Posts Tagged ‘private cloud

What do you do once you become the top bookseller and web-startup hoster? You shoot for the enterprise market!

That seemed to be the sentiment of Amazon’s Cloud for the Enterprise event which the company held in Sofitel Los Angeles last week. The pitch boiled down to:

  • Amazon’s datacenters are the most reliable, secure, and cost-effective option you can find,
  • Amazon Virtual Private Cloud (VPC) lets you securely connect an isolated subnet of Amazon Web Services (AWS) to your intranet,
  • If you are already virtualizing your applications, why not then run them in AWS and not spend money and efforts on whatever datacenter expansion you might need on your end?

Why this makes sense?

Amazon went a long way to make their datacenters more reliable and secure, they have the technology for network connectivity, and they do get significant economies of scale. The latter is not just words. Amazon’s CTO – Werner Vogels – showed pie chart of the cost structure for their datacenters.

They have almost eliminated labor among the significant cost factors – which is great considering that labor is one of the top (if not the top) elements of typical on-premise IT environments.

However, they went further than that. In their current cost structure server hardware is by far the number one cost absorbing more than 50% of what they have to spend. This made them work hard on improving the utilization of these resources. What they did is sell these compute resources as a combination of:

  • Reserved instances (when customers commit to resources for a long period of time to get 50%-70% discounts),
  • On-demand instances (normal hourly pay as you go model), and
  • Spot instances (when the remaining resources get automatically auctioned among bidders in a name-your-own-price scheme)

This means that they can get server utilization close to 100% – which is incredible considering that typical numbers in the industry are probably within 10-30% range.

Considering all this, why bother buying a new server when Amazon can deliver a potentially better service (with additional availability options, global datacenters and so on) at a lower rate?

What is in it for Amazon?

This also seems to be a natural adjacent market for Amazon (the IaaS company – not the online retailer). If they already successfully host web startups and are the most well-known compute platform for tasks such video transcoding or text recognition – why not use that same expertise and infrastructure to sell it to enterprises?

Enterprise IT is a huge market with great margins, and as corporate CIOs are looking for ways to use the cloud to cut costs and/or become more agile – Amazon has the brand recognition to be their number one choice.

This seems to be a high priority effort for the company considering that they have their CTO attending and delivering his keynote at events like the one in LA. And it should be if Amazon does not want to be squeezed between enterprise vendors like Microsoft and VMware getting the higher margin enterprise cloud segment, while initiatives like OpenStack commoditizing lower end cloud compute services.

With so many vendors going after them, Amazon needs to keep moving fast to stay relevant.

Are we there yet?

With all that being said, today Amazon’s pitch remains a great story rather than reality for both technology, business and perception issues.

Technological challenges include inability for IT today to easily (or better automatically) move workloads between their on-premise datacenters and Amazon’s cloud. Even the virtual machine images Amazon is using are not compatible with the VMware and Hyper-V hypervisors enterprises have.

Obviously most of the existing IT management and monitoring tools that companies are using are not yet Amazon aware either – meaning that administrators cannot just get Amazon added to what they have already but instead would have to learn new ways and find new tools.

From business perspective, Amazon is just not an enterprise vendor yet. Corporations have contracts with Microsoft, IBM and others – Amazon is brand new to these customers.

Perception-wise, Amazon needs to find early adopters of that enterprise IT scenario to showcase at events like this. The 4 customers presenting at the event in LA were using AWS to:

  1. Offload computation tasks,
  2. Do image processing,
  3. Host web sites, and
  4. Host their SaaS electronic medical records application in the cloud.

Needless to say, these are not the scenarios Amazon was trying to pitch.


With the enterprises starting to evaluate their cloud options, the fight for the cloud for the enterprise is only going to become hotter. It is going to be interesting to see if Amazon finds a way to “descend” from the public cloud to the on-premise and hybrid scenarios with smart partnering and acquisition strategy, or traditional enterprise and virtualization players add public cloud to their solution sets and squeeze Amazon out.


private-cloudMaybe not just yet unless you are an extremely large hosting company or enterprise with big IT and research and development (R&D) budgets.

To re-cap, this week at its Worldwide Partner Conference (WPC) Microsoft announced that together with their hardware partners they will start offering (some time later this year as a limited release for folks like Dell, HP, Fujitsu and eBay) Azure containers basically giving others the ability to run pretty much what Microsoft is running in their own public Windows Azure cloud datacenters.

This is an important move from Microsoft which they kind of hinted in the past and something we expected them to do back in 2009. Microsoft is not the only hosting company in the world, and there are governments and enterprises who – for security and other reasons – are continuing to invest in their own datacenters – these are big markets which Microsoft wants to address and not let go to VMware and other competitors.

However, the biggest drawback which all observers seem to be missing is that while Azure technology stack is similar to regular Microsoft Windows/IIS/SQL/.NET stack, it is not completely identical. You just cannot take an existing Windows Server application and point it to Azure. Even Microsoft’s own flagship server applications such as Exchange, SharePoint and Dynamics CRM and ERP systems do not run on Azure. Applications actually have to be ported to Azure which is certainly doable but does require R&D efforts on the side of application creators.

Today the set of applications available for Azure is so limited that I can probably count them with my fingers: Microsoft ported their SQL database, SugarCRM just released an Azure version of their tool, Quest Software has a set of cloud-based management services for administrators, and FullArmor has a beta of their endpoint management tool.

Maybe there is one or two other application that I missed – but you get the story. As of today, even if you get an Azure container (and you actually have to buy one – you will not be able to re-purpose the servers you already have) – there is not much you will be able to run on it.

For eBay this maybe worth it – they have their own custom-developed application and big budgets for developing and improving it. For most other folks out there – applications need to come first and make private Azure valuable enough. I am not saying that this will not happen – folks in Redmond are doing their best to recruit their partners to form the Microsoft cloud ecosystem – but we are definitely not there yet.

Quest-CloudIt’s probably about time for me to provide a quick overview of what we at Quest Software are doing in the cloud computing area.

There are two main “cloud” directions for us:

  • Using the cloud for our own offerings.
  • Enabling public and private clouds.

1. Using Clouds

Using Cloud means providing our products as a service. Most of these efforts are not public yet, but you can get some of the information on what is coming if you see the recording of my TechEd session.

Also, Quest has one of the best virtual desktop (VDI) solutions in the market – vWorkspace. And a growing number of service providers are signing up to provide a virtual desktop service built on that system.

2. Enabling Clouds

Enabling Clouds means helping customers get to the cloud infrastructure and managing their regular and cloud environments efficiently.

For public clouds we have currently have a set of products for Microsoft’s online offerings- BPOS, including solutions for:

  • Migrating from Lotus Notes and Novell GroupWise to Exchange Online
  • Migrating from Lotus Notes, SharePoint, file shares, and Exchange public folders to SharePoint Online
  • Migrating from Lotus Sametime to Office Communications Online (coming soon)

For private clouds (in a sense of cloud-like dynamic virtualized datacenters within companies) we have our Vizioncore product set the most important from cloud perspective are probably:

  • vControl – self-service provisioning, multi-VM control and task-based automation, and
  • vFoglight – solution to manage performance, measure capacity and perform chargeback for virtual and physical infrastructures.

I hope this provides a good quick overview/disclosure of why I am here and what is it that we are doing in the space.

There’s a lot more coming and I’ll keep our cloud news appearing in this blog.

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private-cloudHere I continue the 2009 predictions series started with my IaaS/PaaS 2009 post.

In the world of cloud computing we are living in very exciting times. Cloud Computing is the buzz word of the day even though the segment is barely two years old. Interest in private clouds is even more astonishing considering that these barely exist at all and we are likely to be only entering the first days of real developments in this area.

In a nutshell, private clouds are Amazon-like cost-effective and scalable infrastructures but run by companies themselves within their firewalls.

There are a couple of reasons why this is an interesting option for a lot of enterprises out there:

  1. Some data and systems belong on premise due to security and legal concerns, or simply companies wanting to stay in control.
  2. The story of not having to provision and manage hardware resources when using public clouds from Amazon and others sounds great but the reality is that enterprises already have hardware of their own. Instead of tearing down datacenters in which they have been investing all these years – why not start to use them more efficiently?

These are the reasons why both enterprise and government structures (you don’t expect Department of Defense to use Amazon for their apps, do you?) are very interested in pursuing the private cloud option, and analysts like Gartner are giving the concept their high blessing.

Surprisingly enough, I would argue that no real solution is currently obvious on the market.

VMware is working on their Datacenter OS and vCloud initiatives, and has had LabManager offering for a long time. Microsoft is obviously happy sell you their Hyper-V and Systems Center Virtual Machine Manager. And then there are quite a few startups like 3Tera (grid operating system), ParaScale (disk-storage aggregation software), Cassatt (resource-pooling technology), Elastra (cloud-like application management inside a company’s firewall) and so on.

However, I believe that the real solution is yet to come.

Here are the key characteristics that private clouds should have from my perspective:

  1. More than a hypervisor and VM management tool: storage services, standard scalability APIs such as load balancing and queuing, and so on.
  2. Unified approach with public clouds: APIs, software stack, licensing, virtual machine formats (in case of IaaS), development tools…

Unified public/private approach is important for a few reasons:

  • It would provide for scenarios like outbursting (using internal clouds most of the time and public ones for peak loads) and freedom to go to external vendors and back.
  • From development perspective, ability to write application once and sell it both as SaaS offering from a public cloud and software one for private deployments will stimulate software vendors to create solutions for the platform.
  • And obviously the more unified the technology gets the easier it would be for in-house developers and IT to have skills necessary to develop and manage applications of their own.

There are companies working on elements of private cloud systems of the future but there is nothing close to being a real solution with Amazon-like acceptance (still curious to see what happens to Eucalyptus in 09 by the way).

Will 2009 be the year when private clouds really take off? I seriously doubt so – there seems to be a lot of work ahead to make this a reality. However, there definitely is demand (for the reasons I mentioned above), analysts’ blessing, and a lot companies rushing in to deliver a solution. Which means that no matter how early things are we will see a lot of interest developments in this area in 2009.

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Is someone going to step in and provide commercial support for the Eucalyptus open-source project basically following the Red Hat model which made Linux commercially successful and generated good revenue for Red Hat?

Here’s what I am thinking based on what I saw and heard at the Cloud Computing Expo (see my notes here):

  1. We know that Amazon’s Web Services are rapidly becoming the de-facto industry standard for cloud infrastructure.
  2. The biggest complaints that people have against them are that they are only provided by Amazon, and thus lock you in one vendor and do not support the “private” clouds (on-premise deployment).
  3. Both of these could potentially be addressed by the Eucalyptus project which implements EC2 and (in the next release) S3 APIs and can be used on hardware of your choice.
  4. Eucalyptus team is not planning to use their project commercially and Rich Wolski is skeptical about competing against Amazon.
  5. The project is open source.

In my mind this means that there is significant unsatisfied demand and a technology which someone could use to satisfy it. So my expectation is that we will see someone doing that. If not now then in next year when Eucalyptus is more feature-complete and stable (which is expected in the Spring).

Heck, this could be a very interesting play by Citrix considering that both Amazon and Citrix are using XEN, and Citrix is now trying hard to move beyond terminal access to virtualization and cloud space…

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The posts on this blog are provided “as is” with no warranties and confer no rights. The opinions expressed on this site are mine and mine alone, and do not necessarily represent those of my employer Jelastic or anyone else for that matter. All trademarks acknowledged.

© 2008-2012 Dmitry Sotnikov

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