Cloud Computing

Introduction By

Endeavors to optimize efficiency of IT organization has come a long way in the last few
decades. From ‘initial arena of Mainframes and its time sharing model’ to ‘the PCs with
volumes of comparatively less expensive computing servers’ to ‘Application Service
Prasanna
Provider (ASP) reducing the operational cost’ to ‘service-focused models of SaaS and Pachwadkar
SOA providing reusability, economies of scale’. The latest trend in this evolution is Business Analysis and
‘Cloud Computing’, promising to revolutionalize the world of computing. Gartner Incubation Cell
recently commented, “Worldwide software spending is on pace for the strongest growth
rate in 2008 at more than 10. However, the replacement of systems does not prasanna.pachwadkar@patni.com
automatically equate to new software market growth. SaaS/Cloud Computing,
SOA/Web 2.0, and open source software are causing huge changes to the software
market. Many of these factors are impacting market growth as enterprises replace
assets with per-use services." Sunil Joglekar
Product and Technology
This article attempts to understand the substance behind this hype with a discussion on Initiatives
what is Cloud Computing, players in this space, and probable ways this new trend
could take shape. sunil.joglekar@patni.com

Origin of the term

The term ‘cloud’ is not at all new to the computing community. For many years, ‘cloud’
is being used as a symbol in typical network diagrams to refer to the internet or the
components of the network which are managed outside the environment of any IT
organization.

Even though Cloud Computing has started taking shape in very recent years; few
people like John McCarthy, the revolutionary computer scientist had envisioned this
future while commenting that "computation may someday be organized as a public
utility".

What it is?
Wikipedia defines the term as “a style of computing where IT-related capabilities are
provided “as a service”, allowing users to access technology-enabled services "in the
cloud" without knowledge of, expertise with, or control over the technology
infrastructure that supports them.”

As per Forrester, Cloud Computing is “a pool of highly scalable, abstracted

infrastructure, capable of hosting end-customer applications, that is billed by
consumption.”

Gartner defines Cloud Computing as "a style of computing where massively scalable
IT-enabled capabilities are delivered 'as a service' to external customers using Internet
technologies."
Cloud Computing

So, in essence, Cloud Computing should be capable of providing the end-user,

services for each component of end-to-end application lifecycle,
• Available over the internet,
• Using pay-as-you-go payment model,
• Highly flexible for user-specific requirements,
• Highly scalable to adjust rise or fall in user’s demand of resources,
• Without having any huge IT infrastructure

Evolution of Cloud Computing

More than two decades ago ‘Sun’ envisaged ‘the network is the computer’. But, it was
not until recent post-dotcom burst period that this vision started taking shape.

Innovate to Survive
The companies like Google, Hotmail and Yahoo sustained through the dotcom burst.
They began innovating further to attract more number of users. Cloud Computing has
its roots in the strategies adopted by these internet giants.

Most of these internet companies would face unpredictable demand due to the very
nature of their operations. Also, these companies would need to respond to strong
fluctuations in the demand due to factors such as seasonality. These vendors needed
to ensure optimum response time even at the highest hit-rate. To achieve this, these
vendors went on expanding their infrastructural capacity. But, this expansion would
obviously be constrained by capital availability and would need to optimize utilization of
the infrastructure during high and low demand periods.

Virtualization of the physical computing capacity was the answer. Through

virtualization, it was feasible to effectively manage the fluctuations in demand while
keeping the capital expenditure in control.

Generalize to Proliferate
In the Internet era, it is taking much lesser time for the generalization of an innovation.
In early days of computing evolution, technology companies such as IBM used to
provide newer technologies, secure its intellectual property rights and sell it at a
premium. On the contrary, many of the innovative technology approaches in the recent
times have come from the business enterprises such as Google and Amazon who have
innovated technologies for their business use. And as soon as they would be
successful, they would bundle it and would make it available to the other users at an
affordable price.

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Once these internet evangelists were successful in managing a flexible, scalable and
optimized infrastructure for their own businesses, they started looking at other ways to
further optimize the resources. ‘Services’ was already the buzzword in the IT industry.
Taking the hint, these companies started carving out reusable and generic components
of their application infrastructure and began offering those as services in the ‘cloud’ i.e.
over the internet.

Amazon AWS could be seen as one prominent example of this evolution as well as
leader of today’s Cloud Computing market place.

Categories of Cloud Computing Services

Cloud Computing services are continuously evolving and so are the categories. As it
stands today, Cloud Computing services could be grouped in following broad
categories.

Cloud Application Provisioning Services

Vendors in this category, typically known as SaaS (Software-as-a-Service) vendors,
mostly focus on provisioning niche business applications. Client Relationship
Management (Salesforce), HRM (Taleo), Spend Management (Ariba) and Productivity

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Cloud Computing

(Webex) are the prominent areas where the vendors are offering solutions. Some
players have even started offering BPM (Appian) and (NetSuite, SAP) ERP in services
model.

Cloud Application Development Services

These vendors are a step ahead in terms of extent of their services as compared to the
earlier category. These vendors mostly offer a development platform allowing users to
develop their own piece of applications on these platforms. These platform service
vendors, typically called as PaaS (Platform as a Service) vendors could be allowing
hosting these platforms on their own infrastructure or through another category of
Cloud Computing vendors focused on hosting and deployment services. Many of the
players in this category have been originated from a successful SaaS product such as
Salesforce which was used to carve out underlying platform for use of the partner
community. Companies like Salesforce would allow partners to build add-on
applications integrated with their central CRM product and also hosted on their own
platform for a premium. Other players in this category are BungeeLabs, Etelos,
CogHead, Google AppEngine and Oracle SaaS Platform.

Cloud Application Deployment and Hosting Services

Vendors such as Amazon, IBM could be placed in this category. These vendors focus
on either providing infrastructure for deploying an application environment, hosting of
the application, or even just storage of data. For example, Amazon AWS provides "raw"
compute resources via EC2 and higher level services such as S3 (Storage), SQS
(Queue-based messaging), and SimpleDB (stores datasets, execute queries). User can
configure the raw compute resources (EC2) as per requirements, using the OS of
choice and write applications in any language and framework. Those applications may
or may not rely upon additional AWS services such as S3, SQS, and SimpleDB.

IBM Blue Cloud somewhat different strategy in terms of Cloud computing services. It
focuses on Cloud Computing within firewalls of an enterprise. IBM Blue Cloud could
link together enterprise computers to allow corporate data centers to operate more like
the Internet or cloud. So, large enterprises could get Cloud Computing services using
this internal cloud. Other vendors in this category are Joyent, GoGrid, and SunGrid.

Some vendors such as OpSource, JamCracker and RackSpace focus only on hosting
services whereas another subcategory of vendors focuses only on deployment
services. These vendors specializes in packaging and virtualization format solutions for
provisioning applications into a cloud (RPath, VMWare) or provide solutions focused on
the coordination of many virtual appliances (app, DB, network) in the cloud to form a
full deployment (3Tera AppLogic).

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Cloud Application Management Services

Vendors in this category are niche vendors providing specialized services for the ISVs
in Cloud Computing services market. These services cover solutions that provide
metering, billing, pricing, and contract management (Aria, Amazon DevPay, Zuora) to
help charge for use of a system. Another set of vendors are also catering to the identity
management and security related requirements (Ping Identity) of Cloud Computing
vendors.

Essential characteristics of Cloud

Computing
Cloud Computing service vendors need to be:

Agile in Response to Optimize of its Massive Infrastructure

Cloud Computing services need to be available on-demand. The fluctuations in the
demand are difficult to predict. Hence, Cloud Computing services need to be agile to
respond this unpredictable demand using various virtualization and hardware load
balancing technologies.

Generic in Configuration to Address Broader Set of User

Requirements
The technical requirements from different users could vary significantly in terms of OS,
language, environment, database, and storage size. Cloud Computing service vendor
would need to configure the off-the-shelves resources such that they could be readily
used for almost any kind of project requirements. Vendors such as Amazon AWS and
IBM are significantly progressing in this direction whereas companies such as Google
with its Google AppEngine seem to be restricting users to use Python and BigTable, at
least as of present. These restricted configurations may not fit requirements of some of
the users. Also, if vendors allow only proprietary languages, it may be perceived as a
lock-in strategy and may discourage users.

Standard in Offerings to Achieve Economies of Scale

Cloud Computing services would also need to build standardized set of computing
resources so as to achieve economies of scale by reducing number of variants in the
offerings. It would also enable users to estimate their requirements from time to time
and only subscribe to the right amount of computing capacity.

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Cloud Computing Adoption

Cloud Computing services promise to provide reliable, scalable and economical
computing capacity on demand.

Today, an ISV could build a business application for ‘provisioning in the cloud’ using
the BungeeLabs ‘application development services in the cloud’ with underlying
‘application deployment and hosting services in the cloud’ from Amazon AWS.

Apart from smaller ISVs, IT departments of enterprises could very well use Cloud
Computing services. Unlike the traditional licensed, in-house IT, for Cloud Computing
services, IT departments do not need to invest heavily in new IT infrastructure just for a
pilot project. Also, some projects would experience temporary surges in need of
computing capacity where purchasing additional IT infrastructure would not prove
economical. Fetching Cloud Computing services as and when required could be much
cost-effective and timely solution.

New York Times Co. and the Nasdaq stock exchange are prominent examples of
successful fulfillment of these promises. These organizations have adopted Amazon
AWS Cloud Computing services for business critical areas.

CASE STUDY: THE NEW YORK TIMES

Nature of Project:
Temporary but data-intensive project
Objective:
To convert 11 million articles published
from the newspaper's founding in 1851
through 1989, to make them available
through its Web site search engine
Infrastructure Requirements:
Data storage and data conversion
required massive 4TB space and huge
computing capacity.
Approach:
ƒ Huge investments in the infrastructure were not justifiable.
ƒ Decided to use Amazon AWS services.
ƒ Scanned in the stories, then uploaded those to S3, taking 4TB of
space
ƒ Using Amazon.com's EC2 computing platform, a PDF conversion
application was run that converted that 4TB of TIFF data into 1.5TB of
PDF files.
ƒ Using 100 Linux computers, the job took about 24 hours, costing
around $240.
ƒ Using existing infrastructure at the company, it would have taken a
month.
ƒ No prior coordination with Amazon: IT department just signed up for
the service on the Web using a credit card then began uploading the
data.

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CASE STUDY: NASDAQ

Nature of Project:
A continuous computing requirement with
highly unpredictable load
Objective:
To offer the exchange's customers the ability
to look back at historical trading data and
dissect the information millisecond by
millisecond.
Infrastructure Requirements:
The project would be generating 100,000 flat
files per day along with several million flat
files of the initial data. Huge storage and
computing capacity was required to host the
massive data on the internet and to provide
effective service at the peak load
Approach:
ƒ Heavy upfront investments in the infrastructure were not
justifiable.
ƒ Decided to use Amazon AWS services.
ƒ Using Amazon's S3 service to host the data
ƒ Also created a lightweight reader application using Adobe's AIR
technology so as to enable users to extract the required data.
ƒ Using existing data created flat files for every entity, each
holding enough data for a 10-minute replay of the stock's or
fund's price changes, on a second-by-second basis.
ƒ The Adobe AIR application pulls in the flat files stored at
Amazon.com and then creates the replay animations from them.
ƒ Hence, not necessary to constantly staging data on the server
side.
ƒ Need to worry about the surge in demand in the future as
additional Cloud Computing resources could be obtained from
Amazon as and when required.

Along with these major enterprises, even small ISVs and innovators are also making
effective use of Cloud Computing services for launching their business/ consumer
applications. In fact, these applications could not have been feasible to launch and
successfully run if it was not for Cloud Computing services.

CASE STUDY: RENKOO

Approach:
Nature of Project:
A continuous computing requirement with highly ƒ Significant upfront investment was not
unpredictable load justifiable for this small company.
ƒ Decided to use Amazon AWS services.

Objective: ƒ Using Amazon's EC2 service to support a

To offer innovative solutions such as Haikoo Zoo and Booze million or so Facebook users.
Main to the Facebook community of millions of technology- ƒ Proved to be economical - average $100/ day
savvy users for these computing services
ƒ Instant scalability makes the approach
Infrastructure Requirements: successful
Heavy computing capacity was required to provide effective
service at the peak load.

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Potential Business Benefits

Based on the examples seen so far, the primary benefits of Cloud Computing can be
expressed in just a single phrase –

Making things economical in terms of time, resources and money!

Turnaround
Time Rapid SDLC
time
Business
Resources Scalability Utilization Agility

Money CapEx OpEx

User organizations could achieve agility in responding to external as well as internal

environmental changes through following benefits of Cloud Computing services.

Rapid SDLC (Software Development Life Cycle)

Cloud Computing service providers could provide ready to use infrastructural
resources, development environments as well as reusable application components. In
contrast, in traditional development cycle, each organization needs to design and build
these pieces from scratch which accounts for significant portion of SDLC. Using Cloud
Computing services, user organizations could target to reduce this cycle time.

Quick Turnaround
User organizations could design architecture of their IT systems in such a way that they
could run processing on parallel computing resources Cloud Computing service
providers. Rapid provisioning and de-provisioning of Cloud Computing resources thus
assures increase in productivity and reduction in turnaround time.

High Scalability (Upwards as well as downwards)

In traditional model, the purchase of any new IT infrastructure needs to be justified in
terms of its long-run usage. Cloud Computing promises to provide highly scalable IT
resources, where scalability could be upwards as well as downwards. In many cases, it
would reduce the deployment time significantly.

Increased Utilization
Cloud Computing service providers aggregates the demand from various user
organizations so as to dynamically allocate the computing resources using

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technologies such as server virtualization. This results in to far better resource

utilization when compared with utilization of in-house IT infrastructure. This high
utilization coupled with economies of scale, could enable service providers to provide
Cloud Computing services in much economical ways.

Reduction in Cost – CapEx

In traditional software development life cycle, any new IT system has significant
budgetary constraints. These constraints could be in the form of capital expenses such
as in-house infrastructure and heavy licensing charges. The organizations need to
make these capital investments even before deploying the system in practice and start
realizing the benefits. Cloud Computing promises to relieve organizations from major
part of such capital expenses. By removing this major constraint in the initiation phase,
IT systems could be deployed much faster to realize the benefits of the same.

Reduction in Cost – OpEx

In Cloud Computing, IT infrastructure and other basic components of IT architecture
are taken care of by the service vendors. In traditional IT systems, related on-going
maintenance and enhancement activities amount to substantial operative expenses. In
Cloud Computing, the user organizations need not worry about such expenses and
would only need to pay based on the actual usage of the services. Unlike traditional
model, user organizations would not need to bear the cost of IT infrastructure even
when it is idle. They can just switch it off.

Our Take
Cloud Computing is a sun-rise area of technology. Besides, Cloud Computing includes
many pieces such as computing, storage, messaging, integration et al. The full benefits
would be realized as further progress is made. Multiple new vendors as well as existing
internet/ enterprise giants are eyeing for a strong foothold in this market. Looking at
the investments being made by leaders such as IBM, Google and Amazon, it is quite
evident that the adoption of Cloud Computing is on the rising trend. Though, the market
is very much nascent at this stage. Various vendors as well as analysts are trying to
define the shape and size of this market in multiple ways. Market-maps are getting
modified with the enhancements of the existing products/ technologies as well as new
addition of vendors. This hyped enthusiasm is creating contradictory, confusing
folksonomy. Lack of standards, issues related to data ownership and compliance would
need to be addressed with innovative approaches. It would be some time until the
Cloud Computing market gets better defined, players get well positioned and the
potential issues get appropriately addressed.

Cloud Computing is changing the way IT industry would operate. It could open up
various possibilities as well as new set of challenges for user organizations as well as

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IT service providers. User organizations are already set in the exploration mode. They
could increasingly ask for Cloud Computing services like Amazon AWS as against
investing heavily in the in-house infrastructure. IT service providers need to build
competencies to be able to build or deploy applications in the cloud on such platforms.
Developing, deploying and maintaining the business application outside the four walls
of an enterprise could lead to new service offerings in system integration domain. Patni
has already begun researching and experimentations in Cloud Computing space, along
with few PoCs (proof of concept). Patni would also be evaluating the market on an
ongoing basis as the Cloud Computing evolves in days to come.

References
• Understanding the Cloud Computing/ SaaS/ PaaS markets - Peter Laird, Oracle
(BEA)

• A Short Introduction to Cloud Platforms - David Chappell & Associates

• Software + Services in the Microsoft World - David Chappell & Associates

• Cloud Nine- Specification for a Cloud Computer: David Young, Joyeur

• Is Cloud Computing Viable For Enterprise IT? - James Staten, Forrester

Research

• Emerging Platform Wars in Enterprise Software - Abhijit Dubey, McKinsey & Co