Cloud Computing Business Models

Antonio Piraino – Tier1 Research

Topics Covered

1. What is Cloud Computing?

2. Who are the major players Cloud Services?
3. What are SMB’s and Enterprises asking for?
4. What are Managed Hosting Providers doing?
5. How Managed Hosters use virtualization
6. Top Managed Hosting Cloud Players
7. Tomorrow’s Winners and Losers

2 Parallels – Optimized Computing TM

Defining all of this, Cirrus-ly

• Real-time accessible Computing infrastructure

• Access by 3rd party – Public Cloud
• Access only by you – Private Cloud
• Platform supports apps/services/storage
• Constant availability and SLAs
• Order/provision from anywhere
• Scalable on the fly (up/down)
• Easy Web management interface
• Security/privacy
• Pay per use

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Cloud Computing is IT as a Service

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Cloud Apps: Web 2.0, SaaS, Remote apps

• Remote desktop applications

– Run on top of underlying
cloud infrastructure platforms

• SaaS providers
– Run on top of underlying
cloud infrastructure platforms
– CRM, ERP, VoIP, BI, supply chain

• Web 2.0
– interconnectivity and interactivity of
web-delivered content
– New Services exploiting underlying platforms
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Clouds: Grid, IaaS or PaaS?
• PaaS
– ERP,DB,XML files, flat files,web services,
on-demand apps, SaaS hoster, API’s,
– load balancing, DNS configuration, storage
• IaaS providers
– Proxy for buying servers, software,
data center space or network equipment
– Pay for memory, bandwidth, storage consumed
• Grid has many definitions
– Network of computing clusters
– Resources used in parallel
as a virtual super-processor
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Topics Covered

1. What is Cloud Computing?

2. Who are the major players Cloud Services?
3. What are SMB’s and Enterprises asking for?
4. What are Managed Hosting Providers doing?
5. How Managed Hosters use virtualization
6. Top Managed Hosting Cloud Players
7. Tomorrow’s Winners and Losers

7 Parallels – Optimized Computing TM

Amazon Web Services
• Cloud is pricing scheme for developers
• EC2
– Uses Xen, supports open Solaris, and Windows Server
– Rely on APIs (REST, SOAP) for developer apps
– User defines resources – charged per compute hour
• Wraps into Amazon Web Services
– SimpleDB – store, index, query a system
– Simple Queue Service (SQS)
– Simple Storage Service (S3)
– Flexible Payment Service (FPS)
– CloudFront CDN
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Google AppEngine
• Dev tool for Web apps on Google infrastructure
– Does not operate in stand-alone mode like EC2
– Developers hand over code; Google checks request logs,
monitor status of app, push new versions, integrate pieces
• Compete with MS/AWS:
– BigTable vs. SimpleDB and MS SSDS
– DataStore: distributed storage with query engine
• Limited to Python – no PHP/Ruby
• Access to Other Apps
– Google Sites (collaboration) and Google Apps
– APIs into Google Earth, Maps, Images, OpenSocial, etc

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Azure and Force.com
Microsoft Azure Service Platform
• Leverages existing Microsoft Services as a bundle
– Live Services, SQL Services, .NET Services, Sharepoint
Services, Dynamics CRM Services, Visual Studio
– Developers build PC, Web and mobile applications
– Run apps between client, Azure, datacenter
Salesforce.com’s developerforce.com
• ISV and Developers Framework
– API’s available but idea is to develop on Force.com
– App Exchange – rapid onramp objects with drag&drop
– Database services, storage, packaging, tools

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Topics Covered

1. What is Cloud Computing?

2. Who are the major players Cloud Services?
3. What are SMB’s and Enterprises asking for?
4. What are Managed Hosting Providers doing?
5. How Managed Hosters use virtualization
6. Top Managed Hosting Cloud Players
7. Tomorrow’s Winners and Losers

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Use of cloud computing services

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Cloud computing vendors

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What cloud computing is used for

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Internet Applications
• What does the SMB need?
– Accounting, HR, file server replacement, CRM
• What does the mid-tier enterprise need?
– Custom databases, heavy storage, HR/accounting
SaaS
– Heavy SaaS use & More managed hosting
• What does the large enterprise need?
– More datacenter space
– Heavy storage and virtualization support
– More SaaS use
– Top unmet need: managed virtualization

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4th Annual Hosting Transformation Summit North America
15-17 September 2008 • The Mirage Hotel • Las Vegas, Nevada
Top applications overall
• Top SaaS applications, now
– Messaging and Collaboration
– CRM and BI
– BPO and Productivity Apps
– Accounting system / ERP
• Top SaaS applications, 2012
– HR and accounting applications
– File server replacement
– Internet-based NAS/utility storage
– Project management and collaboration
– Shared databases

16 Parallels – Optimized Computing TM

Topics Covered

1. What is Cloud Computing?

2. Who are the major players Cloud Services?
3. What are SMB’s and Enterprises asking for?
4. What are Managed Hosting Providers doing?
5. How Managed Hosters use virtualization
6. Top Managed Hosting Cloud Players
7. Tomorrow’s Winners and Losers

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Evolution of Managed Hosting Sector

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Hosters: Cloud Services Currently Offered
Other
Test & Dev
Remote Storage
Log Processing
Internet Application Hosting
Billing Databases
Batch Computing Jobs
Disaster recovery
Application Development
SaaS applications
Virtualized desktop support
Platform as a service
Utility computing
File Storage
On-demand storage

0% 10% 20% 30% 40% 50% 60% 70% 80%

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Hosters: Largest users of Cloud services

Other

Enterprise

Mid Tier enterprise

SMB

Soho

Other PaaS

SaaS providers

ISV’s

Developers

0% 10% 20% 30% 40% 50% 60%

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Hosters: What do Customers need from you

Other
Easy to use console
Brand-name
IT spend can move from capex-to-opex
Green IT
Tiered Billing system

SLA
Speed of provisioning
Reliability
Security
Flexibility
Low Cost

0% 10% 20% 30% 40% 50% 60%

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Hosters: Customer challenge to Cloud

Shared resources
Software licensing
Product/Service option available
On premise software/legacy infrastructure
CxO sponsorship
Cultural/organizational (resource ownership)
Availability/uptime
Regulation/compliance
Nervous about Security

0% 10% 20% 30% 40% 50% 60%

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Hosters: Your challenges in move to Cloud

Picking the right technology/partners

Understanding with the competition
Don't see a difference with current offering
Happy with our services - why change it
Just beginning to look into it
knowing how to charge
Identifying unique value proposition
Not sure where to start/place efforts
Identifying the market
Internal expertise
Company's other priorities
Costs

0% 5% 10% 15% 20% 25% 30% 35% 40%

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Topics Covered

1. What is Cloud Computing?

2. Who are the major players Cloud Services?
3. What are SMB’s and Enterprises asking for?
4. What are Managed Hosting Providers doing?
5. How Managed Hosters use virtualization?
6. Top Managed Hosting Cloud Players
7. Tomorrow’s Winners and Losers

24 Parallels – Optimized Computing TM

Virtualization Technologies
Type 1/Bare Metal/Hypervisor/x86 Server
• Best for dev/testing, virtual desktop,
legacy server consolidation
• Virtualize access to hardware
• Each VM has a guest OS
• Less server sprawl
– Microsoft Hyper-V
– VMware ESX
– Citrix XenServer (Linux)
– Parallels Server
– Trango
– Sun xVM

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OS Virtualization Technologies
Type 2/OS/Hosted
• Virtual access to a single-kernel
OS = less OS sprawl
• Good for well-powered
datacenters, numerous apps,
high workloads and SaaS
• Quick provisioning
– Parallels Virtuozzo Containers
– Sun Solaris Containers
– OpenVZ
– Unix chroot command
– Linux-VServer

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Virtualization Deployments

• Parallels
– Rackspace, ThePlanet, Enigmatec, Dedipower
• VMware
– Verizon, BT, ATT, Savvis, Terremark, SunGard, Mosso
(Rackspace)
• XEN-based
– FlexiScale, Novell’s Suse, Neocleus, Citrix, Amazon AWS
• Microsoft HyperV
– Layeredtech, SoftLayer, CrystalTech, HostMySite

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The Rackspace experience

VMs 1 2 3 4 5 6 7 8 9

Live Typical Profitability

Migration use deployment

• VMWare (& Parallels Virtuozzo)

• Overall Rationale for paying $$ for Virtualization
– Significantly speedier provisioning
– Better restoration times
– Better uptime for end users
– Demand for qualitative features, flexibility and uptime
• Rackspace invested in training and certification

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Type 2 Virtualization Impact

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Type 2 Virtualization Impact

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New Virtualization features
• VMWare Lab Manager
– library of common configs for setup, capture, storage
• Site Recovery Manager
– Automated help to build, manage, execute DR plans.
• LifeCycle Manager
• Virtual Center
– Provision VMs, monitor performance, optimize resources
• Stage Manager
– Integration, testing, staging, UA testing, to production  
• VMware VMotion
– Live migration away from failing/underperforming servers
• B-Hive Conductor
• VCLOUD

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Type2 Automation
Parallels Operations Automation
– OSS for server provisioning; App management; Service
plan creation and management; task delegation; etc.
• Parallels Business Automation
– Storefront control panel for orders, accounts, billing,
invoicing, trouble tickets, fraud control, Chargebacks
• Parallels Virtuozzo Containers 4.0
• Parallels Infrastructure Manager
– add-on web-based tool for Virtuozzo
• Parallels Plesk Control Panel
• Plesk Billing Software
– Signups; Process Payments; Provision; Recurring Bill

32 Parallels – Optimized Computing TM

Topics Covered

1. What is Cloud Computing?

2. Who are the major players Cloud Services?
3. What are SMB’s and Enterprises asking for?
4. What are Managed Hosting Providers doing?
5. How Managed Hosters use virtualization?
6. Top Managed Hosting Cloud Players
7. Tomorrow’s Winners and Losers

33 Parallels – Optimized Computing TM

Top Managed Hosting Cloud Players
• OpSource On-Demand & Connect
• Mosso (Rackspace) CloudFS, CloudFiles
• StrataScale’s Ironscale (RagingWire)
• FlexiScale (XCalibre)
• Terremark Infinistructure & Enterprise Cloud
• Savvis Utility Services (Compute & Storage)
• AT&T Synaptic Hosting platform
• Layeredtech on-demand storage
• Peer1, SunGard Availability Services, NaviSite, Verizon
Business, The Planet working on new services

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Mosso (RackScale)

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Flexiscale (XCalibre)

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IronScale (RagingWire)

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Topics Covered

1. What is Cloud Computing?

2. Who are the major players Cloud Services?
3. What are SMB’s and Enterprises asking for?
4. What are Managed Hosting Providers doing?
5. How Managed Hosters use virtualization?
6. Top Managed Hosting Cloud Players
7. Tomorrow’s Winners and Losers

38 Parallels – Optimized Computing TM

Hosters: PaaS opportunities
• The Symbiotic Friend
– Utilize your PaaS/managed hosting services
▪ Integrated Security, Network, DB, Storage, SLAs, etc
– A higher level PaaS provider
▪ Offering API for automated application hosting
▪ Provide library of images and stacks
▪ Take away the pain of fostering startups that fail
• Other Partner Opportunities
– Storage (Nirvanix): Includes desktop backup software,
file sharing, flash drive,Internet media file system
– ISV/Developers: Front end, Back end, PaaS for you

39 Parallels – Optimized Computing TM

Pitfalls to watch for in Cloud Play
•‘Red tape:’
– Security
– Regulatory compliance
– SLA
– Availability
– Cost vs. in-house
– Legacies, appetite for change
– Hostile software licensing regime
– Hype, risk aversion
•Power, ownership, control, job security

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Future Winners
• Providers that Understand their target audience
– Cloud Services to SMB’s, Enterprises, ISV’s, or SaaS?
• Ride the new wave of Virtualization solutions
– Migrations, business process automation, consuls
• Chose to be an IaaS
– Appropriate visibility, analytics, OS, storage, DR,
compute power, security, on demand billing,
• Or a Fully integrated Platform as a Service
– IaaS and: billing modules, app troubleshooting,
integration, ERP, Databases, XML files, flat files, web
services, API availability, load balancing, DNS
• Or niche specialists
– Mobile or VoIP platforms

41 Parallels – Optimized Computing TM

 Questions?

Antonio Piraino
[email protected]
www.tier1research.com

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