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Back-to-school shopping

If you haven't read the UC Berkeley RAD Systems Lab paper, "Above the Clouds," it's well worth the effort.

Written in a conversational rather than academic tone, it discusses the technical, line-of-business, financial and historical drivers of cloud computing. It also authoritatively defines cloud computing: software-as-a-service plus utility computing. SaaS providers can be utility computing customers. The other Whatever-aaS models are not included, nor are private clouds.

It also defines three economic engines of the cloud phenomenon. I list the first two just to be thorough. We'll be discussing the third:
  1. Pay-as-you-go. The authors use the term "fine-grained" to describe the micro level at which capex is moved into opex.
  2. Hardware deflation. Processing, storage and network horsepower all constantly decline in unit cost, but at different rates; cloud providers can benefit from the "float" and, maybe even pass them on to you, the consumer.
  3. Elasticity of average and peak utilization. This old conundrum -- how to provision enough computing power for crunch time without drastically overpaying for 300 days out of the year -- is a step closer to solution in the cloud.
This third point is, of course, most crucial to startups and to web-based businesses that might have to dial back down considerably after the novelty wears off. But I venture to say there isn't a CIO in the world who isn't concerned about capacity management.

The Berkeley authors provide an interesting example:

"Target, the nation's second largest retailer, uses [Amazon Web Services] for the Target.com website. While other retailers had sever performance problems and intermittent unavailability on 'Black Friday' (November 28), Target's and Amazon's sites were just slower by about 50%."

This is all the more amazing because Amazon's EC2 offering is essentially just virtualization in the cloud, according to this same paper. "An EC2 instance looks much like physical hardware, and users can control nearly the entire software stack, from the kernel upwards. This low level makes it inherently difficult for Amazon to offer automatic scalability and failover." They suggest Google's AppEngine platform for that purpose. One wonders what Target.com's results would have been if it resided at Google.

But what I'm wondering is, what will the results be on this coming Black Friday, and the Black Friday after that? There's a first-mover advantage here: The capacity was indeed available, albeit at a degraded level. We've all been hearing about the slow back-to-school retail season, and how stores are dreading an equally dismal holiday season. They're going to cut back on expenses, and that's going to make the cloud particularly attractive to them. Nobody has bigger seasonal capacity requirements than retailers. That means there will be more direct competitors in the mix. Cloud providers are also struggling with elasticity. Will they be willing to buy all the capacity they need for 30 Shopping Days 'Til Christmas, even if most of it lies fallow for the rest of the year?

I don't think so. Expect outages this year, overcapacity the following year, and outages again the year after that.

Think I'll actually get reacquainted with the mall.

Either that or start shopping now.

Have a better day,

Bill

Read the original blog entry...

More Stories By Rich Bruklis

A 20 year veteran of the storage industry, Rich has been a business leader in product marketing. He has seen the industry change from backup on 5.25" floppies to 10,000 cartridge tape libraries with every tape "standard" in between. Rich has supported 5.25" 30MB hard drives and launched disk arrays with hundreds of drives. Most recently, Rich has focused on business continuity and disaster recovery.

While the hardware industry continues to experience BBFC (Bigger, Better, Faster, Cheaper), there is a cloud on the horizon that is about to disrupt that trend. Cloud Computing will fundamentally change the IT world much like the network changed client-server computing.

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