Table Of ContentCloud
Computing
Strategies
Dimitris N. Chorafas
CRC Press
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Library of Congress Cataloging‑in‑Publication Data
Chorafas, Dimitris N.
Cloud computing strategies / Dimitris N. Chorafas.
p. cm.
Includes bibliographical references (p. ) and index.
ISBN 978-1-4398-3453-4 (hardcover)
1. Web services. 2. Cloud computing. I. Title.
TK5105.88813.C492 2011
006.7’6--dc22 2010018872
Visit the Taylor & Francis Web site at
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Contents
Foreword ........................................................................................................ix
About the Author ........................................................................................xiii
SeCtIon I Cloud teChnology and ItS uSer
CommunIty
1 The Cloud Computing Market ...............................................................3
1.1 For and against Cloud Computing ....................................................3
1.2 OnDemand vs. OnPremises IT .........................................................6
1.3 The Four Pillars of Cloud Computing .............................................10
1.4 A Bird’s-Eye View of Cloud Computing Vendors ............................14
1.5 A New Industry Is Being Born ........................................................18
1.6 Competition in the Cloud Is Asymmetric .......................................22
1.7 The Multi-Billion-Dollar Opportunity: Internet Advertising ..........25
2 What Cloud Computing Has to Offer ..................................................29
2.1 Public Clouds, Private Clouds, and Clients .....................................29
2.2 Cloud Applications and Platforms ...................................................33
2.3 Providing the Cloud Infrastructure .................................................36
2.4 Cloud Computing, Spectral Efficiency, Sensors, and
Perspiration.....................................................................................40
2.5 The Technology of Enabling Services .............................................44
2.6 At the Core of the Cloud Is Virtualization ......................................48
2.7 Strategic Products and Tactical Products .........................................52
3 Strategic Inflection Points ....................................................................57
3.1 Strategic Inflection Points in Information Technology ....................57
3.2 Cloud Computing and Its Slogans ...................................................62
3.3 User-Centered Solutions and Cloud Computing ............................66
3.4 For Cloud Vendors an Inflection Point Is Risk and
Opportunity ....................................................................................70
v
vi ◾ Contents
3.5 Cost Is One of the Dragons .............................................................74
3.6 The Problems of Opaque Pricing .....................................................78
3.7 Salesforce.com: A Case Study on Pricing onDemand Services .........81
4 User Organizations of Cloud Computing ............................................85
4.1 Potential Customers of Cloud Technology ......................................85
4.2 The Cloud Interests Small and Medium Enterprises ........................88
4.3 Virtual Companies and the Cloud ...................................................92
4.4 Virtual Networked Objects .............................................................95
4.5 Consumer Technologies and the Cloud ...........................................99
4.6 Social Networks and Multimedia Messaging .................................103
SeCtIon II What uSer organIzatIonS Should KnoW
5 Threats and Opportunities with Cloud Computing ...........................109
5.1 The Computer Culture as We Know It Today May Disappear ......109
5.2 The CIO’s Career Is at Stake ..........................................................112
5.3 Centralization May Be a Foe, Not a Friend ...................................116
5.4 Budgeting for Cloud Computing ...................................................119
5.5 Outsourcing, Infrastructural Interdependencies, and the Cloud ....122
5.6 Service Level Agreements ..............................................................125
5.7 Is Cloud Computing a Lock-In Worse than Mainframes? .............128
6 Reengineering the User Organization ................................................133
6.1 Strategic Objectives and Reengineering .........................................133
6.2 Organizational Solutions Are No Sacred Cows..............................137
6.3 The Number One Asset Is Human Resources at the CIO Level ....140
6.4 Promoting Greater Productivity through Reorganization ..............144
6.5 The Transition from Legacy to Competitive Systems .....................148
6.6 Avoiding the Medieval EDP Mentality ..........................................151
SeCtIon III any-to-any PublIC and PrIvate CloudS
7 Inside the Cloud of the Competitors ..................................................159
7.1 The Controllability of Computer Applications...............................159
7.2 Platforms Rising: Google Tries to Be a Frontrunner ......................162
7.3 Salesforce.com and Its Force ..........................................................164
7.4 Microsoft Is Now on the Defensive ...............................................167
7.5 Amazon.com Leverages Its Infrastructure .....................................170
7.6 EMC, VMWare, and Virtual Arrays of Inexpensive Disks ............173
7.7 Wares of Other Cloud Challengers ................................................175
8 The Saga of an Open Architecture ......................................................181
8.1 Searching for an Open Architecture ..............................................181
Contents ◾ vii
8.2 Challenges Posed by Big Systems ...................................................185
8.3 Infrastructure as a Utility ..............................................................188
8.4 The Cloud’s System Architecture and Its Primitives.......................191
8.5 The User Organization’s Business Architecture ..............................194
8.6 Financial Services Applications Architecture: A Case Study ..........198
8.7 The Architect’s Job: Elegance, Simplicity, and Integration .............201
9 Internet Cloud Security ......................................................................205
9.1 Who Owns Whose Information on the Cloud? .............................205
9.2 When Responsibility for Security Takes a Leave, Accountability
Goes Along ...................................................................................208
9.3 Data Fill the Air and Many Parties Are Listening ..........................211
9.4 Many of the Cloud’s Security Problems Date Back to the
Internet ..........................................................................................214
9.5 Security as a Service by Cloud Providers ........................................218
9.6 Fraud Theory and Intellectual Property ........................................220
9.7 A Brief Review of Security Measures and Their Weaknesses ..........223
9.8 Security Engineering: Outwitting the Adversary ..........................226
10 Cloud Reliability, Fault Tolerance, and Response Time ....................231
10.1 Business Continuity Management in the Cloud ............................231
10.2 System Reliability, Human Factors, and Cloud Computing .........234
10.3 Case Studies on Designing for Reliability ......................................237
10.4 The Concept of Fault Tolerance in Cloud Computing ...................241
10.5 With the Cloud, Response Time Is More Important than Ever
Before ...........................................................................................244
10.6 Improving the Availability of Cloud Services ................................246
10.7 The Premium for Life Cycle Maintainability .................................250
SeCtIon Iv CaSe StudIeS on Cloud ComPutIng
aPPlICatIonS
11 Open-Source Software and onDemand Services ................................255
11.1 The Advent of Open-Source Software ...........................................255
11.2 An Era of Partnerships in onDemand Software .............................258
11.3 Frameworks, Platforms, and the New Programming Culture ........261
11.4 Finding Better Ways to Build IT Services .....................................264
11.5 The Case of Software Dependability .............................................268
11.6 Auditing the Conversion to Software as a Service ..........................271
11.7 Software Piracy Might Enlarge the Open Source’s Footprint ........274
12 Leadership in Logistics.......................................................................277
12.1 Logistics Defined ...........................................................................277
12.2 Customer Relationship Management............................................280
viii ◾ Contents
12.3 Enterprise Resource Planning ........................................................283
12.4 Wal-Mart: A Case Study in Supply Chain Management ..............286
12.5 Just-in-Time Inventories ................................................................289
12.6 Machine-to-Machine and RFID Communications .......................294
12.7 Challenges Presented by Organization and Commercial Vision ....296
13 High Technology for Private Banking and Asset Management .........301
13.1 Cloud Software for Private Banking ..............................................301
13.2 Leadership Is Based on Fundamentals ..........................................304
13.3 Cloud Software for Asset Management ........................................308
13.4 Cloud Technology Can Improve Fund Management .....................311
13.5 Criteria of Success in Asset Management Technology ...................313
13.6 Functionality Specifics Prized by the Experts ................................316
13.7 Institutional Investors, High Net-Worth Individuals, and the
Cloud ............................................................................................320
Epilog: Technology’s Limit .........................................................................325
Index ...........................................................................................................335
I
Cloud
teChnology
and ItS uSer
CommunIty
Chapter 1
the Cloud Computing
market
1.1 For and against Cloud Computing
No two people will completely agree on what is and is not cloud computing* or even
on the origin of the term. To some the concept looks too general, the domain too
broad and too dependent on the Internet, and the competitors too diverse in their
business background and even more so in their size.† Not all of the people express-
ing such reservations are the cloud’s critics.
For the pros cloud computing is the solution, the borderless information utility
they have always wanted. To their judgment it will enable companies to cast away
their legacy core systems that are technologically outdated and are restricting the
development of business opportunities—and therefore of profits.
Not everybody, of course, agrees with the statement that existing core systems
do not have the flexibility needed to meet organizational requirements as well as
customer needs and expectations. Many chief information officers (CIOs) like their
legacy systems so much that they already plan to duplicate them in a cloud, and
some vendors are ready to oblige.
In this environment, much more than just novelty is at stake, particularly so
when the experts’ opinions do not converge. There is no general agreement even on
* Defined in terms of its component parts and services in Section 1.3.
† A snapshot of cloud vendors is given in Section 1.4 and details on their wares in Chapter 6.
3
4 ◾ Cloud Computing Strategies
the origin of the label cloud computing. An often heard argument is that it sprung
from the graphical presentation of a cloud frequently used in reference to the
Internet. But it is also true that the term cloud came into use nearly two decades
ago, in the early 1990s, in identifying large ATM networks.
The roots of cloud computing’s functionality are also open to debate. According
to one definition, which is not generally accepted, it should be found in advances
in grid computing, used for scientific calculations. The term grid computing evolved
in connection to shared high-performance computing facilities, which have been
multitenant. Database clustering for multiple users from different firms has been
instrumental in evolving features like dynamic resources scheduling and load bal-
ancing, which:
◾ increased resource utilization, and
◾ eventually led to the cloud computing concept.
These advances have enabled information technology providers to use rela-
tively low-cost commodity servers to wring out computing and data storage power.
Moreover, the combination of commodity software and easy online access allowed
user organizations to pool and allocate programming resources onDemand, rather
than dedicating stacks of onPremises software to specific tasks, the old legacy way.
Etymologically, the terms onDemand and onPremises can be used not only for
software and different types of services but also for infrastructure. It has been a
deliberate choice in this text to employ these two words strictly in connection to
programming products on the cloud, as the developing general practice warrants,
but the terms are much more generic and can apply to all four pillars of the cloud
discussed in Section 1.3, namely:
◾ applications,
◾ platforms,
◾ infrastructure, and
◾ enabling services.
The pros say that the wide possibilities these four component parts offer can
best be exploited by companies with a record of innovation. Laggards don’t need
to apply. Some critics answer that while onDemand applications may offer distinct
advantages compared to onPremises, onDemand infrastructural facilities encom-
pass risks and can bring the user organization to the bleeding edge.
Security and reliability are two leading reasons behind this statement. Loss of
control over the basic infrastructure is a third factor. Still, for companies searching
to reposition themselves into a changing information technology environment, the
aforementioned distinction between onDemand and onPremises provides a fast
and dirty definition of the cloud (we will see more polished definitions in Sections
1.2 and 1.3):
The Cloud Computing Market ◾ 5
◾ Cloud computing is onDemand, and this is true of applications, platforms,
infrastructure, and enabling services.
◾ By contrast, the information technology facilities that we have known so far,
from mainframes to minis, PCs, and client-servers, have been onPremises.
The reader should be aware that around cloud computing revolve some terms that,
to say the least, are misleading. A case in point is ecosystem. This word is inappropriate
in the Internet context because with computers and communications there is nothing
“ecological,” as we will see later. Therefore, ecosystem is a misnomer and it will not be
used in the context of this book, even if ecology is a popular word these days.
Gone is the time when the motto “communicate, don’t commute” made the
headlines. Ecology and IT don’t go hand in hand. If anything closely associates
itself with cloud computing, it is the technical requirements cloud computing
poses, which are far from heralding environmental protection. Data centers con-
taining the cloud cannot be built just anywhere. They need:
◾ dry air,
◾ chilly climate,
◾ cheap power,
◾ fiber optic cables,
◾ high security, and
◾ right political conditions.
Neither are privacy and cloud computing good bedfellows. Personal informa-
tion will be everywhere, and online crooks can easily jump jurisdictions. This is the
alter ego of the fact that cloud computing is a borderless utility. Theoretically, it
does not matter where your data and programs are stored.
Practically, geography matters a great deal. Good sites are scarce, and secure
good sites are even more rare. Cloud environments must be controlled, which con-
sumes a great deal of energy, and nobody will ever underwrite an insurance policy
that no hacker will infiltrate the distributed database (hackers are people who like
to tinker with technology).
There is as well a paradox that cloud computing inherited from the Internet. The
services the Internet provided are now widespread, but classical concepts about pric-
ing them did not hold water. Companies active on the Internet have come to appreci-
ate that it is not only an equalizer but also an opportunity to get something for free.
◾ As an equalizer, it makes it difficult to distinguish one’s product from the next.
◾ By offering some services free of cost, it creates the challenge of how to make
money to continue being active.
Hence the need to find out what one can do that one’s competitors cannot, bet-
ting on that difference or alternatively capitalizing on other people’s inefficiencies.
