CIO · Cloud · Data

Why are enterprises moving away from public cloud?

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We often hear of enterprises that move applications from their corporate data center to public cloud. This may come in the form of lift and shift. But then something happens that causes the enterprise to move it out of public cloud. This yo-yo effect and the related consequences create ongoing challenges that contribute to several of the items listed in Eight ways enterprises struggle with public cloud.

In order to better understand the problem, we need to work backwards to the root cause…and that often starts with the symptoms. For most, it starts with costs.

UNDERSTANDING THE ECONOMICS

The number one reason why enterprises pull workloads back out of cloud has to do with economics. For public cloud, it comes in the form of a monthly bill for public cloud services. In the post referenced above, I refer to a cost differential of 4x. That is to say that public cloud services cost 4x the corporate data center alternative for the same services. These calculations include fully-loaded total cost of ownership (TCO) numbers on both sides over a period of years to normalize capital costs.

4x is a startling number and seems to fly in the face of a generally held belief that cloud computing is less expensive than the equivalent on-premises corporate data center. Does this mean that public cloud is not less expensive? Yes and no.

THE IMPACT OF LEGACY THINKING

In order to break down the 4x number, one has to understand legacy thinking heavily influences this number. While many view public cloud as less expensive, they often compare apples to oranges when comparing public cloud to corporate data centers. And many do not consider the fully-loaded corporate data center costs that includes server, network, storage…along with power, cooling, space, administrative overhead, management, real estate, etc. Unfortunately, many of these corporate data center costs are not exposed to the CIO and IT staff. For example, do you know how much power your data center consumes and the cost for real estate? Few IT folks do.

There are five components that influence legacy thinking:

  1. 24×7 Availability: Most corporate data centers and systems are built around 24×7 availability. There is a significant amount of data center architecture that goes into the data center facility and systems to support this expectation.
  2. Peak Utilization: Corporate data center systems are built for peak utilization whether they use it regularly or not. This unused capacity sits idle until needed and only used at peak times.
  3. Redundancy: Corporate infrastructure from the power subsystems to power supplies to the disk drives is designed for redundancy. There is redundancy within each level of data center systems. If there is a hardware failure, the application ideally will not know it.
  4. Automation & Orchestration: Corporate applications are not designed with automation & orchestration in mind. Applications are often installed on specific infrastructure and left to run.
  5. Application Intelligence: Applications assume that availability is left to other systems to manage. Infrastructure manages the redundancy and architecture design manages the scale.

Now take a corporate application with this legacy thinking and move it directly into public cloud. It will need peak resources in a redundant configuration running 24×7. That is how they are designed, yet, public cloud benefits from a very different model. Running an application in a redundant configuration at peak 24×7 leads to an average of 4x in costs over traditional data center costs.

This is the equivalent of renting a car every day for a full year whether you need it or not. In this model, the shared model comes at a premium.

THE SOLUTION IS IN PLANNING

Is this the best way to leverage public cloud services? Knowing the details of what to expect leads one to a different approach. Can public cloud benefit corporate enterprise applications? Yes. Does it need planning and refactoring? Yes.

By refactoring applications to leverage the benefits of public cloud rather than assume legacy thinking, public cloud has the potential to be less expensive than traditional approaches. Obviously, each application will have different requirements and therefore different outcomes.

The point is to shed legacy thinking and understand where public cloud fits best. Public cloud is not the right solution for every workload. From those applications that will benefit from public cloud, understand what changes are needed before making the move.

OTHER REASONS

There are other reasons that enterprises exit public cloud services beyond just cost. Those may include:

  1. Scale: Either due to cost or significant scale, enterprises may find that they are able to support applications within their own infrastructure.
  2. Regulatory/ Compliance: Enterprises may use test data with applications but then move the application back to corporate data centers when shifting into production with regulated data. Or compliance requirements may force the need to have data resources local to maintain compliance. Sovereignty issues also drive decisions in this space.
  3. Latency: There are situations where public cloud may be great on paper, but in real-life latency presents a significant challenge. Remote and time-sensitive applications are good examples.
  4. Use-case: The last catch-all is where applications have specific use-cases where public cloud is great in theory, but not the best solution in practice. Remember that public cloud is a general-purpose infrastructure. As an example, there are application use-cases that need fine-tuning that public cloud is not able to support. Other use-cases may not support public cloud in production either.

The bottom line is to fully understand your requirements, think ahead and do your homework. Enterprises have successfully moved traditional corporate applications to public cloud…even those with significant regulatory & compliance requirements. The challenge is to shed legacy thinking and consider where and how best to leverage public cloud for each application.

Business · Cloud · Data

Amazon drives cloud innovation toward the enterprise

 

Amazon continues to drive forward with innovation at a blistering pace. At their annual re:Invent confab, Amazon announced dozens of products to an audience of over 30,000 attendees. There are plenty of newsworthy posts outlining the specific announcements including Amazon’s own re:Invent website. However, there are several announcements that specifically address the growing enterprise demand for cloud computing resources.

INNOVATION AT A RAPID SCALE

One thing that stuck out at the conference was the rate in which Amazon is innovating. Amazon is innovating so fast it is often hard to keep up with the changes. On one hand, it helps Amazon check the boxes when compared against other products. On the other hand, new products like Amazon Rekognition, Polly and Lex demonstrate the level of sophistication that Amazon can bring to market beyond simple infrastructure services. By leveraging their internal expertise in AI and Machine Learning, Amazon’s challenge is one of productizing the solutions.

The sheer number of new, innovative solutions is remarkable but makes it hard to keep track of the best solutions to use for different situations. In addition, it creates a bulging portfolio of services like that of its traditional corporate software competitors.

As an enterprise uses more of Amazon’s products, the fear of lock-in grows. Should this be a concern to either Amazon or potential enterprise customers? Read my post: Is the concept of enterprise lock in a red herring? Lock in is a reality across cloud providers today, not just Amazon. Building solutions for one platform does not provide for easy migration to competing solutions. Innovation is a good thing, but does come at a cost.

DRIVING TOWARD THE EDGE

There are two issues that challenge enterprises evaluating the potential of cloud computing. One challenge is the delivery mechanism. Not all applications are well suited for a centralized cloud-based delivery approach. There are use cases in just about every industry where computing is best suited at the edge. The concept of hybrid cloud computing is one way to address it. At re:Invent, Amazon announced Greengrass which moves the computing capability of Amazon’s Lambda function to a device. At the extreme, Greengrass enables the ability to embed cloud computing functions on a chip.

Moving cloud functionality to the edge is one issue. A second perspective is that it signals Amazon’s acknowledgement that not all roads end with public cloud. The reality is that most industries have use cases where centralized cloud computing is simply not an option. One example, of many, is processing at a remote location. Backhauling data to the cloud for processing is not a viable option. In addition, Internet of Things (IoT) is presenting opportunities and challenges for cloud. The combination of Greengrass and, also announced, Snowball Edge extend Amazon’s reach to the edge of the computing landscape.

AS THE SNOWBALL ROLLS DOWNHILL…

As a snowball rolls downhill, it grows in size. Last year, Amazon announced the data storage onboarding appliance, Snowball. Since last year’s re:Invent, Amazon found customers were using Snowball in numbers exceeding expectations. In addition to the sheer number of Snowball devices, customers are moving larger quantities of data onto Amazon’s cloud. Keep in mind it is still faster to move large quantities of data via truck than over the wire. To address this increase in demand, Amazon drove an 18-wheeled semi-truck and trailer on stage to announce Amazon Snowmobile. While everyone thought it was a gimmick, it is quite real. Essentially, Snowmobile is a semi-trailer that houses a massive storage-focused data center. From an enterprise perspective, this addresses one of the core challenges to moving applications to cloud: how to move the data…and lots of it.

IS AMAZON READY FOR ENTERPRISE?

With the announcements made to date, is Amazon truly ready for enterprise demand? Amazon is the clear leader for public cloud services today. They squarely captured the webscale and startup markets. However, a much larger market is still relatively untapped: Enterprises. Unlike the webscale and startup markets, the enterprise market is both exponentially larger and incredibly more complex. Many of these issues are addressed in Eight ways enterprises struggle with public cloud. For any cloud provider, understanding the enterprise is the first of several steps. A second step is in providing products and services that help enterprises with the onboarding process. As an analogy: Building a beautiful highway is one thing. When you ask drivers to build their own onramps, it creates a significant hurdle to adoption. This is precisely the issue for enterprises when it comes to public cloud. Getting from here to there is not a trivial step.

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To counter the enterprise challenges, Amazon is taking steps in the direction of the enterprise. First is the fundamental design of their data centers and network. Amazon understands that enterprises are looking for data center redundancy. One way they address this is by maintaining multiple data centers in each location. After learning about the thoughts and reasons behind some of their strategic decisions, it’s clear there is quite a bit of deep thinking that goes into decisions. That will bode well for enterprises. Second, Amazon announced their partnership with VMware. I addressed my thoughts on the partnership here: VMware and Amazon AWS Partnership: An Enterprise Perspective. A third step is Amazon’s AWS Migration Acceleration Program. This program is led by a former CIO and directly targets enterprises looking to adopt Amazon’s services. In addition to their internal migration organization, Amazon is building out their partner program to increase the number of partners helping enterprises migrate their applications to Amazon.

ALL ROADS DO NOT LEAD TO PUBLIC CLOUD

Even with all the work Amazon is doing to woo enterprise customers, significant challenges exist. Many assume that all roads lead to public cloud. This statement overstates the reality of how companies need to consume computing resources. There are several paths and outcomes supporting the reality of enterprise computing environments.

How Amazon addresses those concerns will directly impact their success in the enterprise market. Amazon is closing the gap, but so are competitors like Microsoft and others.

Business · CIO · Cloud · IoT

The five most popular posts of 2016

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While 2016 is quickly coming to a close, it offers plenty to reflect on. For the CIO, IT organizations and leaders who work with technology, 2016 offered a glimpse into the future and the cadence in which it takes. We learned how different industries, behaviors and technologies are impacting business decisions, societal norms and economic drivers.

Looking back on 2016, here is a list of the top-5 posts on AVOA.com.

#5: Understanding the five tiers of IoT core architecture

In this July post, I suggest an architecture to model IoT design and thinking.

#4: Changing the language of IT: 3 things that start with the CIO

This May post attracted a ton of attention from CIOs (and non-CIOs) as part of their transformation journey.

#3: IT transformation is difficult, if not impossible, without cloud

Another May post on the importance of the intersection between transformation and cloud.

#2: Microsoft Azure Stack fills a major gap for enterprise hybrid cloud

Only one of two top-five vendor-related posts digs into the importance of Microsoft’s hybrid cloud play.

And the #1 post…

#1: Is HPE headed toward extinction

This provocative post looks at business decisions by HPE and how they impact the enterprise buyer.

2017 is already shaping up nicely with plenty of change coming. And with that, I close out 2016 wishing you a very Happy New Year and an even better 2017!

Business · Cloud · Data · IoT

The role of Open Source and Foundations in Enterprises

I had the pleasure of joining a panel discussion that included several instrumental folks including Duncan Johnston-Watt, Sam Ramji & Monty Taylor on the role of the foundation. Without getting too far into the nitty gritty, there were some very interesting themes that came up…of which I will try to summarize here.

MATURITY OF ENGAGEMENT

Many of the foundations are working with Open Source Software as a means to bring collaboration and organization to a collective of like-minded folks. In many ways, the role of the foundation is to bring organization to chaos.

During the conversation, a core conversation topic is the maturity model of engagement for customers. The model encompasses a number of different attributes. One of which is the relationship between individuals, foundations and commercial organizations.

Software Maturity Spectrum

 

One of the big misnomers with Open Source Software is that it is free. Open Source Software is not free. As one panelist equated: taking software without paying (or contributing back) is theft. At the opposite end of the spectrum is commercial software where a commercial agreement outlines the exchange of software for money. And, of course, there are a myriad of different attributes in between.

While this is only one way to slice the conversation, there are many ways in which one could look at how individuals engage with Open Source Software and how it, in turn, relates to foundations.

THREE COMPLEXITIES TO FOUNDATIONS

Each foundation follows a varied mission. However, there are three facets that often cover the core aspects of the foundation’s mission: Political, Economic and Technical. Many foundations will focus on the technical attributes without consideration of the economic nor political components. Unfortunately, only focusing on one facet leads to challenges that will manifest in a number of ways.

Not all foundations will, or need to, serve each of these dynamics. However, there is a reality setting in that the majority of foundations will need to address each of them in order. To ignore one or two (ie: political or economic) provides a significant, if not unsurmountable challenge.

FOCUS ON THE VALUE

In the end, foundations are complex. For the enterprise, it is important to understand the role of the foundation and how it aligns with your own vision and needs. It is important to find the appropriate ways to engage in a collaborative fashion.