Cloud Computing Vs Traditional IT
Cloud Computing Vs Traditional IT
Sponsored By:
CloudU is a service mark/trademark of Rackspace US, Inc. in the United States and/or other countries
Executive Summary
Table of Contents
Executive Summary
1
A New Dawn or Just Another Day
Ellison vs. Benioff
2
From Water-wheel to Utility Power
An analogy for the Cloud
5
Mainframes to Cloud
A brief history of technological innovation 7
Virtualization
The ability to increase computing efficiency 9
Democratization of Computing
Bringing enterprise scale infrastructure to
small and medium businesses
10
An Encoding.com Case Study:
12
Scalability and fast provisioning
for IT at web scale
Commoditization of infrastructure
Enabling IT to focus on the strategic
aspects of its role
Summary
About Diversity Analysis
About Rackspace
13
15
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2010 marked the escalation of the war of words between the respective CEOs
of Oracle and Salesforce.com, Larry Ellison and Marc Benioff. In the words of
these larger than life figures, we can actually see an outline of many of the themes
that will be explored in the following pages. Is Cloud Computing fundamentally
different from what came before? What does it mean for an organization to do
Cloud Computing? These are the questions that one must ask to answer the
question Is Cloud Computing a Revolution or simply version 2.0 of a continuous
series of innovations.
For his part, Oracles Ellison has a history of discounting Cloud Computing as no
more than a new name for what has gone before. In a 2009 interview1 that has
become somewhat of a web cult classic, he said:
I mean, they just change a term and they think theyve invented technology.
Our definition of Cloud Computing is multi-tenant, its faster, half the cost,
pay as you go, it grows as you grow or shrinks as you shrink. It is extremely
efficient. Were not going to show you computers taller than you. Were not going
to show you a cloud in a box because clouds dont come in a box. They never
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Growth
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Amazon
EC2
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Rackspace
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Cloud
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So just what is Cloud Computing, and why is it so different from what has come
before? The following pages will detail four main areas in which Cloud Computing
allows businesses to break from the past:
Each of these areas does not itself create a computing revolution: virtualization
as Ellison would point out, has been around for some time, but together, they are
changing computing forever. Lets see how.
...As a business resource, information technology today looks a lot like electric
power did at the start of the last century [when it was routinely produced by
individual businesses rather than utility providers] executives are routinely
sidetracked from their real business by the need to keep their companys private
Noting the similarities between computing and a technology that most would
agree is best handled by specialists rather than individual firms, Carr then moves
onto a discussion about the consequences of self provisioning infrastructure and
the resulting overcapacity that often accompanies it:
are ripe for a shift to centralized supply. Yet companies continue to invest large
sums in maintaining and even expanding their private, subscale data centers.
Why? For the same reason that manufacturers continued to install private electric
generators during the early decades of the 20th century: because of the lack of a
The model that Carr says in emerging is Cloud Computing. Cloud Computing
provides specific economics that are beneficial under many situatio specially
anytime demand is erratic, the organization is in a state of change or when
pressure comes to bear to move from CapEx to OpEx.
While the metaphor comparing Cloud Computing to utility power helps
explain the nearly inexorable forces compelling business to adopt this new
model, it doesnt position this latest technology in the more recent context
of massive technological shifts. For that, we can look at the shift that saw
mainframes transformed into Clouds over the course of only a few decades.
Mainframes to Cloud
A brief history of technological innovation
Democratization of Computing
Bringing enterprise scale infrastructure to
small and medium businesses
10
contention that in a few years time, the need to wait for the provisioning of
infrastructure, the need for skilled engineers to perform the tasks and the need for
administrative staff to keep the lights on will be but a distant memory.
This democratization of computing is paralleled by an ability to rapidly scale
infrastructure to levels previously unobtainable by all but the largest organizations.
11
Encoding.com11 is a company that provides video transcoding services to allow for the integration of video transcoding into workflows. Video transcoding is the process of converting one video file format, like Flash, into another format, like Windows Media. What
this means is that content delivery sites such as MTV, PBS and online training establishments are able to move video processing off
their own servers and onto a third party provider that is built to allow them to scale up their processing at will. In order to build a
scalable product, Encoding.com decided from the outset to reduce hardware costs by usingcloud computingto meet their rapidly
changing processing needs12
Video encoding is a very processor intensive task and hence they decided to integrate with two separate Cloud Computing providers to enable video encoding with almost limitless scale. Theyre also able to route jobs to the closest processing centre to the customer to increase efficiency. These types of activities and the growing business that they support would not have been possible
without Cloud Computing.
12
provisioning. For any organization where workload is erratic, there will always be
one of two situations:
Capacity
Rising
demand
scenario
under
capacity
CAPEX
over capacity
Falling
demand
scenario
Cloud Capacity
Classic Capacity
Demand
Time
13
around the web has created viral phenomena where company websites can
experience huge traffic spikes after being profiled on a television show like Oprah
or evening the local evening news.14
14
Computing. Cloud Computing vendors are often quick to use cost reduction as
their main selling point for the Cloud, but it would appear that users are more
thoughtful than this and perceive the business agility gains to be the number one
benefit of a move to the cloud. A recent SandHill report15 found that around 50%
of respondents consider agility as their primary reason for adopting the Cloud.
A similar result came from Information Week16 which found that over 65% of
respondents cited agility to business needs as a driver for Cloud Computing
Its not hard to believe these statistics when one remembers the estimates that put IT
maintenance at around 80% of total IT expenditure.17 When one considers that Cloud
infrastructure is still nascent and the vast majority of servers are still managed in-house,
this presents a significant opportunity and a significant change agent for traditional IT.
The underlying trend here is pressure upon IT departments to produce greater
outputs, with less resourcing Cloud Computing offers the ability for IT
departments to apply resources as, and where, they are needed.
Clearly the savings to be gained from a move to the Cloud free up IT resources
for adding business value rather than simply maintaining the status quo this
change however will require IT personnel to embrace the new world order and
learn a new set of skills that the organization will require. IT departments, and
individual IT personnel, will need to move from being primarily technologists
with a modicum of business knowledge, to being truly balanced professionals who
can equally mix technical ability with an understanding of the business drivers.
Its hard not to resort to hyperbole when discussing just how much Cloud Computing
allows organizations to focus on their core business. The very fact that they are able
to abstract responsibility for what are essentially commodity services to a third party
drives significantly more value to the organization than any mere financial benefit
through cost reductions that Cloud Computing can bring. Few people would argue
that IT departments should be focusing on high-level strategic work. We contend that
Cloud Computing enables this to occur more readily than ever before.
15
Summary
2011, and the decade after it, will go down in history as the era of the Cloud in
the same way that the 60s was the era of the mainframe. Cloud Computing offers
a massive benefit to organizations and it is our contention that any organization
or individual who routinely interacts with technology solutions will have to learn
how to work with the Cloud.
While some practitioners may feel threatened by this changing paradigm, we
believe the opportunities are ripe for the creation of a new breed of IT worker
one who is in equal parts a technician and a business person, someone who is of
true strategic value to the organization and someone who is much more than a
simple maintainer of technology assets.
16
Research Alerts
Research Briefings
Whitepapers
Case Studies
We also participate in various conferences and are available for vendor briefings
through Telephone and/or Voice Over IP.
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About Rackspace
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Endnotes
[1] http://www.youtube.com/watch?v=KmXJSeMaoTY
[2] http://www.cbronline.com/blogs/cbr-rolling-blog/salesforcecom-fires-back-at-oracles-ellison-benioff-oracleopenworld-220910
[3] http://twitter.com/Werner/status/25005220624
[4] http://www.economist.com/node/17797794
http://www.jackofallclouds.com/2010/08/state-of-the-cloud-august-2010/
[5] http://www.amazon.com/Big-Switch-Rewiring-Edison-Google/dp/0393062287
[6] http://www.nicholasgcarr.com/articlesmt/archives/endofcorporatecomputing.shtml
[7] http://www.amazon.com/Management-Strategies-Cloud-Revolution-Transforming/dp/0071740759
[8] Cloud Computing Emissions Comparison, Nucleus Research, 2010
[9] http://jpf.github.com/domain-profiler/ycombinator.html?2010
[10] http://techcrunch.com/2011/01/05/quora-surge/
[11] http://www.encoding.com/
[12] see videohttp://www.youtube.com/watch?v=n6l0kMLYP6c&feature=player_embedded
[13] http://www.chades.net/
[14] http://www.penn-olson.com/2010/02/10/infographic-facebooks-amazing-growth/, http://blog.facebook.com/blog.
php?post=409753352130, http://socialmediatoday.com/dirktherabbit/162555/twitter%E2%80%99s-growth-doublesbecomes-more-international
[15] http://www.reuters.com/article/idUS144602338520100818
[16] http://www.informationweek.com/news/software/showArticle.jhtml?articleID=211300562
[17] http://www.gartner.com/it/page.jsp?id=497088