Gustav: There’s actually a really powerful application that comes with this. Along with day-to-day virtualization stuff is the issue of disaster recovery (DR). Most SMBs make zero investment in DR. Virtualization becomes incredibly cost effective when it has the ability to send VMs to the cloud for access only when needed.

simon cRosBy: The benefits are huge and the numbers are very compelling.

Gustav: Typical disaster-recovery costs are 2N (twice the cost of the infrastructure). To say that I can go to 1.05N is game changing.

simon cRosBy: The great thing about this kind of approach is that the cloud vendor can lose a data center and my data is still there. They can lose two simultaneously and my data is still there.

mache cReeGeR: The virtualization abstraction enables fungible data-cen-ter capacity, much like the power industry, where people can trade excess capacity on the open market.

simon cRosBy: That’s right, and like the power industry you will have purely financial players, people in the business who know nothing about technology, simply trading capacity back and forth. The first arbitrage players on the cloud are already in business.

Gustav: I will take it back to the insurance space. I can buy true insurance. I can pay 2% of the value of my assets today and know I can absolutely run my exact stuff.

mache cReeGeR: So it’s a bulletproof insurance premium.

tom BishoP: That’s right. It’s how you compute and manage risk.

Gustav: It’s “How do I take my 2N problem down to 0.02N?” It’s “How do I take 98% of my DR cost to zero?” That is just a different way of saying “How do I take 49% of my total IT cost to zero?”

simon cRosBy: At the same time, the high-end fault tolerance (FT) moves down to a commoditized, value-priced capability rather than a high-end, hardware capability.

Gustav: To give you an example of the thinking behind DR, take 9/11. 9/11 was a black swan; it never should have happened. Any statistical model that you build fails when the black swan shows up, and DR is only valuable if it actually works when the black swan shows up.

You are actually building a model that goes past the black swan. The thing about 9/11 that made it even more chaotic than the tragedy of the Trade Center towers coming down was that 12 Broad Street (the lower Manhattan telecom switching station) filled with water. This resulted in no teleco for the southern tip of Manhattan, creating a black swan.

Theoretically the thing that could never happen, which is that every divergent teleco path in southern Manhattan becomes blocked, happened. Many of the problems that are solved in the typical case are not sufficient in the DR case because the normal constraints do not apply.

tom BishoP: The number-one conclusion at this one event I attended was that during Hurricane Katrina every company’s disaster-recovery plan assumed people could get to work. Every disaster-recovery plan in New Orleans failed because people could not get to work.

simon cRosBy: 9/11 was about mortality. Nobody reasons about how to recover from mortal events. At the end of the day, the rational guy in the SMB doesn’t deal with that level of risk. If an event like that happens, his business is lost.

Gustav: There actually are levels of defined risk. You’ve got systemic risk. If the counterparty doesn’t show up, the entire market cannot function. That’s one level of badness. But think about the SMB. There’s a stat I’ve seen recently that says that 70% of businesses that are forced to close for more than a month never reopen. Systematic risk, well priced, is more valuable to the SMB than it is to a large enterprise like my employer.

The counterargument made earlier states that if this business fails, it is cheaper to start a new business than to pay 2N for 10 years. The problem is that we have never been able to present a reasonably priced alternative.

Effectively the SMB owner is self-insured and betting on his own ability. I would say that DR for the SMB is actually a richer market than DR for the enterprise. I think part of the problem is defining the minimum requirement. It doesn’t need to be up in the next five minutes; he just needs to know that he can get it working in two or three days

under any circumstances.
tom BishoP: One of the things I
learned at Bell Labs was that in terms
of fault coverage, you got far better re-
sults by recovering from failure than
you ever got by avoiding it.
simon cRosBy: That is right. A re-
cent Stanford research model tells us
to assume that computer systems are
inherently fragile, humans build bad
software, and applications are going to
decay and fail. Therefore we should ar-
chitect our applications so they inher-
ently contain the concept of failure and
restart.
mache cReeGeR: We are almost out
of time here. I’d like you all to summa-
rize what the takeaways are and what
kind of advice you’re going to give to
the poor person who’s trying to make
sense of the world today and how he
can move forward.
steve heRRoD: At the highest level,
I think we should all avoid breathing
our own exhaust too much. At the end
of the day, virtualization is a tool. The
goals are to make life better, and par-
ticularly for SMBs, to make computing
simpler. To make it easy for SMBs is to
enable them to operate highly available
and securely, and to solve their busi-
ness problems with their applications.
It is actually about manageability
and how to do more and make things
run better with less staff. When you’re
evaluating your workload and products
to address it, you should be looking
at the overall story, not just at a snap-
shot. It’s really what you are going to be
working with day-to-day. I believe that
is what we’re all trying to focus on. That
is certainly what VMware is trying to fo-
cus on.

aLLen ste WaRt: Think locally but really have your eye on what you’re going to do with virtualization moving forward. Someone in the SMB space is typically looking at virtualization to get flexibility, but think about the actual applications, the use cases, and the user profiles to determine why you want to use virtualization in your environment.

Manageability of the environment is really going to be a critical aspect, not just the fact that you’re creating a virtual machine. Integrating the stack into your environment is going to be very important from a small business perspective. You need to determine