Get Your Head in the Cloud

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Get Your Head in the Cloud@StevenRobertChief Information OfficerBillhighway.comA quick Cloud Computing Primer.1About MeSteven Robert | CIO Billhighway.comEntrepreneur & Technologist2009 Entrepreneur of Distinction & Michigan Top Executive ~ Corp! MagazineBillhighway:Metro-Detroits 101 Best & Brightest Companies to Work For (2010)Technology Innovation Award ~ Corp! Magazine (2010)Recognized as one of Michigans 50 Companies to Watch ~ Edward Lowe Foundation (2009)Awarded $1.1 Million Dollar Mega-Credit ~ Michigan Economic Development Corp. (2009)Hi, my name is Steve Robert & Im an entrepreneur.I was fortunate enough to join a startup when my risk tolerance was high and my mental health low.10 years later, weve built a sustainable, profitable business that employs 35 people and is growing @ 70% per year.Therefore, my perspective is that of a Small Business, and what I believe are the characteristics for enabling growth and opportunities the Cloud can provide.2Billhighway.com98% Domestic(increasing interest abroad)290,540 customers(and counting..)Transact ~$5M infinancial transactions PER DAY> $4 billion processed to date> 5M Pageviews/monthSustained 5-year annual growth of 70%Billhighway is a Quickbooks for Communities we serve due & fee-based organizations.Weve been growing > 70% per year. Were approaching 300k customersWeve been an early adopter of technology, leveraging many of the pillars of Cloud Computing; such as Service Oriented Architectures, Virtualization & Grid Computing with datacenters distributed across several geographic regions. 3Hell, there are no rules here,were trying to accomplish something~ Thomas EdisonI feel this quote adequately sets the stage for Cloud Computing as it means a lot of things to a lot of different people, and standards are yet fully baked.4Define: Cloud ComputingPlatform or service accessed over a network to provide advanced, often transparent functionality for mass consumption and high-availability.Seasonal or as-needed utilizationis a classic use case.Evolutionary:ASP -> SaaS/PaaS -> CloudThe word Cloud has created about as much debate as terms such as Web 2.0 or Social Media so depending on your audience, they can be as dangerous as discussing Politics, Religion and in Michigan Unions. Simply put, Cloud-computing offers resources accessed over a network paying only for what you use.ToastMasters:[Think of it as an application\service that doesnt run locally on your machine] MS refers to it as 3 Screens - The cloud has become an acronym for distributed services, or increasingly experiences - For example, you can access Facebook via your 1.) computer/browser; 2.) Smartphone; or 3.) multi-media devices such as xBox 360, iPad and soon TV. - When you update text or add a picture, its not stored on the device locally close your browser and its available on the phone, etc. all in the cloud5Generally Accepted CharacteristicsSelf-ServiceDelivered over the networkElastic scalability (grow as big as you need, pay as you go...)* Think of it as renting IT resources vs. buying.Here are a few generally accepted characteristics..In a nutshell, the conventional IT model front-loads capital spending on infrastructure, either buying capacity in advance or adding later at a higher costs and substantial business disruption.The Cloud on the other hand, enables new systems to be built/tested with minimal upfront investment resulting in systems that can be rapidly scaled to respond to improving conditions and business growth.6Some Challenges We FacedCustomer base growing exponentiallyLimited resources (budget, staff, & time)Compounding system complexityIncreasing scrutiny around financial integrity, compliance & regulationsSystem performance suffered Quickly, a few lessons we learned starting with the challenges we faced in 2004/2005. [insert picture of diagram?]Read, study, travel and consolidated practices by SUN (grid), Oracle (BPEL) & MS (XML & Service Broker.)At the time we were a Stage 1 business: StartupThousands of customers per weekHad to accomplish a lot in a short period of timeAccounting methods were difficult for developers to understand, lots of room for error too many decisions within our logicnTier architecture limited scalability7Solutions We FoundService Oriented Architecture (SOA)GRID Computing distributed computingService Broker asynchronous messagingRules Engine layers of abstractionVirtualization HA, DR & ScaleStorage Area Networks - iSCSIWe discovered the cloud out of necessity.2006 OIGEssentially, without realizing it, we rolled our own customized geographically disbursed private cloud each of the items listed here serve as fundamental tenants for many cloud initiatives.Lots of integrities, dashboards, scorecards & BIBy keeping our heads down, & flying under the radar we emerged at a market leader, with several patents and some unique service offerings that, now as a Stage 2 business, we had significant competitive differenciation.8Cloud -> Business TranslationConsider the cloud a technical utility. Understand your risk tolerance and current business stage to establish a threshold for use.Stages of a business*:Stage 1: Existence (Speed to Market)Stage 2: Survival (Competitive Differentiation)Stage 3: Growth (Core Competency)Stage 4: Take-Off (R&D)Stage 5: Maturity Other: Declining Conditions (Defense)*Five Stages of Small Business Growth ~ Harvard Business Review 1983Evaluating the cloud is different for everyone. As an executive or investor, weve found it helpful to correlate the business (or product) stage to establish a threshold for use.Heres where the rubber meets the road. Goals and/or opportunities for a startup are quite different than that of a mature business. Financial institutions specifically have hurdles of their own, which well touch on in a few moments.9Growth Phases*Five Stages of Small Business Growth ~ Harvard Business Review 1983Stage 1 Business or Incubator (startup) Growth through Creativity. May want to leverage quick iterations & potentially more volatile deployments (speeding your time to market.) - EXAMPLE: Consume third-party APIs, leveraging the open source community and reduce ground-up development time & cost.- Remain Agile. Fail Fast. Iterate.A Stage 2 Business is about Survival Growth through Direction. May consider business process outsourcing/scale & high availability- Consideration here may be to outsource non-core-competencies to industry; think: email, virtualization/storage/infrastructure- Determine what youre in the business of, and strategically outsource everything else. As a Stage 3 Business experiencing Expansion Growth often occurs through Delegation. Opportunities likely exist for product innovations, process efficiencies, increased productivity & potentially cost-savings- Here it might be time to consider Amazon Web Services or Google App Engine, if you havent already for pilot programs to quickly roll out product enhancements.As a Stage 4 Businesses begin to grow through coordination. A Maturing business may utilize the Cloud for strategic product management; maintaining today while building for tomorrow.- An EXAMPLE here may be an enterprise evaluating alternative platforms such as Windows Azure for green-field application development to compliment your XP & Scrum methodologies your teams are doing Agile right??A Stage 5 business grows through Collaboration. A consideration here may be through strategic partnerships, extending functionality or integrating with 3rd party communities such as Facebook, or Mobile app stores to continue perception of market leadership.And, often not discussed are businesses facing a Decline or challenging market conditions present opportunity for creativity & resourcefulness- Here its all about staying current, understanding what all the cool kids are doing, cherry-picking opportunity and making sure your brand isnt becoming MySpace.- Its important to remain current and relevant to your customers. What customer habits are shifting and how can you re-align yourself?10Technical FlavorsInfrastructure PlatformsApplication Development PlatformsBusiness App PlatformsSpecial Purpose/Social Platforms:Now, based upon your type of business, there are several variations of Cloud services you may look to consume. These can apply to any business, based upon your pain points or perceived opportunities. [Hosted] Email has emerged as an early winner, at least for Google & Microsoft.For example, a company looking to quickly scale their applications up may look to offset infrastructure needs such as storage, processing & bandwidth using services such as Amazon Web Services (EC2/S3)Another example may be a development shop looking for a one-stop solution for development & delivery whereas Google App Engine & MS Azure offer tools & APIs to build custom web applications from the ground up.On the other hand, if you have a product and want to gain more exposure, you might consider extending functionality into an existing vendor ecosystem, platforms such as but certainly not least are special purpose [application] platforms such as Facebook, Googles open-social and even the iPhone app store which present tremendous opportunity catered to specific environments. Mobile isnt going anywhere and people are now consuming products and services in very different ways then they used to. The internet space changes quickly, you should re-evaluate your strategy every 6-12 months.Example: Google. Lots of beta software, quick proof-of-concepts. Some stick, most dont. - Chrome & Android adoption are two examples that are both exploding! Why? Because they push product to the market in extremely short development cycles, where many of their competitors wait a year or more. They understand the marketplace opportunity and strike while the iron is hot.The underlying idea is, the easier it is to develop and deploy highly scalable web applications, the more innovative and creative solutions were going to start seeing. Were lowering the development bar and speeding time to market = REAL TIME WEB.11Who are the Providers?So, who are the Cloud Providers?Essentially, anybody with internet ground to loose (or gain.) This slide shows a small sampling.According to Gartner Research: Cloud Computing will be as influential as E-business - Thats a bold statement.Merrill Lynch analysts predict that by 2011 the volume of cloud computing market opportunity will amount to $160BN, including $95BN in business and productivity apps (e-mail, office, CRM, etc.) and $65BN in online advertising.12Spotlight: Financial InstitutionsMine masses of data for business valuePrivate vs. Public cloud offeringsIdeal future for infrastructure lifecycle upgradesMoSes Risk & Financial Modeling SoftwareAsset Price GeneratorMulti-Segment Corporate ModelingVariable Annuity HedgingLarge banks and financial institutions are sitting on masses of data that executives are eager to mine for business value. Many are turning to public cloud and private cloud technologies to free up this data from legacy IT systems, but the shift is challenging.While some financial giants have advanced into public cloud services like Amazon Web Services (AWS), that's mostly for simulations, experimentation and "safe" data. Regulatory and privacy concerns are paramount. The advent of private cloud technologies -- software platforms that turn pools of computing resources into metered, self-service and flexible services -- are catching on fast, and 2010 may mark the beginning of an overall trend in how large financial firms think about IT.Finding the value in cloud servicesIn some cases, public cloud services can look like an ideal future target for infrastructure lifecycle upgrades. The Hartford Financial Services Group sees a natural fit for its compute grid on AWS, using things like the distributed MoSes modeling software. Deustche Bank is experimenting with hybrid cloud -- computing and provisioning platforms that can span between a service like AWS and internal, private cloud-style infrastructure provisioning and management systems.Mats Andersson, CTO of Nasdaqs OMX Exchange, said Nasdaq uses cloud computing systems, but only inside the companys firewall and only to access historical market data. Exchange IT officials arent yet ready to trust the cloud with transactional data, he added. MoSes = financial modeling software- - Consider the Cloud?IT Budgets have not kept pace with growing business needsManaging data growth & extracting value = major challengesLack of scalability & capacityFirms are ill-equipped to handle infrastructure growth needsEnforced lack of agility + constrained budgetsBanks have already invested heavily in their grid and cluster computing environments and will continue to do so; cloud is just a continuation of that pattern."There is a much stronger focus on risk, both for compliance and to keep themselves solvent," said John Barr, financial sector analyst at the 451 group.Barr said he expected increased use of private cloud software within the industry, but vendors hopeful for a gold rush would be wise to watch their ambitions. Cloud is neat, and banks clearly need help with their IT demands, he said, "but whether there are big budgets for increased IT spendingthat isn't clear."14Sounds Great Right?Microsoft Azure - March 2009, ~22 hoursRackSpace - June 2009, ~ 24 January 2010, > 1 hourAmazon Numerous 2009-2010, ~ hours ea.Intuit June 2010, ~ 2 daysCloud PerfectTransparency is Key!So all this sounds great right? Heres a few things to consider..What is your tolerance for disruptions, if any? A question you may want to ask yourself is is being an early adopter or pioneer of more value than a reliable service? I think we know Twitters answer.Lastly, when households first bought light bulbs and signed up for electricity service from the utility, they still chose to keep some candles and matches around the house. With Cloud, common sense and basic risk management will determine how you protect cloud assets or if you go into the cloud at all. - Microsoft beta service = unexpected outage during beta period. low/acceptable impact- Rackspace = high impact, UPS/Generator failure, banks of racks went down. BUT, transparent and accountable tweet & blog the entire event! Competitors = 68k customers impacted, visibility of dependent on being up.Intuit entire online presence & main website impacted for almost 2 full days. Occurred again < 30 days later, for several hours.Amazon, service iteruptions & disasters. Jun 2009 = Lightening damaged power supplies to several racks, down ~ 5 hoursMay 2010 = 3 [unrelated] outages over 1 week; UPS failure, power distribution short-circuited (8 hours) & 2 days later, car struck utility pole cut off power to data center for 30+ minutes. 15Cloud TrajectoryEnhanced Virtualization (DR, HA & Security)Hybrid CloudsData Storage as a Service; PeeringNo SQL key-Value StoresIntelligent Workload Management (IWM)PaaS to integrate private/public cloudsTechnologies tend to take different routes:A linear trajectory, when the technology matures in sync with the adoption - VirtualizationA trajectory where the technology matures and then veers into the mainstream noSql, cloud storageA trajectory where the users force standardization and maturity in a technology Hybrid Clouds, PaaS, IWMNo SQL (Googles BigTable, Amazon Dynamo and Cassandra, used by Facebook ) These data stores may not require fixed table schemas, and usually avoid join operations and typically scale horizontally - am sure Amazon, Microsoft, Google, Rackspace, Savvis and others have implemented some form of IWM; but the algorithmics and programming models are not yet available as mainstream packages. I believe that this is a domain that will be driven by the users. Your Homework!PROsReduced costsResource sharing is more efficientManagement moves to cloud providerConsumption based costSpeed to marketDynamic allocationCONsCompliance/Regulation laws mandate on-site ownership of dataSecurity & PrivacyLatency & Bandwidth guaranteesAbsence of robust SLAsPortability & lock-inAvailability & reliabilitySo you need to do your homework. Green-field projects are one thing, while enterprises may opt to Maintain today, while building for tomorrow.There are significant PROs & CONs and only you can determine what is best for your business.Reduced costs & speed to market are certainly compelling.However; latency, SLAs and reliability are still concerns for many.With a little due-diligence, some strategic risk-taking, there is a tremendous opportunity to leverage the cloud to some capacity but youll ultimately have to decide for yourself. 17Thanks!Twitter: @stevenRobert this session helped raise some awareness around what the cloud is and what it can do for you. Remember to align your business/products stage & risk tolerance to the various cloud flavors and youll be able to cut through some of the noise.Thank you very much.18