Most of the companies are inclined towards the PAYG approach of cloud computing, but in reality the 'cloud-way' of service delivery is much more than replacing the CapEx with OpEx model of consuming IT services and support for business. However, if the OpEx variable is not managed properly the cloud adoption could cost a company way more than the traditional CapEx based service consumption.
...there’s a higher cost per-hour that becomes aggregated with additional computing resources. Scaling up for increased performance can also multiply your cost by a factor of two or more, and there’s a fixed level of CPU and RAM per category.
- Dustin Smith, Chief Technologist
The best of both worlds cannot be achieved unless the magnitude of cloud 'elasticity' is tied well with the business value which is expected to deliver for every dollar billed to the cloud subscriber. Well, it's easier said than done since the critical link between the business service SLOs and the cloud resource cost model is entirely missing in the real world, while the logic to set the auto-scaling rules are subjective in nature. An interesting observation is that the link was never invented. The cloud subscribers have no real-time visibility of the business value delivered by on-demand provisioning. Well, the subscribers end up paying way more than the (financial) benefits their business can realize from the mindless-elastic nature of the modern cloud environment to avoid the impact of degraded performance on the business services. Eventually, the subscribers are at a loss.
…cloud economics are only achieved by dynamically optimizing the balance between operational and financial objectives of using the cloud. Simply over-provisioning until an intuitive feeling of comfort and safety is achieved is no more than fantasy cloud economics…
- Sharon Wagner, CEO, Cloudyn
Nevertheless, the ultra-elastic nature of cloud environment is causing significant harm to the cloud providers too by eroding their profit margin.
…Amazon said that while its cloud business grew by 90 percent last year, it was significantly less profitable... wired.com
I have designed an innovative analytical algorithm and an approach to establish the missing link. The analytic approach is validated through rigorous experimentation in a typical enterprise grade cloud environment and the results are published in theInternational IEEE SysCon Conference, 2012; and an extended research paper with high level algorithms is published in the IEEE Transactions on Cloud Computing Journal this year. The analytics improves the cloud resource pool (capacity) utilization by ~43% for the cloud service providers and it reduces the cloud subscription OpEx by ~65% for the service consumers.
The above graph shows the improvements demonstrated by optimizing the cloud resource utilization (in Cost*) and by reducing the time to deliver the business services (time in Days*) compared to standard 'elastic' cloud environment with the on-demand resource allocation capabilities.
I invite you to join me in contributing to establishing the missing link. I strongly believe that the deployment of the analytics would establish the missing link, and it would benefit the cloud service providers to save on upfront CapEx to maintain the cloud capacity, while for subscribers it would reduce the cloud subscription OpEx by rightsizing on-demand resource provisioning considering real-time impact on business and associated cost of provisioning the required amount of resources. There is no doubt that this capability eventually would accelerate the cloud adoption in across industries. The analytics will reduce the cloud resource cost (for provider) by ~50%, making the 'cloud-way' of IT service delivery and support an attractive option for business.
About the author
Mohammad has designed three patent pending cloud analytics to automate the enterprise workload placement in wide variety of cloud environments, and to enable inter-cloud workload migration. He is interested to develop the published analytics in association with cloud service providers and ISVs to improve the experience of using cloud services for business. He is reachable at email@example.com