Cloud Data Centers and Cost Modeling

A Complete Guide To Planning, Designing and Building a Cloud Data Center

Caesar Wu, Rajkumar Buyya

• Publisher: Morgan Kaufmann
• Year: 2015
• ISBN:
  9780128016886
• Topic: Computer Science
• Subtopic: Computer Networking
• Index: Computer Science

Cloud Data Centers and Cost Modeling establishes a framework for strategic decision-makers to facilitate the development of cloud data centers. Just as building a house requires a clear understanding of the blueprints, architecture, and costs of the project; building a cloud-based data center requires similar knowledge. The authors take a theoretical and practical approach, starting with the key questions to help uncover needs and clarify project scope. They then demonstrate probability tools to test and support decisions, and provide processes that resolve key issues. After laying a foundation of cloud concepts and definitions, the book addresses data center creation, infrastructure development, cost modeling, and simulations in decision-making, each part building on the previous. In this way the authors bridge technology, management, and infrastructure as a service, in one complete guide to data centers that facilitates educated decision making.

• Explains how to balance cloud computing functionality with data center efficiency
• Covers key requirements for power management, cooling, server planning, virtualization, and storage management
• Describes advanced methods for modeling cloud computing cost including Real Option Theory and Monte Carlo Simulations
• Blends theoretical and practical discussions with insights for developers, consultants, and analysts considering data center development

Part I

Cloud Computing Foundations and Business Requirements

Outline

Part I. Cloud Computing Foundations and Business Requirements

Chapter 1 Cloud Computing

Chapter 2 Business Needs

Chapter 3 Identifying Business Problems: A Case Study

Part I. Cloud Computing Foundations and Business Requirements

Today “cloud computing” may be one of the most popular buzzwords in nearly every IT professional’s vocabulary, but not many people deeply understand the term. What are the differences between traditional computing and cloud computing? Why do we need cloud computing? What does it mean to my business? If the cloud is as good as many consulting firms claim, why do some companies still stick to traditional computing? How can I apply it to my business? How significant is it to my business? Why now?

All these questions will be answered in Part I of this book. It consists of three chapters. In the first chapter, we will first focus on the term “cloud computing” from three historic phases: build, buy, and lease. Before we unveil our definition of cloud computing, we will review four other types of computing that are closely related to cloud computing, namely grid, parallel, distributed, and utility computing. Then we will introduce some widely adopted terms, such as NIST’s cloud definition. In order to serve the purposes of this book, we define cloud computing using a functional definition. Of course, it doesn’t matter how we define the term “cloud computing,” the real purpose of our definition is to set up the groundwork for us to establish the cloud cost model or framework.

Why do we need a cost model of cloud computing? It is because we want the cloud to serve our business needs. In Chapter 2, we will describe how to define the business needs via three aspects (volume, variation, and variety) and how to implement a business analysis from a professional business analyst perspective. With respect to the five-phase process for business problem solving, we will only focus on the first three phases, namely problem definition, requirement gathering, and solution definition. In order to achieve the best problem solving results, we briefly discuss the topic of expectation management.

Chapter 3 puts the theory into practice. It contains a real business case of a leading telco company. In order to solve the real business problem of saving a significant amount on opex, we propose a cloud solution, which this book will unveil in all its details in other parts (II to V).

Chapter 1

Cloud Computing

The main topic of Chapter 1 is to define “cloud computing”. Throughout the definition, we will explain that the cloud is not a new information technology rather than the new business model that is shaped by three emerging technologies: virtualisation, multitenant and auto-orchestration.

In order to illustrate this proposition, we will review the history of different types of computing based on the chronologic order and show how these different types of computing related to the new term of cloud computing. From the evolution of computing, we can understand the ultimate goal or incentive of cloud computing is to drive the cost reduction or to increase utilization efficiency. The significance of cloud computing is for a business to gain a competitive advantage in a market place, whether you are a cloud service provider or a consumer. In term of cost reduction or cost saving, different people have different opinions. The gap different opinions for the cost saving is as wide as 644%. This leads to the topic of the 2nd Chapter. Why do we need the cloud?

Keywords

Cloud Computing; Capital expenditure; Operational expenditure; Functional Definition; Revenue; Emerging technology; Hyper-cycle; Chasm; Parallel computing; Distributed Computing; Grid Computing Utility Computing

This chapter aims at laying out the groundwork of cloud cost modeling. We will use a functional definition to define the term “cloud computing” to establish a cost framework for supporting strategic investment decision making.

The chapter will review the evolution of different computing paradigms and how they relate to cloud computing. From a business perspective, the ultimate goal of cloud computing is to drive cost reduction or to increase utilization and reduce provisioning time. The significance of cloud computing is for a business to gain a competitive edge in a marketplace.

In order to illustrate this significant point, we will first introduce some popular terms related to the cloud and then discuss four different types of traditional computing that are closely associated with the cloud. Finally, we will give our functional definition of cloud computing and describe the relationship between cloud and traditional types of computing.

1.1 Introduction

The time was late 2008. The world had just experienced the shock of the global financial crisis. One of the senior business directors of a large organization asked his IT (Information Technology) people to rationalize the cost for many IT services. These IT services were mainly dedicated to hosting, web contents, managing services, utility computing, data storage, and Ethernet network connectivity for many enterprise customers. The reason for this exercise was very simple—the sales revenue could not keep up with the pace of the capital expenditure (capex) and operation expenditure (opex) growth of IT infrastructure. From a business perspective, the profit margin was shrinking due to the growing IT expenditure. Unfortunately, when IT staff tried to identify some cost items for cost reduction, it appeared none of them could be eliminated. Does this sound familiar to you? If so, you are not alone.

1.1.1 Operation Cost Rationalization

Actually, this issue is quite common for many IT professionals of large enterprises and government agencies, which are constantly battling with this issue due to cost pressures. If we dive into the details, we can find a few fundamental issues behind this symptom:

• Although many IT cost items have no direct sales revenue contribution, they are an essential part of business because they are either critical to maintain the current business operation, such as data storage, corpor...