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Moving your Infrastructure to the Cloud
How to Maximize Benefits and Avoid Pitfalls
Table of Contents                                                   Executive Summary
Executive Summary                                              1   With Cloud Computing becoming more widely
Introduction                                                   2   utilized, it is important for organizations to
Definitions                                                    3   understand ways to maximize benefits and
    IaaS                                                       4   minimize risks of a move to the cloud. This
Cost Savings of the Cloud                                      4   paper details the significant benefits that Cloud
    Marginal cost - The Economies of Scale                     4
                                                                    Computing brings and provides guidance to IT
    Burstability - The Utility Model                           6
    From Capex to Opex                                         9   decision makers to help their decision making
    Focusing on Core Business                                  9   process. This is especially important given
Realizing the Savings Through Proper                                the plethora of vendors in the marketplace
Vendor Selection                                              10   today. Buyers need to appreciate that assessing
    Billing capabilities                                      10
                                                                    individual providers is critical to the success of
    Fixed costs                                               11
    Minimum charges                                           11   Cloud Computing programs.
Performance and Support                                       12
    Performance                                               12
        Service Level Agreements
        Transparency in performance
        Persistent vs. Ephemeral Storage, CPU Power and more
    Support                                                   13
    Service through Standards                                 14
        Performance through open standards
        Flexibility through open standards

Security and Compliance                                       15
Conclusion                                                    17
About Diversity Analysis                                      18
About Rackspace                                               19
About the author                                              19
    Ben Kepes                                                 19




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Introduction
                                              Cloud Computing is a hot topic these days, with interest shown
                                              across all levels of the organization - from the C-suite, to
                                              Corporate IT through to end users. These various groups are all
                                              interested to see the potential benefits and possible pitfalls from
                                              Cloud Computing. Analyst firms have been quick to document
                                              both the current acceleration in Cloud Computing adoption and
                                              the potential market size in the years ahead. Daryl Plummer,
                                              analyst at Gartner says 1 that “Adoption of the cloud is rising
                                              rapidly - there’s no sign that it’s going back. We have to think
                                              about how [we will] deal with this, more than likely, you will be
                                              dealing with hundreds of cloud services [by 2015]”. Other analysts
                                              concur with a recent IDC survey for example finding that “savvy
                                              CIOs now see the cloud as being an extension of their sourcing
                                              strategies”2

                                              This interest has tended to create two distinct camps however. On
                                              the one hand cloud evangelists who seek to push cloud adoption
                                              immediately despite potential risks. On the other hand the
                                              conservative traditional technologists who seek to dismiss Cloud
                                              Computing as either the same as what has gone before, grossly
                                              over-hyped or even potentially dangerous to the organization
                                              itself.

                                              We believe that Cloud Computing brings unprecedented benefits
                                              to organizations and will be the dominant way of acquiring
                                              technology in the future. In keeping with the highly important
                                              place Cloud Computing will have for organizations, we further
                                              believe that it is vital that leaders within business who are tasked
                                              with making technology acquisition decisions should be well
                                              appraised of both the benefits and the risks of Cloud Computing
                                              and should therefore be well placed to make good buying
                                              decisions.

                                              This paper seeks to give decision makers some guidance so that
                                              they are well informed to ensure maximum cost savings, highest
                                              performance levels and strictest security from the infrastructure
                                              they ultimately invest in. This is important because, as we will

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show, the barriers to entry for a Cloud Computing vendor are
                                              relatively low. While this may mean there is more choice in the
                                              marketplace, it also introduces the potential for underfunded
                                              and low quality providers to enter the market and therefore
                                              organizations looking at moving to the cloud need to be especially
                                              cognisant of the various issues outlined in the following pages.


                                              Definitions

                                                                                Clients

                                                                  User                          Machine
                                                                Interface                       Interface


                                                                        Application
                                                              Components                        Services



                                                                            Platform
                                                           Computer              Network             Storage



                                                                      Infrastructure
                                                                                Servers


                                                      Cloud Computing is often depicted as a layered stack, with
                                                      infrastructure, platform and application components



                                              Before looking at the different issues buyers need to be aware of,
                                              it’s worth setting the scene and defining Cloud Computing. We
                                              broadly accept the Wikipedia definition of Cloud Computing as
                                              follows: “Cloud Computing is Internet-based computing, whereby
                                              shared resources, software, and information are provided to
                                              computers and other devices on-demand, like the electricity grid.”3
                                              Generally Cloud Computing is divided into three distinct areas


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– SaaS (Software-as-a-Service), PaaS (Platform-as-a-Service) and
                                              IaaS (Infrastructure-as-a-Service). This paper will focus on the
                                              IaaS level of the stack.

                                              IaaS
                                              Infrastructure as a Service, delivers computer infrastructure -
                                              typically a platform virtualization environment - as a service.
                                              Rather than purchasing servers, software, datacenter space or
                                              network equipment, clients instead buy those resources as a fully
                                              outsourced service on demand.

                                              Within IaaS, there are some sub-categories that, while outside
                                              the scope of this paper, are worth noting. Generally IaaS can be
                                              obtained as public or private infrastructure or a combination of
                                              the two. “Public cloud” is considered infrastructure that consists
                                              of shared resources, deployed on a self-service basis over the
                                              Internet. By contrast, “private cloud” is infrastructure that
                                              emulates Cloud Computing but does so on a private network.
                                              Additionally, some hosting providers are beginning to offer a
                                              combination of traditional dedicated hosting alongside public and/
                                              or private cloud networks.


                                              Cost Savings of the Cloud
                                              While every situation will be different, it is useful to articulate the
                                              potential areas for cost savings that Cloud Computing can bring
                                              to an organization. The two biggest savings that are gained from
                                              a move to Cloud Computing come from economies of scale and a
                                              utility-based pricing model. We will look at each of these in turn.

                                              Marginal cost - The Economies of Scale
                                              The Boston Consulting Group (BCG) developed the concept of
                                              experience curves to describe how production costs tend to fall in
                                              a predictable fashion as the number of units produced increase. In
                                              other words, the more you produce (or the higher number of units
                                              you provide to the marketplace) the lower the unit cost will be.




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This experience curve graph shows why private organizations are unlikely
                                               to beat the marginal cost of Cloud Computing infrastructure.


                                               Using some analysis of known datacenter and Cloud Computing
                                               costs, Jon Moore found4 that an organization would have to deploy
                                               between 5000 and 15000 servers to get the per-server marginal
                                               cost to a similar level enjoyed by Cloud Computing vendors.

                                               A recent report by O’Reilly Media, demonstrated the relative costs
                                               of internal IT5, Managed Services and cloud infrastructure. It is
                                               important to realize that, if a reputable cloud vendor is chosen, the
                                               quality and availability of the cloud service should be significantly
                                               higher than both internal IT and managed services.

                                     Internal IT                      Managed Services                       The Cloud
 Capital Investment                  $40000                           $0                                     $0
 Setup Costs                         $10000                           $5000                                  $1000
 Monthly Services                    $0                               $4000                                  $2400
 Monthly Labor                       $3200                            $0                                     $1000
 Cost over Three Years               $149000                          $129000                                $106000
 Savings gained                      0%                               13%                                   29%

Estimated costs of infrastructure for two application servers, two database servers and a load balancer across internal,
managed and cloud deployment models. Source O’Reilly Media, George Reese6.




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Adding further weight to the marginal cost argument is the fact
                                              that Cloud Computing vendors, with their massive economies
                                              of scale, can amortize the cost of world class engineers and
                                              operations staff across many thousands of individual servers. Part
                                              of the marginal cost argument suggests then that even when an
                                              organization is able to achieve hardware costs approaching those
                                              enjoyed by Cloud Computing vendors, they would be unlikely to
                                              obtain staff of the calibre employed by those vendors.

                                              Burstability - The Utility Model
                                              Much has been written likening Cloud Computing to a traditional
                                              utility service, like water or electricity. Nicholas Carr’s book The
                                              Big Switch7 is an excellent introductory read to this subject. In the
                                              book Carr says that:


                                                  …fragmentation [of IT into separately installed and managed systems
                                                  that individual corporations own] is wasteful. It imposes large capital
                                                  investments and heavy fixed costs on firms, and it leads to redundant
                                                  expenditures and high levels of overcapacity, both in the technology
                                                  itself and in the labor force operating it…Once it becomes possible
                                                  to provide the technology centrally, large-scale utility suppliers arise
                                                  to displace the private providers…in the end the savings offered
                                                  by utilities become too compelling to resist, even for the largest
                                                  enterprises. The grid wins.


                                              When planning infrastructure requirements, organizations are
                                              forced to use peak load criteria when sizing their resource needs.
                                              What this means is that resources need to be provided for the
                                              highest possible load situation. The graph below illustrates this
                                              point. The green line is on-premise infrastructure and shows
                                              how large, capital-intensive onsite infrastructure either leaves an
                                              organization with excess capacity that is under-utilized or with an
                                              excess in demand leading to service degradation.

                                              The purple line, closely following actual demand shows the
                                              benefits of Cloud Computing infrastructure to scale up and down
                                              readily along with actual demand.




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Capacity vs Utilization curves 8



                                              In another example, looking at some real demand curves shows
                                              why fixed capacity infrastructure is problematic. The image below
                                              indicates an actual traffic history for Walmart.com and indicates
                                              that off-peak load is in the vicinity of 20% of peak load.




                                                 Traffic history of Walmart.com 9




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Cloud Computing, with its elastic capacity, far reduces the need to
                                              forecast website traffic for capacity planning. Vendors are able to
                                              aggregate demand for multiple websites and in doing so smoothen
                                              the total demand for infrastructure. In this way individual
                                              organizations can enjoy the ability to meet their peak demands,
                                              without having to provide infrastructure that will often remain
                                              idle.

                                              A more detailed description of the laws of Cloud Computing
                                              economics, while outside the ambit of this report, has been
                                              published by Business Week.10 It is worth noting that, despite
                                              the per unit price from a utility service provider potentially being
                                              higher than an owned resource through the addition of a utility
                                              margin, aggregate cost will be reduced. As with other utilities,
                                              cloud service providers should only charge for utilized resources,
                                              so although utilities may cost more when they are used, they
                                              cost nothing when they are not and customers can save money -
                                              particularly when workloads are spiky as in the above example.




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From Capex to Opex
                                              A consistent trend, accelerated by the global financial crisis, is a
                                              trend for financial decision makers to pare back on new capital
                                              investments (CapEx), opting wherever possible to fund projects
                                              from operating expenditures (OpEx) instead.

                                              The convergence of rapid technological changes, fiscal pressures
                                              and imperatives and the move to a highly dynamic organizational
                                              structure heighten the demand for a move

                                              The table below provides a simple differentiation between CapEx
                                              and OpEx:




                                                 Differentiating CapEx from OpEx 11



                                              Since Cloud Computing vendors often bill on a pay-as-you-go
                                              basis, acquiring IT infrastructure can become more like buying
                                              paper and toner for a laser printer, than buying the laser printer
                                              itself.

                                              Focusing on Core Business
                                              Cloud Computing allows organizations to focus on their core
                                              business and abstract responsibility for what are essentially
                                              commodity services to a third party. It is the contention of the
                                              author that IT departments should be performing highly strategic
                                              work - basic maintenance of infrastructure is both a negative
                                              drain on their time but also arguably something that is better
                                              achieved by highly skilled specialists rather than the generalists


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that IT staffers tend to be. It has even been estimated 12 that 80%
                                              of IT expenditure goes to simply “keeping the lights on” for an
                                              organization.


                                              Realizing the Savings Through Proper
                                              Vendor Selection
                                              The two reasons for reduced total cost of ownership (TCO) from
                                              Cloud Computing, economies of scale and utility pricing, pre-
                                              suppose that customers will have these benefits passed on to them
                                              by the vendors. For this reason it is important to assess a number
                                              of issues relating to Cloud Computing vendor pricing, billing
                                              capabilities, fixed costs and contract minimums.

                                              Billing capabilities
                                              In order to enjoy cost benefits from Cloud Computing, billing
                                              needs to be as granular as possible. That is, the finer the utility cost
                                              is divided, the higher the savings are likely to be. In the example
                                              of highly variable websites, often the biggest peaks are very short
                                              lived, lasting only a few hours. Cloud Computing infrastructure
                                              should therefore be able to be billed on an hourly basis. The
                                              example below, while simplistic in its approach, illustrates this
                                              fact.

                                                     Example.com is a “daily deals” site that experiences peak loading
                                                    for two hours a day of roughly 10 times its base load. Base load for
                                                   example.com is two individual servers. In this example both vendors
                                                                        charge $1 per server hour.

                                                   Vendor A charges on a daily rate - as example.com has a peak of 20
                                                       servers during the day; their costs would be calculated as:
                                                                  ((24 hours * 20 servers)) * $1 = $480

                                                      Vendor B charges per hour - in this case example.com usage is
                                                                          calculated simply as:
                                                        ((22 hours* 2 servers) + (2 hours * 20 servers)) * $1 = $84


                                              The difference in these two scenarios equates to $396 a day
                                              because Vendor A bases its fee off of maximum daily usage, rather
                                              than the more flexible hourly usage.


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Fixed costs
                                              Many Cloud Computing vendors seek to offset their initial costs
                                              by charging users a setup fee. This setup fee is problematic for
                                              two reasons. Firstly it increases the average cost of the services
                                              themselves. More seriously however it reduces the likelihood that
                                              organizations will be able to truly enjoy the scalability of the cloud.
                                              If fees are charged to provision (or even worse, both provision and
                                              de-provision) infrastructure, organizations will tend to reduce
                                              their provisioning events by averaging demand. For this reason
                                              services from providers who charge setup fees are sub-optimal and
                                              should be avoided.

                                              Minimum charges
                                              It is important to assess whether the prospective vendor has
                                              a minimum charge for cloud compute and storage services,
                                              and whether they demand a minimum contract period. Part
                                              of the benefit of Cloud Computing is the ability to both scale
                                              infrastructure to peak demand, and also move work-loads between
                                              providers at will. Any minimum charges or contract periods for
                                              compute or storage services are a barrier to this flexibility and
                                              should be avoided. Fixed fees for other services, such as advanced
                                              monitoring or professional services might make sense when they
                                              are combined with utility compute and storage. These fees should
                                              be assessed on a case-by-case basis.




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Performance and Support
                                              As stated previously, Cloud Computing has the tendency to
                                              democratize technology and reduce the barriers to entry. While
                                              this is a positive trait, it does introduce some risks as operators
                                              can launch with less than excellent performance and levels of
                                              support. It is therefore very important to understand and assess
                                              the performance and service factors of Cloud Computing.

                                              Performance
                                              With increasing demands, and reduced resourcing for IT
                                              departments, it is attractive to avoid relying on already over-
                                              stretched resources to maintain in-house infrastructure, if an
                                              equal or greater level of performance can be obtained through a
                                              Cloud Computing vendor. The following section introduces some
                                              of the most important aspects to consider when evaluating vendor
                                              performance.

                                              Service Level Agreements
                                              Strong Service Level Agreements (SLAs) from Cloud Computing
                                              vendors are a must to ensure performance. Without these
                                              agreements, and penalties for failing to meet them, vendors have
                                              less of an incentive to maintain performance at the highest levels.
                                              SLAs can include factors such as network availability, datacenter
                                              uptime, host failure and migration.

                                              Transparency in performance
                                              While we maintain that Cloud Computing is generally more
                                              reliable than running infrastructure in-house, no Cloud
                                              Computing vendor is immune from service outages, even with
                                              strong SLAs in place. Reputable Cloud Computing vendors
                                              are transparent about performance and care should be taken in
                                              selecting a vendor who is open about things like service outages.
                                              Many Cloud Computing vendors will have real time dashboards to
                                              indicate service status and are likely to have support staff available
                                              24x7 in the event of any problems.




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Persistent vs. Ephemeral Storage, CPU Power and more
                                              In addition to evaluating vendor SLAs and transparency policies,
                                              it is important for buyers to be aware of the technical facets of
                                              Cloud Computing that affect performance and the difference
                                              between vendors. For example, it is important to be aware that
                                              some cloud services do not provide “persistence”, meaning that
                                              in the event of a failure, local data will be lost. Depending on
                                              the type of workloads that will be moved to the cloud, it may be
                                              appropriate for the organization to ensure that server images are
                                              persistent in the event of a failure.

                                              Similarly, dependent on the organization’s needs, it may be
                                              important to ensure server size and CPU power are appropriate
                                              for particular use cases.

                                              Support
                                              When assessing a move from in-house to cloud infrastructure,
                                              but also when assessing different cloud vendors, it is important to
                                              ascertain the quality of support that the vendor can provide.

                                              In-house IT is unlikely to have the scale to be able to offer
                                              dedicated and round the clock support. There is a significant risk
                                              then for service degradations and even outages to occur in an in-
                                              house IT situation. This can be contrasted with Cloud Computing
                                              where the very core business of the vendor is to deliver high
                                              quality and highly available infrastructure services.

                                              We believe therefore that robust support should be an included
                                              feature of cloud infrastructure. We advise prospective Cloud
                                              Computing customers to ensure that support is built into the
                                              base price of the service. While total cost for a service-included
                                              solution may be slightly higher than for one that comes without
                                              service, outsourcing technology requires an ongoing relationship
                                              and hence service should be considered integral to the solution.




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One indicator of high-quality support is the ability to get in
                                              contact with support staff 24x7x365 through multiple channels
                                              such as telephone, chat or email. Another factor to consider is
                                              whether or not the vendor takes responsibility for upgrades and
                                              security patches.

                                              Service through Standards
                                              Cloud Computing infrastructure can either be available in
                                              propriety formats and protocols, or in broadly accepted open
                                              standards. It is our contention that open standards increase the
                                              overall quality of performance as well as give users flexibility and
                                              security over their infrastructure.

                                              Performance through open standards
                                              While outside of the scope of this report, we contend that open
                                              standards encourage the creation of a network of related and
                                              ancillary products and services. This ecosystem will include
                                              infrastructure monitoring and management tools which can help
                                              increase the overall performance of the solution.

                                              Flexibility through open standards
                                              We strongly believe that organizations should have the ability to
                                              move their infrastructure between different providers at will. This
                                              ability gives them the flexibility to react to a changing business
                                              environment, allows them to move between vendors as price and
                                              service offerings change, and gives them a degree of control by
                                              removing vendor lock-in. We advise organizations to think about
                                              solution providers that embrace open standards.




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Security and Compliance
                                              Security should be of general concern for technologists - Cloud
                                              Computing does nothing to change that. Any organization
                                              embarking on infrastructure spend needs to ensure a thorough
                                              due-diligence occurs in terms of security - whether the
                                              infrastructure be on-premise or cloud based.

                                              Notwithstanding this we believe that cloud infrastructure provides
                                              a level of security beyond the capability of most on-premise
                                              deployments. There are a number of specialist services that cloud
                                              providers can provide that, due to their cost or complexity, would
                                              generally be unavailable in traditional infrastructure situations.

                                              Unfortunately there is a significant level of doubt created by
                                              traditional vendors regarding the security of Cloud Computing
                                              and it is important to understand how security is handled in the
                                              cloud. In order to ensure the highest standards of security for their
                                              customer data, cloud providers employ world standard security
                                              professionals and follow industry best practices to keep data safe.

                                              It has to also be stressed however that security is a shared
                                              responsibility between vendors and customers. While vendors
                                              have an obligation to ensure datacenters are built to the highest
                                              level of reliability and security, it is also incumbent upon users to
                                              ensure they use best practices in areas they have control over – the
                                              utilization of firewalls, strong passwords and employee vetting
                                              are some of the areas that are beyond the control of the Cloud
                                              Computing vendor.

                                              The other important issue for businesses using a cloud vendor is
                                              compliance. Many businesses are required to be compliant with
                                              a host of different regulations. Relevant acts and standards that
                                              businesses may need to comply with include:

                                                •	 Health Insurance Portability and Accountability Act
                                                   (HIPAA) relating to the security and privacy of health data
                                                •	 Statement on Auditing Standards No. 70 (SAS70) relating to
                                                   the internal control of service organizations
                                                •	 SSAE16, a new standard that will apply from 2011

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•	 Payment Card Industry Data Security Standard (PCI
                                                   DSS) relating to the security and privacy of credit card
                                                   information
                                              When an organization puts its data in third party datacenters, it
                                              is important that the outsourcing vendors are also compliant with
                                              these requirements. Even though the regulatory requirements
                                              vary depending on the area of business and legal jurisdiction, most
                                              cloud vendors are compliant with SAS 70 Type II audit, a global
                                              auditing standard designed to evaluate and issue an opinion on
                                              a service organization’s controls (SAS70 will be superseded by
                                              SSAE16 in 2011).

                                              Cloud vendors hosting data of clients from the financial sector also
                                              need to be compliant with the higher standards of PCI DSS, while
                                              those hosting data from the medical sector need to comply with
                                              HIPAA. For these customers it may be appropriate to ascertain
                                              whether the vendor supports a dedicated/hybrid capability for PCI
                                              and HIPAA Compliance standards.

                                              While by no means an exhaustive list, we would advise customers
                                              to ask prospective vendors the following questions:13

                                                •	 What is your approach to service security? Can you offer an
                                                   overview of your general security approach?
                                                •	 What security procedures are in place at the datacenter?
                                                   How many technicians have access to my data and how well
                                                   are those technicians vetted before they are given access?
                                                   How do you maintain physical security of your datacenter?
                                                •	 What are the security measures you use to authenticate
                                                   users?
                                                •	 What level of encryption do you offer to protect my data?
                                                •	 How secure is your application and do you work with any
                                                   independent security vendors to vet the overall security of
                                                   your product?
                                                •	 Are you compliant with the particular regulations applicable
                                                   to my business?



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Conclusion
                                              Cloud Computing is undoubtedly a growing revolution within IT.
                                              However, as with any paradigm shift, there are risks and rewards
                                              which need to be finely balanced.

                                              While we believe that Cloud Computing brings unprecedented
                                              benefits to organizations and will be the dominant way of
                                              acquiring technology in the future, we also realize that IT decision
                                              makes are confused given the sheer number of vendors in the
                                              marketplace. For this reason IT decision makers need to be well
                                              appraised of the issues around price, performance and security of
                                              their chosen supplier.

                                              We recommend that a full due diligence process be undertaken
                                              when assessing vendors and that, where appropriate, independent
                                              advice should be obtained that matches the product offering with
                                              the business requirements.




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About Diversity Analysis
                                              Diversity Analysis is a broad spectrum consultancy specialising
                                              in SaaS, Cloud Computing and business strategy. Our research
                                              focuses on the trends in these areas with greater emphasis on
                                              technology, business strategies, mergers and acquisitions. The
                                              extensive experience of our analysts in the field and our closer
                                              interactions with both vendors and users of these technologies
                                              puts us in a unique position to understand their perspectives
                                              perfectly and, also, to offer our analysis to match their needs.
                                              Our Analysts take a deep dive into the latest technological
                                              developments in the above mentioned areas. This, in turn, helps
                                              our clients stay ahead of the competition by taking advantage of
                                              these newer technologies and, also, by understanding any pitfalls
                                              they have to avoid.

                                              Our Offerings: We offer both analysis and consultancy in the
                                              areas related to SaaS and Cloud Computing. Our focus is on
                                              technology, business strategy, mergers and acquisitions. Our
                                              methodology is structured as follows:

                                                •	 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
                                              Rackspace Hosting is the world’s leading specialist in hosting and
                                              Cloud Computing. The San Antonio-based company provides
                                              Fanatical Support® to its customers, across a portfolio of IT
                                              services, including Managed Hosting and Cloud Computing.
                                              Rackspace is also the founder of OpenStack™, an open source
                                              cloud platform with broad industry support, designed to offer
                                              cloud consumers greater choice. For more information, visit www.
                                              rackspace.com.




                                              About the author
                                              Ben Kepes
                                              Ben is the founder and managing director of Diversity Limited, a
                                              consultancy specializing in Cloud Computing/SaaS, Collaboration,
                                              Business strategy and user-centric design. More information on
                                              Ben and Diversity Limited can be found at http://diversity.net.nz




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[1] http://blogs.computerworld.com/17008/single_largest_opportunity_in_cloud_computing

[2] http://www.networkworld.com/news/2010/090710-more-private-cloud-adoption-expected.html

[3] http://en.wikipedia.org/wiki/Cloud_computing

[4] http://www.cloudcomputingeconomics.com/2009/01/experience-curves-for-data-center.html

[5] http://broadcast.oreilly.com/2008/10/the-economics-of-cloud-c.html

[6] http://broadcast.oreilly.com/2008/10/the-economics-of-cloud-c.html for more information about the
economics of Cloud Computing see also http://gigaom.com/2010/06/06/lazy-hazy-crazy-the-10-laws-of-
behavioral-cloudonomics/

[7] http://www.amazon.com/Big-Switch-Rewiring-Edison-Google/dp/0393062287

[8] http://www.chades.net/

[9] Alexa

[10] http://www.businessweek.com/technology/content/sep2008/tc2008095_942690.htm

[11] http://broadcast.rackspace.com/
hosting_knowledge/whitepapers/GettingOnTheRightSideOfThe
CapexVsOpexDivide.pdf

[12] Gartner Report
http://www.gartner.com/it/page.jsp?id=497088

[13] Ref, Diversity Analysis whitepaper, http://diversity.net.nz/wp-content/uploads/2010/03/Questions_
To_Ask_Your_Cloud_Vendor3.pdf, Diversity Limited 2010, K Subramanian, B Kepes




Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls 	
                                                   ­                                                     20
© Diversity Limited, 2010 Non-commercial reuse with attribution permitted

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Moving your Infrastructure to the Cloud

  • 1. Moving your Infrastructure to the Cloud How to Maximize Benefits and Avoid Pitfalls
  • 2. Table of Contents Executive Summary Executive Summary 1 With Cloud Computing becoming more widely Introduction 2 utilized, it is important for organizations to Definitions 3 understand ways to maximize benefits and IaaS 4 minimize risks of a move to the cloud. This Cost Savings of the Cloud 4 paper details the significant benefits that Cloud Marginal cost - The Economies of Scale 4 Computing brings and provides guidance to IT Burstability - The Utility Model 6 From Capex to Opex 9 decision makers to help their decision making Focusing on Core Business 9 process. This is especially important given Realizing the Savings Through Proper the plethora of vendors in the marketplace Vendor Selection 10 today. Buyers need to appreciate that assessing Billing capabilities 10 individual providers is critical to the success of Fixed costs 11 Minimum charges 11 Cloud Computing programs. Performance and Support 12 Performance 12 Service Level Agreements Transparency in performance Persistent vs. Ephemeral Storage, CPU Power and more Support 13 Service through Standards 14 Performance through open standards Flexibility through open standards Security and Compliance 15 Conclusion 17 About Diversity Analysis 18 About Rackspace 19 About the author 19 Ben Kepes 19 Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 1 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 3. Introduction Cloud Computing is a hot topic these days, with interest shown across all levels of the organization - from the C-suite, to Corporate IT through to end users. These various groups are all interested to see the potential benefits and possible pitfalls from Cloud Computing. Analyst firms have been quick to document both the current acceleration in Cloud Computing adoption and the potential market size in the years ahead. Daryl Plummer, analyst at Gartner says 1 that “Adoption of the cloud is rising rapidly - there’s no sign that it’s going back. We have to think about how [we will] deal with this, more than likely, you will be dealing with hundreds of cloud services [by 2015]”. Other analysts concur with a recent IDC survey for example finding that “savvy CIOs now see the cloud as being an extension of their sourcing strategies”2 This interest has tended to create two distinct camps however. On the one hand cloud evangelists who seek to push cloud adoption immediately despite potential risks. On the other hand the conservative traditional technologists who seek to dismiss Cloud Computing as either the same as what has gone before, grossly over-hyped or even potentially dangerous to the organization itself. We believe that Cloud Computing brings unprecedented benefits to organizations and will be the dominant way of acquiring technology in the future. In keeping with the highly important place Cloud Computing will have for organizations, we further believe that it is vital that leaders within business who are tasked with making technology acquisition decisions should be well appraised of both the benefits and the risks of Cloud Computing and should therefore be well placed to make good buying decisions. This paper seeks to give decision makers some guidance so that they are well informed to ensure maximum cost savings, highest performance levels and strictest security from the infrastructure they ultimately invest in. This is important because, as we will Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 2 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 4. show, the barriers to entry for a Cloud Computing vendor are relatively low. While this may mean there is more choice in the marketplace, it also introduces the potential for underfunded and low quality providers to enter the market and therefore organizations looking at moving to the cloud need to be especially cognisant of the various issues outlined in the following pages. Definitions Clients User Machine Interface Interface Application Components Services Platform Computer Network Storage Infrastructure Servers Cloud Computing is often depicted as a layered stack, with infrastructure, platform and application components Before looking at the different issues buyers need to be aware of, it’s worth setting the scene and defining Cloud Computing. We broadly accept the Wikipedia definition of Cloud Computing as follows: “Cloud Computing is Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on-demand, like the electricity grid.”3 Generally Cloud Computing is divided into three distinct areas Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 3 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 5. – SaaS (Software-as-a-Service), PaaS (Platform-as-a-Service) and IaaS (Infrastructure-as-a-Service). This paper will focus on the IaaS level of the stack. IaaS Infrastructure as a Service, delivers computer infrastructure - typically a platform virtualization environment - as a service. Rather than purchasing servers, software, datacenter space or network equipment, clients instead buy those resources as a fully outsourced service on demand. Within IaaS, there are some sub-categories that, while outside the scope of this paper, are worth noting. Generally IaaS can be obtained as public or private infrastructure or a combination of the two. “Public cloud” is considered infrastructure that consists of shared resources, deployed on a self-service basis over the Internet. By contrast, “private cloud” is infrastructure that emulates Cloud Computing but does so on a private network. Additionally, some hosting providers are beginning to offer a combination of traditional dedicated hosting alongside public and/ or private cloud networks. Cost Savings of the Cloud While every situation will be different, it is useful to articulate the potential areas for cost savings that Cloud Computing can bring to an organization. The two biggest savings that are gained from a move to Cloud Computing come from economies of scale and a utility-based pricing model. We will look at each of these in turn. Marginal cost - The Economies of Scale The Boston Consulting Group (BCG) developed the concept of experience curves to describe how production costs tend to fall in a predictable fashion as the number of units produced increase. In other words, the more you produce (or the higher number of units you provide to the marketplace) the lower the unit cost will be. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 4 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 6. This experience curve graph shows why private organizations are unlikely to beat the marginal cost of Cloud Computing infrastructure. Using some analysis of known datacenter and Cloud Computing costs, Jon Moore found4 that an organization would have to deploy between 5000 and 15000 servers to get the per-server marginal cost to a similar level enjoyed by Cloud Computing vendors. A recent report by O’Reilly Media, demonstrated the relative costs of internal IT5, Managed Services and cloud infrastructure. It is important to realize that, if a reputable cloud vendor is chosen, the quality and availability of the cloud service should be significantly higher than both internal IT and managed services. Internal IT Managed Services The Cloud Capital Investment $40000 $0 $0 Setup Costs $10000 $5000 $1000 Monthly Services $0 $4000 $2400 Monthly Labor $3200 $0 $1000 Cost over Three Years $149000 $129000 $106000 Savings gained 0% 13% 29% Estimated costs of infrastructure for two application servers, two database servers and a load balancer across internal, managed and cloud deployment models. Source O’Reilly Media, George Reese6. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 5 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 7. Adding further weight to the marginal cost argument is the fact that Cloud Computing vendors, with their massive economies of scale, can amortize the cost of world class engineers and operations staff across many thousands of individual servers. Part of the marginal cost argument suggests then that even when an organization is able to achieve hardware costs approaching those enjoyed by Cloud Computing vendors, they would be unlikely to obtain staff of the calibre employed by those vendors. Burstability - The Utility Model Much has been written likening Cloud Computing to a traditional utility service, like water or electricity. Nicholas Carr’s book The Big Switch7 is an excellent introductory read to this subject. In the book Carr says that: …fragmentation [of IT into separately installed and managed systems that individual corporations own] is wasteful. It imposes large capital investments and heavy fixed costs on firms, and it leads to redundant expenditures and high levels of overcapacity, both in the technology itself and in the labor force operating it…Once it becomes possible to provide the technology centrally, large-scale utility suppliers arise to displace the private providers…in the end the savings offered by utilities become too compelling to resist, even for the largest enterprises. The grid wins. When planning infrastructure requirements, organizations are forced to use peak load criteria when sizing their resource needs. What this means is that resources need to be provided for the highest possible load situation. The graph below illustrates this point. The green line is on-premise infrastructure and shows how large, capital-intensive onsite infrastructure either leaves an organization with excess capacity that is under-utilized or with an excess in demand leading to service degradation. The purple line, closely following actual demand shows the benefits of Cloud Computing infrastructure to scale up and down readily along with actual demand. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 6 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 8. Capacity vs Utilization curves 8 In another example, looking at some real demand curves shows why fixed capacity infrastructure is problematic. The image below indicates an actual traffic history for Walmart.com and indicates that off-peak load is in the vicinity of 20% of peak load. Traffic history of Walmart.com 9 Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 7 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 9. Cloud Computing, with its elastic capacity, far reduces the need to forecast website traffic for capacity planning. Vendors are able to aggregate demand for multiple websites and in doing so smoothen the total demand for infrastructure. In this way individual organizations can enjoy the ability to meet their peak demands, without having to provide infrastructure that will often remain idle. A more detailed description of the laws of Cloud Computing economics, while outside the ambit of this report, has been published by Business Week.10 It is worth noting that, despite the per unit price from a utility service provider potentially being higher than an owned resource through the addition of a utility margin, aggregate cost will be reduced. As with other utilities, cloud service providers should only charge for utilized resources, so although utilities may cost more when they are used, they cost nothing when they are not and customers can save money - particularly when workloads are spiky as in the above example. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 8 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 10. From Capex to Opex A consistent trend, accelerated by the global financial crisis, is a trend for financial decision makers to pare back on new capital investments (CapEx), opting wherever possible to fund projects from operating expenditures (OpEx) instead. The convergence of rapid technological changes, fiscal pressures and imperatives and the move to a highly dynamic organizational structure heighten the demand for a move The table below provides a simple differentiation between CapEx and OpEx: Differentiating CapEx from OpEx 11 Since Cloud Computing vendors often bill on a pay-as-you-go basis, acquiring IT infrastructure can become more like buying paper and toner for a laser printer, than buying the laser printer itself. Focusing on Core Business Cloud Computing allows organizations to focus on their core business and abstract responsibility for what are essentially commodity services to a third party. It is the contention of the author that IT departments should be performing highly strategic work - basic maintenance of infrastructure is both a negative drain on their time but also arguably something that is better achieved by highly skilled specialists rather than the generalists Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 9 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 11. that IT staffers tend to be. It has even been estimated 12 that 80% of IT expenditure goes to simply “keeping the lights on” for an organization. Realizing the Savings Through Proper Vendor Selection The two reasons for reduced total cost of ownership (TCO) from Cloud Computing, economies of scale and utility pricing, pre- suppose that customers will have these benefits passed on to them by the vendors. For this reason it is important to assess a number of issues relating to Cloud Computing vendor pricing, billing capabilities, fixed costs and contract minimums. Billing capabilities In order to enjoy cost benefits from Cloud Computing, billing needs to be as granular as possible. That is, the finer the utility cost is divided, the higher the savings are likely to be. In the example of highly variable websites, often the biggest peaks are very short lived, lasting only a few hours. Cloud Computing infrastructure should therefore be able to be billed on an hourly basis. The example below, while simplistic in its approach, illustrates this fact. Example.com is a “daily deals” site that experiences peak loading for two hours a day of roughly 10 times its base load. Base load for example.com is two individual servers. In this example both vendors charge $1 per server hour. Vendor A charges on a daily rate - as example.com has a peak of 20 servers during the day; their costs would be calculated as: ((24 hours * 20 servers)) * $1 = $480 Vendor B charges per hour - in this case example.com usage is calculated simply as: ((22 hours* 2 servers) + (2 hours * 20 servers)) * $1 = $84 The difference in these two scenarios equates to $396 a day because Vendor A bases its fee off of maximum daily usage, rather than the more flexible hourly usage. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 10 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 12. Fixed costs Many Cloud Computing vendors seek to offset their initial costs by charging users a setup fee. This setup fee is problematic for two reasons. Firstly it increases the average cost of the services themselves. More seriously however it reduces the likelihood that organizations will be able to truly enjoy the scalability of the cloud. If fees are charged to provision (or even worse, both provision and de-provision) infrastructure, organizations will tend to reduce their provisioning events by averaging demand. For this reason services from providers who charge setup fees are sub-optimal and should be avoided. Minimum charges It is important to assess whether the prospective vendor has a minimum charge for cloud compute and storage services, and whether they demand a minimum contract period. Part of the benefit of Cloud Computing is the ability to both scale infrastructure to peak demand, and also move work-loads between providers at will. Any minimum charges or contract periods for compute or storage services are a barrier to this flexibility and should be avoided. Fixed fees for other services, such as advanced monitoring or professional services might make sense when they are combined with utility compute and storage. These fees should be assessed on a case-by-case basis. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 11 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 13. Performance and Support As stated previously, Cloud Computing has the tendency to democratize technology and reduce the barriers to entry. While this is a positive trait, it does introduce some risks as operators can launch with less than excellent performance and levels of support. It is therefore very important to understand and assess the performance and service factors of Cloud Computing. Performance With increasing demands, and reduced resourcing for IT departments, it is attractive to avoid relying on already over- stretched resources to maintain in-house infrastructure, if an equal or greater level of performance can be obtained through a Cloud Computing vendor. The following section introduces some of the most important aspects to consider when evaluating vendor performance. Service Level Agreements Strong Service Level Agreements (SLAs) from Cloud Computing vendors are a must to ensure performance. Without these agreements, and penalties for failing to meet them, vendors have less of an incentive to maintain performance at the highest levels. SLAs can include factors such as network availability, datacenter uptime, host failure and migration. Transparency in performance While we maintain that Cloud Computing is generally more reliable than running infrastructure in-house, no Cloud Computing vendor is immune from service outages, even with strong SLAs in place. Reputable Cloud Computing vendors are transparent about performance and care should be taken in selecting a vendor who is open about things like service outages. Many Cloud Computing vendors will have real time dashboards to indicate service status and are likely to have support staff available 24x7 in the event of any problems. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 12 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 14. Persistent vs. Ephemeral Storage, CPU Power and more In addition to evaluating vendor SLAs and transparency policies, it is important for buyers to be aware of the technical facets of Cloud Computing that affect performance and the difference between vendors. For example, it is important to be aware that some cloud services do not provide “persistence”, meaning that in the event of a failure, local data will be lost. Depending on the type of workloads that will be moved to the cloud, it may be appropriate for the organization to ensure that server images are persistent in the event of a failure. Similarly, dependent on the organization’s needs, it may be important to ensure server size and CPU power are appropriate for particular use cases. Support When assessing a move from in-house to cloud infrastructure, but also when assessing different cloud vendors, it is important to ascertain the quality of support that the vendor can provide. In-house IT is unlikely to have the scale to be able to offer dedicated and round the clock support. There is a significant risk then for service degradations and even outages to occur in an in- house IT situation. This can be contrasted with Cloud Computing where the very core business of the vendor is to deliver high quality and highly available infrastructure services. We believe therefore that robust support should be an included feature of cloud infrastructure. We advise prospective Cloud Computing customers to ensure that support is built into the base price of the service. While total cost for a service-included solution may be slightly higher than for one that comes without service, outsourcing technology requires an ongoing relationship and hence service should be considered integral to the solution. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 13 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 15. One indicator of high-quality support is the ability to get in contact with support staff 24x7x365 through multiple channels such as telephone, chat or email. Another factor to consider is whether or not the vendor takes responsibility for upgrades and security patches. Service through Standards Cloud Computing infrastructure can either be available in propriety formats and protocols, or in broadly accepted open standards. It is our contention that open standards increase the overall quality of performance as well as give users flexibility and security over their infrastructure. Performance through open standards While outside of the scope of this report, we contend that open standards encourage the creation of a network of related and ancillary products and services. This ecosystem will include infrastructure monitoring and management tools which can help increase the overall performance of the solution. Flexibility through open standards We strongly believe that organizations should have the ability to move their infrastructure between different providers at will. This ability gives them the flexibility to react to a changing business environment, allows them to move between vendors as price and service offerings change, and gives them a degree of control by removing vendor lock-in. We advise organizations to think about solution providers that embrace open standards. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 14 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 16. Security and Compliance Security should be of general concern for technologists - Cloud Computing does nothing to change that. Any organization embarking on infrastructure spend needs to ensure a thorough due-diligence occurs in terms of security - whether the infrastructure be on-premise or cloud based. Notwithstanding this we believe that cloud infrastructure provides a level of security beyond the capability of most on-premise deployments. There are a number of specialist services that cloud providers can provide that, due to their cost or complexity, would generally be unavailable in traditional infrastructure situations. Unfortunately there is a significant level of doubt created by traditional vendors regarding the security of Cloud Computing and it is important to understand how security is handled in the cloud. In order to ensure the highest standards of security for their customer data, cloud providers employ world standard security professionals and follow industry best practices to keep data safe. It has to also be stressed however that security is a shared responsibility between vendors and customers. While vendors have an obligation to ensure datacenters are built to the highest level of reliability and security, it is also incumbent upon users to ensure they use best practices in areas they have control over – the utilization of firewalls, strong passwords and employee vetting are some of the areas that are beyond the control of the Cloud Computing vendor. The other important issue for businesses using a cloud vendor is compliance. Many businesses are required to be compliant with a host of different regulations. Relevant acts and standards that businesses may need to comply with include: • Health Insurance Portability and Accountability Act (HIPAA) relating to the security and privacy of health data • Statement on Auditing Standards No. 70 (SAS70) relating to the internal control of service organizations • SSAE16, a new standard that will apply from 2011 Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 15 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 17. • Payment Card Industry Data Security Standard (PCI DSS) relating to the security and privacy of credit card information When an organization puts its data in third party datacenters, it is important that the outsourcing vendors are also compliant with these requirements. Even though the regulatory requirements vary depending on the area of business and legal jurisdiction, most cloud vendors are compliant with SAS 70 Type II audit, a global auditing standard designed to evaluate and issue an opinion on a service organization’s controls (SAS70 will be superseded by SSAE16 in 2011). Cloud vendors hosting data of clients from the financial sector also need to be compliant with the higher standards of PCI DSS, while those hosting data from the medical sector need to comply with HIPAA. For these customers it may be appropriate to ascertain whether the vendor supports a dedicated/hybrid capability for PCI and HIPAA Compliance standards. While by no means an exhaustive list, we would advise customers to ask prospective vendors the following questions:13 • What is your approach to service security? Can you offer an overview of your general security approach? • What security procedures are in place at the datacenter? How many technicians have access to my data and how well are those technicians vetted before they are given access? How do you maintain physical security of your datacenter? • What are the security measures you use to authenticate users? • What level of encryption do you offer to protect my data? • How secure is your application and do you work with any independent security vendors to vet the overall security of your product? • Are you compliant with the particular regulations applicable to my business? Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 16 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 18. Conclusion Cloud Computing is undoubtedly a growing revolution within IT. However, as with any paradigm shift, there are risks and rewards which need to be finely balanced. While we believe that Cloud Computing brings unprecedented benefits to organizations and will be the dominant way of acquiring technology in the future, we also realize that IT decision makes are confused given the sheer number of vendors in the marketplace. For this reason IT decision makers need to be well appraised of the issues around price, performance and security of their chosen supplier. We recommend that a full due diligence process be undertaken when assessing vendors and that, where appropriate, independent advice should be obtained that matches the product offering with the business requirements. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 17 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 19. About Diversity Analysis Diversity Analysis is a broad spectrum consultancy specialising in SaaS, Cloud Computing and business strategy. Our research focuses on the trends in these areas with greater emphasis on technology, business strategies, mergers and acquisitions. The extensive experience of our analysts in the field and our closer interactions with both vendors and users of these technologies puts us in a unique position to understand their perspectives perfectly and, also, to offer our analysis to match their needs. Our Analysts take a deep dive into the latest technological developments in the above mentioned areas. This, in turn, helps our clients stay ahead of the competition by taking advantage of these newer technologies and, also, by understanding any pitfalls they have to avoid. Our Offerings: We offer both analysis and consultancy in the areas related to SaaS and Cloud Computing. Our focus is on technology, business strategy, mergers and acquisitions. Our methodology is structured as follows: • 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. Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 18 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 20. About Rackspace Rackspace Hosting is the world’s leading specialist in hosting and Cloud Computing. The San Antonio-based company provides Fanatical Support® to its customers, across a portfolio of IT services, including Managed Hosting and Cloud Computing. Rackspace is also the founder of OpenStack™, an open source cloud platform with broad industry support, designed to offer cloud consumers greater choice. For more information, visit www. rackspace.com. About the author Ben Kepes Ben is the founder and managing director of Diversity Limited, a consultancy specializing in Cloud Computing/SaaS, Collaboration, Business strategy and user-centric design. More information on Ben and Diversity Limited can be found at http://diversity.net.nz Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 19 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted
  • 21. [1] http://blogs.computerworld.com/17008/single_largest_opportunity_in_cloud_computing [2] http://www.networkworld.com/news/2010/090710-more-private-cloud-adoption-expected.html [3] http://en.wikipedia.org/wiki/Cloud_computing [4] http://www.cloudcomputingeconomics.com/2009/01/experience-curves-for-data-center.html [5] http://broadcast.oreilly.com/2008/10/the-economics-of-cloud-c.html [6] http://broadcast.oreilly.com/2008/10/the-economics-of-cloud-c.html for more information about the economics of Cloud Computing see also http://gigaom.com/2010/06/06/lazy-hazy-crazy-the-10-laws-of- behavioral-cloudonomics/ [7] http://www.amazon.com/Big-Switch-Rewiring-Edison-Google/dp/0393062287 [8] http://www.chades.net/ [9] Alexa [10] http://www.businessweek.com/technology/content/sep2008/tc2008095_942690.htm [11] http://broadcast.rackspace.com/ hosting_knowledge/whitepapers/GettingOnTheRightSideOfThe CapexVsOpexDivide.pdf [12] Gartner Report http://www.gartner.com/it/page.jsp?id=497088 [13] Ref, Diversity Analysis whitepaper, http://diversity.net.nz/wp-content/uploads/2010/03/Questions_ To_Ask_Your_Cloud_Vendor3.pdf, Diversity Limited 2010, K Subramanian, B Kepes Moving your Infrastructure to the Cloud — How to Maximize Benefits and Avoid Pitfalls ­ 20 © Diversity Limited, 2010 Non-commercial reuse with attribution permitted