our hardware in very different ways than
we could ever do before. The lesson we
learned is that a very big part of building these public and private clouds is to
be sure that you can get utilization factors significantly better than traditional
VoGeLs: If you run your services inside the company, privately, utilization
becomes an issue. It amortizes your
costs over a number of cycles. If you run
services outside, on a public service, it
is no longer an issue for you.
RAmLe Th: We are operating hundreds
of servers that are processing data for
projects that no longer exist and are no
longer generating revenue. We do this
because there may be a time and place
where we would need this information,
such as in a warranty situation.
Amazon taught us that we can move
these programs from our data center
to EC2, get them operational, capture
that image, and then shut it down. At
this point we have incurred very minimal costs. When conditions arise that
require the execution of one of those
programs, we can do it. By using Amazon EC2, we can transform what used to
be a fixed cost of allocating a dedicated
in-house server—regardless of whether
we need the information—to a variable
cost that is incurred only when the business case requires it.
The cost savings of using Amazon
is quite compelling. A basic server, operating internally, that sits and does
nothing costs us about $800 to a $1,000
per month to run. We can go to Amazon
and get charged only for what we use, at
a rate of 10 cents to 15 cents an hour.
TucKeR: This is the promise of utility
computing. Users will be able to move
their applications and their platforms
off-site, and they will have more choices. There will be many different kinds
of cloud service providers and, ultimately, opportunities for arbitrage. We
are moving to a scenario where it will
not matter where things execute, and
where choosing an execution platform
will be based on a number of different
characteristics such as cost, security,
performance, reliability, and brand
The great thing is that self-service
has now moved into the provisioning of
virtualized compute, storage, and networking resources. Without even talking to anybody at Amazon, you can use
its service with just a credit card. Enterprise customers are looking at their
internal customers the same way. If the
marketing department wants to run
a new kind of application, traditionally you had to get the IT department
to agree to help you build and deploy
that application. Now IT departments
are able to say, “You’ve got your own developers over in your area. If they want
to develop and run this, fine, go ahead.
Here are the policies for infrastructure
BADRos: One of the key benefits is that
not only is it easier to get going at start
up, but also there is no discontinuity
as things grow. It’s never the case that
you are debating internally whether you
should buy that extra server, invest in a
more sophisticated infrastructure, or be
able to scale to that second machine.
TucKeR: We need to be a little careful.
Not all applications scale easily. While
there is a whole class of applications
that have very easy scaling characteristics, others do not. Databases are part
of this class unless you are using something that has been set up to scale, such
as Amazon’s SimpleDB ( http://aws.am-
azon.com/simpledb/). If you’re running
your own database, unless it has been
designed to be scalable, don’t count on
cReeGeR: How does that poor person
sitting at a small- to mid-cap company
make a decision to invest in clouds?
What is he going to do next quarter or
next year when the CEO comes in and
says, “I read this thing in the Wall Street
Journal stating that all the smart companies are going to cloud computing.”
How is this guy going to respond?
oLsen: First, adopt a philosophy of
buy first, build second—even at the
basic level of “I’m going to start a company, I need IT services.” Do I look to
hire engineers and buy equipment or
do I assume that there’s some outside
service that might meet my needs? To
me that’s half of it. I’m going to assume
that services meeting my needs are already available or are going to evolve
over time. I take a philosophy that says,
“I’m all about my core business. I buy
only infrastructure that directly supports my unique contributions to the
RAmLe Th: I agree with you, if you are
rational. However, you’re dealing with
humans, and they are often not ratio-
nal. When a CEO goes down to his IT
manager’s office and asks, “How are we
utilizing cloud computing?”, the first
thing that manager asks is, “What will
this mean to me?” The biggest obstacle
to change at our company was our own
IT guys trying to protect their jobs. The
change we have done at Bechtel has
been 20% technology and 80% managing the change.
I believe an important part of your
value proposition should be to explain
to both the decision maker as well as the
user how this tool enhances their professional futures. If it does not, those
folks are going to be your obstacles.
TucKeR: There are certainly different
approaches for different businesses
at different points in their life cycles.
A start-up has a certain set of needs.
I completely agree with Greg [Olsen]
to look for all the services that you can
purchase before you think of building it
Animoto is a new company that
makes movies out of photographs
synced with music. It started with 50
instances running on Amazon. They
launched it on Facebook and had very
high success. In a matter of three days
they went to 3,500 instances.
Can you imagine going to your IT department and saying, “We’re running
on 50 servers today, and in two to three
days we want to go to 3,500 servers”? It
just would not have been possible.
cReeGeR: So, for the zero- to a mil-lion-miles-an-hour overnight business
plan that is stalled because of up-front
CapEx costs, cloud computing is going
to be your answer.
What other types of criteria can we
give to people to evaluate how effective their internal IT infrastructure is in
supporting business goals?
VoGeLs: There are many first steps
that corporations take into this world.
Engineers can start by experimenting with these services, using them for
small projects and comparing cost savings. I find that many of the first steps
that enterprises take are just something
small, easy, simple, and cost effective.
The New York Times scanned images
covering a 60-year period in history and
wanted to place them online. These
guys moved four terabytes into S3, ran
all the stuff on a Sunday, spent $25, and
got the product done.
BADRos: Replacing existing organi-