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Cloud Computing

Cloud Computing. What is Cloud Computing?. Video. http :// www.youtube.com/watch?v=okqLxzWS5R4 Thoughts?. Video. http :// www.youtube.com/watch?v=BYP3uMOobqk Thoughts?. We can categorize three basic approaches to IT. Internal IT You own/manage/support dedicated servers Managed Services

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Cloud Computing

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  1. Cloud Computing

  2. What is Cloud Computing?

  3. Video • http://www.youtube.com/watch?v=okqLxzWS5R4 • Thoughts?

  4. Video • http://www.youtube.com/watch?v=BYP3uMOobqk • Thoughts?

  5. We can categorize three basic approaches to IT. Internal IT • You own/manage/support dedicated servers Managed Services • Pay somebody else to own/manage/support dedicated servers Cloud • Pay for access to computing and you create/use/terminate servers dynamically

  6. How much does it cost to get started? • Internal: • Managed Services: • Cloud:

  7. How much does it cost to get started? • Internal: Your paying for the infrastructure before you use it • Managed Services: A moderate fee charged to get things up and configured. • Cloud: Perhaps a small “welcome” fee.

  8. How much does it cost to run day to day? • Internal: • Managed Services: • Cloud:

  9. How much does it cost to run day to day? • Internal: Staff + equipment + utilities + facilities + … • Managed Services: This is what you are paying for • Cloud: Depends on the daily usage

  10. How much time is required to add new components? • Internal: • Managed Services: • Cloud:

  11. How much time is required to add new components? • Internal: Must procure, set-up, test, deploy. • Managed Services: Buy in bulk and are ready to deploy. • Cloud: Virtualization means components created/configured in minutes.

  12. How effectively can the infrastructure adapt to peak demands? • Internal: • Managed Services: • Cloud:

  13. How effectively can the infrastructure adapt to peak demands? • Internal: It’s fixed and adding new equipment is both expensive in cost and time. • Managed Services: Can offer temporary assistance which comes at a moderate price • Cloud: Uses virtualization and can automatically expand as needed.

  14. The required in-house expertise to keep the infrastructure tuned appropriately. • Internal: • Managed Services: • Cloud:

  15. The required in-house expertise to keep the infrastructure tuned appropriately. • Internal: Requires staff to know it all and more • Managed Services: Pure contract • Cloud: Depends on the use - generally is less than Internal, more than Managed Services

  16. How likely is it that your services will be up 24/7/365? • Internal: • Managed Services: • Cloud:

  17. How likely is it that your services will be up 24/7/365? • Internal: depends on staff expertise and cash investment into hardware/software • Managed Services: This is the point. • Cloud: It’s generally good but the jury is still out

  18. Other factors need to be considered. • Regulatory concerns • IP concerns • Significant sunk costs • Significant performance requirements • Anticipated growth

  19. Financial Cast Study:Should we develop in-house or move to a cloud? • Most days : 4 servers needed • One day a month: • 9 servers needed to maintain performance • Go with 6 and accept degradation • Internal: • Rack, firewalls, load balancer, switches

  20. Internal start-up costs Servers : $36000 ($6000 each) Rack : $3000 Switches : $3000 ($1000 each) Load balancer : $30000 Firewalls : $3000 ($1500 each) Labor : $15000 (4 employees for 1 month @ $45K/year) Total : $77,400

  21. Cloud start-up costs: Servers : $0 Rack : $0 Switches : $0 Load balancer : $0 Firewalls : $0 Labor : $1250 (1 employee for 10 days @ $45K/year) Total : $1,250

  22. Internal monthly recurring costs: Rack : $500 Mgmt Software : $150 Labor : $7500 (2 employees @ $45K/year) Degradation : $150 Total : $8300

  23. Cloud monthly recurring costs: Load balancer : $73 ($0.10/hr for month) Servers : $3040 ($1/hr/machine for month) 24/7 support : $2000 Mgmt Software : $730 ($1/hr for month) Labor : $3750 (1 employee @ 45000/year) Total : $9593

  24. Choose the option to run for five years. Internal • Initial : $77400 • Monthly : $8300 Cloud • Initial : $1250 • Monthly : $9593 Need any other information? Discount rate is 10%.

  25. Over five years… Internal : ~$447,930 Cloud : ~$437,520 That’s NPV. Without the discount rate, the raw totals are Internal : ~$575,400 Cloud : ~$576,800

  26. Resources - Books

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