some number of end customers, providing economies of scale at the computing and services layers
˲ ˲ Abstracted infrastructure. The cloud
end customer does not know the exact
location or the type of computer(s)
their applications are running on. Instead, the cloud provider provides performance metrics to guarantee a minimum performance level.
˲ ˲ Little or no commitment. This is
an important aspect of today’s cloud
computing offerings, but as we will see
here, interferes with delivery of the services the enterprise demands.
stack. The end customer is purchasing
the use of a working application. Some
examples of this are NetSuite and
SalesForce.com. (This service is not the
focus of this article.)
illustration by gary neill
Cloud is divided into three basic service models. Each model addresses a
specific business need.
Infrastructure as a Service (IaaS).
This is the most basic of the cloud
service models. The end customer
is purchasing raw compute, storage,
and network transfer. Offerings of this
type are delivered as an operating sys-
tem on a server with some amount of
storage and network transfer. These
offerings can be delivered as a single
server or as part of a collection of serv-
ers integrated into a virtual private
data center (VPDC).
Perfect competition Determines
cloud Pricing strategies
In our experience providing cloud services, many of the current cloud end
customers use price as their primary
decision criteria. As a result, service
providers’ offerings tend toward a least
common denominator, determined
by the realities of providing cloud service at the lowest possible price. At the
same time, the cloud computing market is becoming more crowded with
large providers entering the playing
field, each one of which trying to differentiate itself from the already established players. The result of many pro-