q1 2020, Google Cloud Platform is available in 22 regions and 61 zones. A region

is a specific geographical location where users can deploy cloud resources. Each region is
an independent geographic area that consists of zones. A zone is a deployment area for
Google Cloud Platform resources within a region. Zones should be considered a single
failure domain within a region. Most of the regions have three or more zones.

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CLOUD COMPUTING Top Three Cloud Service Providers

Comparison of COMPUTE Services: AWS vs AZURE vs GCP

Amazon Web Google Cloud

Service Microsoft Azure
Services Platform

Virtual Machines;
Elastic Compute
Compute Services Compute Engine Virtual Machine
Cloud (EC2)
Scale Sets

App Engine Standard

Environment; App
PaaS Elastic Beanstalk Cloud Services
Engine Flexible
Environment

Virtual Machine
VPS Lightsail
Images

Docker/ EC2 Container Container Service;

Kubernetes Engine;
Kubernetes Service; Kubernetes Container Service
Container Engine
containers (EKS) (AKS)

Integrate systems
Cloud Functions Functions; Event
and run backend Lambda
(Beta) Grid
logic processes

Virtual Machine
Automatically
Auto Scaling Instance Groups Scale Sets; Auto
scale instances
Scaling

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CLOUD COMPUTING Top Three Cloud Service Providers

Comparison of STORAGE Services: AWS vs AZURE vs GCP

Vendor Storage Services Database Services Backup Services

AWS Simple Storage Service (S3) Aurora Glacier

Elastic Block Storage (EBS) Amazon Relational

Database Service
(RDS)

Elastic File System (EFS) DynamoDB

Storage Gateway ElastiCache

Snowball Redshift

Snowball Edge Neptune

Snowmobile Database Migration

Service

Azure Blob Storage SQL Database Archive Storage

Queue Storage Database for MySQL Backup

File Storage Database for PostgreSQL Site Recovery

Disk Storage Data Warehouse

Data Lake Store Server Stretch Database

Cosmos DB

Table Storage

Redis Cache

Data Factory

GCP Cloud Storage Cloud SQL None

Persistent Disk Cloud Bigtable

Transfer Appliance Cloud Spanner

Transfer Service Cloud Datastore

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CLOUD COMPUTING Top Three Cloud Service Providers

Comparison of DATABASE Services: AWS vs AZURE vs GCP

Service AWS GCP Azure

Managed relational Relational CloudSQL, SQL Database; Database

database as- Database Service Cloud Spanner for MySQL, Database for
a-service (RDS) PostgreSQL

NoSQL (indexed) Cloud Datastore;

DynamoDB Cosmos DB
Cloud Bigtable

NoSQL (key-value) DynamoDB, Cloud Datastore Table Storage

SimpleDB

Application or
ElastiCache MemCache Redis Cache
Memory Caching

Database Migration Database Database Migration

Migration Service Service

Managed Data
Redshift Big Query SQL Data Warehouse
Warehouse

Comparison of NETWORKING Services: AWS vs AZURE vs GCP

Service AWS GCP Azure

Isolated, private cloud Virtual Private

Virtual Private Cloud Virtual Network
private networking Cloud (VPC)

Cross-premises
API Gateway Cloud VPN VPN Gateway
connectivity

Managed DNS Azure DNS, Traffic

Route 53 Google Cloud DNS
names and records Manager

Global content Cloud Interconnect; Content Delivery

delivery networks CloudFront Cloud CDN Network

Dedicated, private
Direct Connect Cloud Interconnect ExpressRoute
network connection

Load balancing Elastic Load Cloud Load Load Balancer,

configuration Balancing Balancing Application Gateway

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CLOUD COMPUTING Top Three Cloud Service Providers

Comparison of MANAGEMENT Services: AWS vs AZURE vs GCP

Service AWS GCP Azure

Cloud Platform
Cloud Advisor Trusted Advisor Advisor
Security

OpsWorks Automation,
DevOps Cloud Deployment
(Chef based); Resource Manager,
Deployment Manager
CloudFormation VM Extensions

Stackdriver
CloudWatch, X-Ray, Monitoring, Cloud
Management & Portal, Monitor,
Management Shell, Debugger,
Monitoring Application Insights
Console Trace, Error
Reporting

Application Log Analytics,

Discovery Service, Operations
Administration Systems Manager, Cloud Console Management Suite,
Personal Health Resource Health,
Dashboard Storage Explorer

Billing Billing API Cloud Billing API Billing API

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CLOUD COMPUTING Top Three Cloud Service Providers

Comparison of SECURITY Services: AWS vs AZURE vs GCP

Service AWS GCP Azure

Authentication & Identity and Access Cloud IAM, Cloud Active Directory,
Authorization Management (IAM), Identityaware Proxy Active Directory
Organizations Premium

Protect and
Key Management Storage Service
Safeguard with
Service (KMS) Encryption
Encryption

Hardware-based Cloud Key,

CloudHSM Key Vault
Security Modules Management Service

Web Application
Firewall Application Gateway
Firewall

Directory Services AWS Directory Active Directory

Service Domain Services

Identity
Cognito Active Directory B2C
Management

Cloud Services DDoS Protection

Shield
with Protection Service

Pricing Models: AWS vs AZURE vs GCP

Service Pricing Pricing Models

AWS Per Hour rounded up On Demand, Reserved, Spot

GCP Per Minute – rounded up (minimum On Demand – Sustained Use

10 minutes)

Azure Per Minute – rounded up On Demand – Short term

commitments (pre-paid or monthly) commitments (pre-paid or monthly)

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CLOUD COMPUTING Top Three Cloud Service Providers

Key Benefits of AWS, AZURE & GCP

S. No. AWS Azure GCP

1. Dominates cloud domain More reliable when

with features such as comes to integrating
Expertise in DevOps
configuration, monitoring, with Microsoft tools
security, auto-scaling etc.

2. Better development and Flexible discounts &

Better Offering
testing tools contracts

3. Specifically designed
More Experience, enterprise
Hybrid cloud option for cloud-based
friendly Services
businesses

4. More open source tools

integration

5. Global Reach

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CLOUD COMPUTING References

19 REFERENCES
1. Mell, Peter, Grance, Timothy. (2011). The NIST Definition of Cloud
Computing. National Institute of Standards and Technology. U.S. Department
of Commerce
2. Liu, Fang. Tong, Jin. Mao, Jian. Bohn, Robert. Messina, John. Badger, Lee.
Leaf, Dawn. (2011). NIST Cloud Computing Reference Architecture. National
Institute of Standards and Technology. U.S. Department of Commerce
3. Espadanal, Mariana, Oliveira, Tiago (2012). Cloud Computing Adoption by
Firms. Association for Information Systems. AIS Electronic Library (AISeL)
4. Velte, Antony T., Velte, Toby J., Elsenpeter, R. (2010). Cloud Computing – A
Practical Approach. McGraw Hill, pp 3–4.
5. Mell, Peter, Grance, Timothy (2011). The NIST Definition of Cloud
Computing. National Institute of Standards and Technology.
6. May Al-Roomi, Shaikha Al-Ebrahim, Sabika Buqrais and Imtiaz Ahmad (2013).
Cloud Computing Pricing Models – A Survey.
7. The Open Group Cloud: Building Return on Investment from Cloud
Computing.
8. Open Alliance for Cloud AdoptionSM Usage Model: Cloud Maturity Model
Rev. 4.0.
9. Verizon. 2013 State of the Enterprise Cloud Report.
10. Wilkes, Lawrence. Everware-CBDI. Commentary on Service Oriented
Architecture, Enterprise Architecture, Application Modernization, Cloud
Computing and Enterprise Mobility.
11. Szymanski, Aleks. (2015). Cloudtech – Frequency vs. size of cloud data
breaches: Which is worse?
12. Buchanan, Jim. (2011). CIO.com – Cloud Computing: 4 Tips for Regulatory
Compliance.
13. Winkler, Vic (J.R.). (2012). TechNet Magazine – Cloud Computing: Legal and
Regulatory Issues.
14. Burns, Paul. (2014). Neovise – Public Cloud Selection Criteria: Getting Beyond
the Basics.
15. Huang, Ryan. (2014). ZDNet – Key questions when selecting a cloud-based
provider.
16. Kajeepeta, Sreedhar. (2010). Computerworld – Multi-tenancy in the cloud:
Why it matters.
17. Bobrowski, Steve. Salesforce Developers – The Force.com Multitenant
Architecture.
18. The Open Group. (2013). Cloud Computing Portability and Interoperability.

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19. Angeles, Sara. (2014). Business News Daily – Virtualization vs. Cloud
Computing: What’s the Difference?
20. Skamser, Charles. (2010). eDiscovery Times – Building ROI for an eDiscovery
Cloud Computing Model.
21. Van Hook, Herb. (2014). Bmc.com – Get ready for your next-generation
cloud: lessons learned from first-generation private clouds
22. Banafa, Ahmed. (2014). Thoughts On Cloud – The next generation of cloud
computing.
23. Press Release, IBM (2014). IBM Watson Ushers in a New Era of Data-Driven
Discoveries.
24. Oracle White Paper 2012 – Ten Questions to Ask Your Cloud Vendor Before
Entering the Cloud
25. Dutta, Pranay. Dutta, Prashant. (2019). Comparative Study of Cloud Services
Offered by Amazon, Microsoft & Google. International Journal of Trend in
Scientific Research and Development (IJTSRD)
26. Open Alliance for Cloud Adoption (OACA-Project.org)
27. Amazon Web Services (AWS)
28. Google Cloud
29. Microsoft Azure
30. OpenStack.
31. Everware-CBDI.
32. Wikipedia.

Other Sources:

1. http://www.opengroup.org/cloud/wp_cloud_roi/index.htm
2. https://kinsta.com/blog/cloud-market-share/
3. https://www.eweek.com/cloud/at-a-high-level-aws-vs-azure-vs-google-cloud
4. https://blogs.gartner.com/marco-meinardi/2018/11/30/public-cloud-cheaper-
than-running-your-data-center/
5. https://www.cloudindustryforum.org/content/8-criteria-ensure-you-select-right-
cloud-service-provider
6. https://en.wikipedia.org/wiki/Microsoft_Azure
7. https://aws.amazon.com/about-aws/
8. https://en.wikipedia.org/wiki/Amazon_Web_Services
9. https://en.wikipedia.org/wiki/Google_Cloud_Platform
10. https://cloud.google.com/

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