1. Cloud Computing: The New Reality or Just Vapor? CMG2010 December 9, 2010 Paper 5137 Session 504 Dr. Tim R. Norton Simalytic Solutions, LLC 719-635-5825 email: tim.norton@simalytic.com http://www.simalytic.com © 2010 Simalytic Solutions, LLC

2. Cloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 2 Agenda u Introduction  Brief look at Cloud Computing u From Theory to Practice  Applying recent research to the real world u Practical Applications  Real-world considerations u Conclusion

3. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 3 Introduction u What is Cloud Computing?  Services over the Internet Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS)

4. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 4 Classes of Computing u Classes of Utility Computing  Appearance of physical hardware Much like IaaS  Application development specific environments Much like PaaS  Application delivery Much like SaaS or AaaS u Distinguished by  Level of cloud system software abstraction  Level of management

5. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 5 Economics u Cloud Computing Economics: CapEx to OpEx  When demand for a service varies with time  When provisioning for the peak load  When demand is unknown in advance  When applications that scale horizontally Many cloud systems can be used to complete the computation faster than would be possible using a single physical system.

6. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 6 From Theory to Practice u Recent Research  A View of Cloud Computing UC Berkeley Reliable Adaptive Distributed Systems Laboratory l Michael Armbrust, Armando Fox, Rean Griffith, Anthony D. Joseph, Randy Katz, Andy Konwinski, Gunho Lee, David Patterson, Ariel Rabkin, Ion Stoica, and Matei Zaharia l Communications of the ACM, April 2010, v53 n4 p50  To Lease or Not to Lease From Storage Clouds University of Texas at Austin, Edward Walker National Radio Astronomy Observatory, Walter Brisken and Jonathan Romney l IEEE Computer, April 2010, v43 n4 p44  Cloud Computing for Mobile Users: Can Offloading Computation Save Energy? Purdue University, Karthik Kumar and Yung-Hsiang Lu l IEEE Computer, April 2010, v43 n4 p51

7. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 7 Top 10 u Top 10 Obstacles and Opportunities for Cloud Computing  A View of Cloud Computing UC Berkeley Reliable Adaptive Distributed Systems Laboratory (RAD Lab)

8. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 8 Number 1 u Business Continuity and Service Availability  How reliable is the Could provider?  Have outages been because of technical or other reasons?  Is the Cloud provider a single point of failure?  Lack of business continuity internally  Lack of data exchange standards between providers

9. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 9 Number 2 u Data Lock-in  Provider unique APIs  No standardization for data extraction  Attractive to providers Price increases Reduces user’s ability to change if unhappy

10. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 10 Number 3 u Data Confidentiality/Auditability  How does the provider guarantee security?  How are SOX and HIPAA audits done?  External threats  Internal threats

11. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 11 Number 4 u Data Transfer Bottlenecks  Increasing application use of data  High costs of Internet transfers Can erode savings from offloading computing  Data placement within the application as, or more, critical as outside placement  Never underestimate the bandwidth of a 747 full of tape!

12. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 12 Number 5 u Performance Unpredictability  Poor network and I/O sharing Good processor and memory sharing but Performance may vary in seemingly unrelated ways l Solutions: t Better O/S and hardware I/O handling t Flash memory instead of disks  Unpredictable scheduling of virtual machines All the threads of a program need to run at the same time but are on different VMs

13. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 13 Number 6 u Scalable Storage  How do cloud properties apply to persistent storage? Short-term usage l Scaling down as well as up as needed No upfront cost Infinite capacity on demand  Still an open research problem

14. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 14 Number 7 u Bugs in Large-Scale Distributed Systems  Opportunity: Use virtual machines to l Provide isolation l Capture information not available stand-alone

15. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 15 Number 8 u Scaling Quickly  Pay-as-you-go Allows scaling l Up and down l Dynamic with statistical learning predictive tools  The opportunity: Rapid scaling l Saves resources, money and energy  Overlaying Business Models Cloud Users vs. Cloud Providers

16. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 16 Number 9 u Reputation Fate Sharing  The entire cloud may be associated with the behavior of some cloud users.  Legal liability Cloud user or cloud provider Cloud provider liable for an offending cloud user’s actions that affect “innocent bystander” cloud users?

17. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 17 Number 10 u Software Licensing  Effect of virtualization?  Economy of scale Cloud providers spread expensive licenses over many cloud users Software vendors raise license costs to recover loss of revenue  Heavy reliance on open source software  Opportunity: commercial pay-as-you-go software licensing

18. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 18 Reality or Vapor? u Opportunities  Reality  Successfully solve a real business problem Reduce costs Gain functionality u Obstacles  Vapor  Create more problems than solved Add complexity Increase business risk Hidden costs

19. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 19 Unique Use of the Cloud u Saving Energy for Mobile Systems  Battery life is the critical factor  Mobile devices have limited computation power  Off-loading computations can reduce energy use Balance computations and transmissions Function of work done and transmission bandwidth  Issues: privacy, security, reliability and latency  Could apply to non-mobile devices

20. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 20 Buy or Lease u Technical and Financial Trade-offs  Companies use different approaches  What’s included in the analysis? Capital costs Operational costs Interest rates Salvage values

21. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 21 Decision Model u Unique Model Based on NPV Analysis  NPV (Net Present Value) calculated for: Purchase using capital and operational costs Lease using life-of-lease and operational costs  Decision based on delta NPV ΔNPV  0 the buy ΔNPV < 0 the lease

22. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 22 Law of One Price u “In an efficient market, identical goods will have only one price.”  Assumes storage becoming commodity Physical and Cloud u Latency  Not included in the model  Affects validity of commodity assumption

23. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 23 Conclusion u The New Reality or Just Vapor?  A View of Cloud Computing: UC Berkeley BOTH – depending of business objectives and the ability to leverage the cloud while mitigating the obstacles  To Lease or Not to Lease From Storage Clouds: UT / NRAO REALITY – but a business decision  Cloud Computing for Mobile Users: Purdue REALITY – for a very specific application with well defined goals

24. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 24 Conclusion u The New Reality or Just Vapor?  No single answer Too many company specific variables Too many relationships l Cloud provider, cloud user, software vendor, hardware vendor, network provider and all of the other external entities

25. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 25 Conclusion u Research institutions  Identifying many of the issues The Top 10 Obstacles and Opportunities are a good start Each organization needs to develop their own list  Producing tools and techniques Using old tools in new ways Creating new tools specifically designed for cloud environments

26. © 2010 Simalytic Solutions, LLCCloud Computing: The New Reality or Just Vapor? - CMG2010 Paper 5137, December 9, 2010 26 Reality or Vapor? A blend of business and technology. Presentation will be available at: http://www.simalytic.com/Papers.html