Do Clouds Compute? A Framework for Estimating the Value of Cloud Computing.
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Transcript of Do Clouds Compute? A Framework for Estimating the Value of Cloud Computing.
WIR FORSCHEN FÜR SIE
Do Clouds Compute?A Framework for Estimating the Value of Cloud Computing
(WeB 2008 – The Seventh Workshop on e-Business)Markus Klems, Jens Nimis, Stefan Tai
Forschungszentrum Informatik, Karlsruhe (Germany)
Observations• “Cloud Computing” very popular in 2007 and 2008• Rich ecosystem of Cloud providers, enablers and users• Our understanding: Cloud != Grid
Research questions• What is Cloud Computing?• What is the value proposition of Cloud Computing?
Our approach & contribution• Collect real-world use cases where Cloud Computing is applied• Develop a structured, systematic framework to assist decision makers in
valuating benefits specific to Cloud Computing technology
Introduction
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Since Cloud Computing addresses different usage scenarios than Grid Computing we need a new way to valuate this technology.
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A Short History of Cloud Computing
Amazon EC2(August 2006)
Google App Engine(April 2008)
Microsoft Azure(Oct 2008)
Facebook Platform(May 2007)
Amazon S3(March 2006)
SalesforceAppExchange(March 2006)
Our DefinitionBuilding on compute and storage virtualization technologies, and leveraging the modern Web, Cloud Computing provides scalable and affordable compute utilities as on-demand services with variable pricing schemes, enabling a new consumer mass market.
The classical problem• Under-utilized server resources
waste computing power (and energy)
• Over-utilized servers cause interruption or degradation of service levels
The promise:• Server resources are delivered on-
demand as usage-metered compute utilities
• Cloud-user does not need to forecast demand
• Turn fixed costs into variable costs
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Promises of Cloud Computing
The emerging problems• Highly dynamic scalability
demands• Time to market
Leveraging the modern Web• Evolution of Desktop apps to
Software-as-a-Service• Programmable Web
The promise:• Reduced provision lead times• Scalability• Sophisticated infrastructure is
available as Services
The promise:• A stable, reliable platform to
develop, test and deploy network-centric end-user applications
We propose a basic framework for estimating value and determine benefits from Cloud Computing as an alternative to conventional IT infrastructure, such as on-premise infrastructure.
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Our Framework: Overview
1. Business Scenario
2. Cost Comparison
Value of Cloud Computing Service in opportunity costs
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Qualitative Analysis
1. Business Scenario
Create a list of Cloud Computing providers and their services and evaluate the services that meet your business scenario requirements according to the following criteria.
1.1 Business Case
1.2 Organization
1.3 Compliance
1.4 Business Objectives
1.5 Strategy
1.6 Demand
1.7 Application
1.8 Non-Functional Requirements
1.9 Finance
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Example: Animoto*
1.1 Business Case Animoto Videos Facebook application
1.2 Organization Start-up company
1.3 Compliance (data ownership and privacy regulations)
1.4 Business Objectives Drastically increase user base
1.5 Strategy Viral marketing
1.6 Demand • Linear growth in the first month up to 25,000 users• After a feature change: increase to 250,000 users within three days (1000%)
1.7 Application Generate personalized music videos from users’ images and music files
1.8 Non-Functional Requirements • Scalability• High availability
1.9 Finance Low liquidity, tie costs to growth
*http://aws.typepad.com/aws/2008/04/animoto---scali.html
Quantitative Analysis
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2. Cost Comparison
** e.g. Amazon EC2 and S3, FlexiScale, Mosso (Rackspace), Joyent, etc.* e.g. on-premise IT infrastructure
Infrastructure #1*(world without Cloud Computing)
Infrastructure #2**(world with Cloud Computing)
Define a cost metric for each attribute
Calculate a cost estimate for #1 for each attribute
Define a cost metric for each attribute
Identify comparable infrastructure attributes
Calculate a cost estimate for #2 for each attribute
Aggregate the cost estimates Aggregate the cost estimates
Value of Cloud Computing Services in terms of opportunity costs
Quantitative Analysis: Example
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2. Cost Comparison
** e.g. Amazon EC2 and S3, FlexiScale, Mosso (Rackspace), Joyent, etc.* e.g. on-premise IT infrastructure
Infrastructure #1*(world without Cloud Computing)
Infrastructure #2**(world with Cloud Computing)
Define a cost metric for each attribute
Calculate a cost estimate for #1 for each attribute
Define a cost metric for each attribute
Identify comparable infrastructure attributes
Calculate a cost estimate for #2 for each attribute
Aggregate the cost estimates Aggregate the cost estimates
Value of Cloud Computing Services in terms of opportunity costs
e.g. processing power (ECU), storage capacity, …
On-premise infrastructure Amazon EC2
Cumulative costs for attribute “processing power”
Cumulative costs for attribute “processing power”
Weigh costs for “processing power” with 100%
Weigh costs for “processing power” with 100%
Compare costs
Conclusion• Clouds provide scalable, abstracted IT infrastructure as Services• We propose a structured, systematic framework to value benefits from using
Cloud Computing technology Future Work
• Further categorize use cases and apply our framework• Identify more valuation methods to extend the framework• Develop tools to compare different Cloud offerings and provide decision
support More information
• http://cloudwiki.fzi.de• http://www.eOrganization.de (powered by Google App Engine)• http://www.cloudytimes.com (my blog)
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Conclusion & Future Work
Thank you!
Questions & Discussion
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Backup Slides
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The Beauty of Simplicity
Web Development Infrastructure
complex, error-prone, hideous spaghetti code
simple, test-driven, elegant, stable, agile Web development
framework
complex, error-prone,fragile IT infrastructure
simple, elegant, stable, scalable, pay-per-use
IT infrastructure(as a Service)
End-user applications, Software-as-a-Service (SaaS) Platform-as-a-Service (PaaS) Infrastructure-as-a-Service (IaaS)
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Cloud Ecosystem
Google App Engine
Platform as a Service (PaaS)
End-User Applications
Salesforce AppExchange
Facebook Platform
Facebook Apps
Live Mesh
AppExchange Apps
OpenSocial Apps
Amazon Web Services
Rackspace 3tera
Joyent
Infrastructure as a Service (IaaS)
Brokers, Tools and Frameworks
End-User Applications
flexiscale
NASDAQ Market Replay
Jungle Disk Powerset
MossocohesiveFT
RightScale
MLB
zimoryenomaly
Aptana cloud
Grid Cloud
Underlying concept Utility Computing Utility Computing
Main benefit Solve computationally complex problems
Provide a scalable standard environment for network-centric application development, testing and deployment
Resource distribution / allocation
Negotiate and manage resource sharing; schedulers
Simple user <-> provider model; pay-per-use
Domains Multiple domains Single domain
Character / history Non-commercial, publicly funded
Commercial
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Grid vs. Cloud
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Animoto Use Case
http://www.animoto.com
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Simple Cost Calculation (1)Amazon EC2
Extra-large standard instance 1ECU / instance 8ECU 8 * http://aws.amazon.com/ec2/#instancePrice 0.8 $ / (extra-large standard instance * hour)Additional services 0.2 * assumed to be additional 25% of the ECU priceTotal costs 0.125 $ / (ECU * hour)
On-PremiseServers 1 dell.com: Quad Core Intel Xeon 5405ECUs / server 8 dell.com: Quad Core Intel Xeon 5405ECU 8Price / server 1700 dell.com: Quad Core Intel Xeon 5405Additional infrastructure 850 * assumption: 50% of server costsCapEx 850 $ / year (straight line depreciateion over 3 years, no discounting)CapEx / hour 0.10 $ / hourPower 213 * assumption: 25% of infrastructure costs / yearIT management 85 * assumption: 10% of infrastructure costs / yearNetwork fees 85 * assumption: 10% of infrastructure costs / yearOpEx 383 $ / yearOpEx / hour 0.04 $ / hourTotal costs 0.018 $ / (ECU * hour)
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Simple Cost Calculation (2)
IT infrastructure #1 IT infrastructure #2
Description Quad-core servers* Amazon EC2
Scenario Starting with 400 ECU in the first month; 1000% instant traffic increase in the second month; then back to 400
Metric: USD / (ECU * h) 0.02 0.125
Cum. costs of 1st month 56,729 USD 33,600USD
Cum. costs of first 6 months
340,373 USD 277,200 USD
* plus additional infrastructure, power, networking and IT staff; keep 20% empty space buffer to max. predicted demand
Cost Comparison:
Time (month)Demand (predicted) Cloud Cloud costs Cum Cloud costs
Cloud infrastructure / demand
On-premise infrastructure
On-premise infrastructure costs
Cum on-premise costs
On-premise infrastructure / demand
1 400.00 400 8400 8400 100% 4800 14182 14182 1200%400.00 400 8400 16800 100% 4800 14182 28364 1200%400.00 400 8400 25200 100% 4800 14182 42547 1200%400.00 400 8400 33600 100% 4800 14182 56729 1200%
2 4000.00 4000 84000 117600 100% 4800 14182 70911 120%4000.00 400 8400 126000 10% 4800 14182 85093 120%4000.00 400 8400 134400 10% 4800 14182 99275 120%4000.00 400 8400 142800 10% 4800 14182 113458 120%
3 400.00 400 8400 151200 100% 4800 14182 127640 1200%400.00 400 8400 159600 100% 4800 14182 141822 1200%400.00 400 8400 168000 100% 4800 14182 156004 1200%400.00 400 8400 176400 100% 4800 14182 170186 1200%
4 400.00 400 8400 184800 100% 4800 14182 184368 1200%400.00 400 8400 193200 100% 4800 14182 198551 1200%400.00 400 8400 201600 100% 4800 14182 212733 1200%400.00 400 8400 210000 100% 4800 14182 226915 1200%
5 400.00 400 8400 218400 100% 4800 14182 241097 1200%400.00 400 8400 226800 100% 4800 14182 255279 1200%400.00 400 8400 235200 100% 4800 14182 269462 1200%400.00 400 8400 243600 100% 4800 14182 283644 1200%
6 400.00 400 8400 252000 100% 4800 14182 297826 1200%400.00 400 8400 260400 100% 4800 14182 312008 1200%400.00 400 8400 268800 100% 4800 14182 326190 1200%400.00 400 8400 277200 100% 4800 14182 340373 1200%
Sum 24000.00 13200 277200 115200 340373
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Simple Cost Calculation (3)
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(Fictional) Example: Large-Scale Enterprise
1.1 Business Case Internet-scale testing environment
1.2 Organization Complex and heterogeneous IT infrastructure
1.3 Compliance Industry-dependent, e.g.• Financial / accounting: SOX, Basel II• Health care: HIPAA compliance• …
1.4 Business Objectives Reduce time to market by shortening innovation cycles
1.5 Strategy Private or public Cloud?
1.6 Demand Predictable, expected demand
1.7 Application Java EE + JBoss + Oracle DB + …
1.8 Non-Functional Requirements Security
1.9 Finance Taxation