Cloud Computing: Is it a Cost Saver? Thesis for Managing Information Organization – GCIS 546 Master of Science in Computer and Information Science Gannon University, Erie, PA
Batul Poonawala Email:
[email protected] December 11, 2009
1
Thesis Statement..................................................................................................................3 Abstract................................................................................................................................3 Introduction..........................................................................................................................3 Definition.............................................................................................................................4 Cost Analysis ......................................................................................................................5 Cloud Computing for startup companies.........................................................................6 Cloud Computing for scientific applications (Montage).................................................6 Cloud Computing for Decentralized Online Social Networks (OSN).............................7 Cloud computing for a lab environment..........................................................................8 Cloud Computing for Enterprise....................................................................................10 Key Issues of Cloud Computing........................................................................................11 Data Governance............................................................................................................11 Manageability................................................................................................................11 Monitoring.....................................................................................................................11 Reliability and Availability............................................................................................12 Conclusion.........................................................................................................................12 References..........................................................................................................................13
2
Thesis Statement My opinion is that cloud computing is no cost saver and it will ultimately lock users into expensive systems that compromise security.
Abstract On demand provisioning of scalable and reliable computing services which charges users based on the actual usage of services has been an objective of distributed computing since a long time. Cloud computing is an emerging technology which assures to fulfill this objective: provide on-demand computing services for applications and data, and a structure where consumers access these services on a payper-use basis. However, adoption of cloud computing in the enterprise world requires proving the business value of cloud computing to organizations. Since companies are in general always finding ways to gain competitive advantage and lower operational cost, the financial advantage of any computing services plays a major role in promoting the usage of the service. The main purpose of this paper is to explain the concept of cloud computing and compare the cost and benefits of this new paradigm with the conventional IT solutions and existing computing technologies.
Introduction As society advances, some services become basic necessities so that consumers need to have access to it whenever needed. In today’s day to day life, services such as gas, water, electricity are a necessity. These services are provided by certain service providers and consumers pay service providers based on the usage of these services. The 21st century vision of computing is to provide a computing service, like the present day utilities, which is readily available on demand (Buyya, 2009). These computing services need to be highly reliable, scalable, and self-sufficient. With technological advances in multi-core processors and networking, a large set of computing services have been proposed. These new paradigms include Cluster computing, Grid computing, P2P computing, Volunteer computing and most recently, Cloud computing (Buyya, 2009). Cloud computing assures a robust infrastructure and 3
reliable services through next-generation data centers built on compute and storage virtualization technologies. Consumers can access data from the “Cloud” anywhere in the world, at any time.
Definition In a CTO roundtable discussion at ACM, a panel of experts including CTO and CIO of various organizations were asked the very basic question about the new paradigm of cloud computing: “What is Cloud Computing?”. Each of their descriptions revealed a new realm of dimensions for cloud computing (Mell, 2009). Werner Vogels, CTO of Amazon.com – “It’s not just data. I also believe that clouds are a platform for general computation and/or services.” LEW TUCKER, CTO of cloud computing at Sun Microsystems – “Cloud computing is not so much a definition of a single term as a trend in service delivery taking place today. It’s the movement of application services onto the Internet and the increased use of the Internet to access a wide variety of services traditionally originating from within a company’s data center.” GREG BADROS, Senior engineering director at Google – “There are two parts to it. The first is about just getting the computation cycles outside of your walled garden and being able to avoid building data centers on your premises. But there’s a second aspect that is equally important. It is about the data being in the cloud and about the people living their lives up there in a way that facilitates both easy information exchange and easy data analysis.”
Apart from business executives, many computing researchers and practitioners have attempted to define cloud in various ways. Computer scientists at National Institute of Standards and Technology (NIST) have developed a draft definition of Cloud computing in collaboration with industry and government. The definition states: “Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage,
4
applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction (Creeger, 2009)”.
Cloud computing ensures to offer an on-demand computing service where consumers can rent infrastructure to deploy applications, store data and access the applications and data on a pay-per-use basis [2]. Cloud operators such as Amazon, Google and Microsoft, to name a few, offer such resources to users as they need them, when they need them and for as long as they need them. Amazon Web Services (AWS) offers computational and storage resources, which expand and contract in accordance with the needs. Google presents the App Engine, which provides a server for hosting web applications in the cloud. IBM too has declared plans for its cloud infrastructure, called “Blue Cloud (Hayes, 2008)”.
Cost Analysis Getting a complete inventory of costs of operational IT is very difficult as costs are hidden almost everywhere. Furthermore, IT is often responsible for mission-critical tasks that have nothing to do with using clouds as opposed to traditional IT service offerings. The paper evaluates cloud computing costs for various business and research scenarios by comparing the cost of computing on the cloud versus traditional IT computing infrastructures.
In this paper we shall consider the cost structure for Amazon Web Service. For our purposes we shall consider only 2 services provided by Amazon, namely, Amazon Elastic Cloud Compute (EC2) and Simple Storage Service (S3). EC2 provides a virtual computing environment where users can run their Linux-based applications. Consumers are charged for the time every instance of application is run in the virtual environment. S3 offers a data center where users are charged for each data transfer.
5
Cloud Computing for startup companies Cloud computing services can be employed by startup companies as a cost effective, scalable infrastructure. The primary business objective of startup companies is cost efficiency with the crucial problem of highly unexpected demands. The major costs for a start-up company are buying new servers, several overhead costs like shared utilities, security, backup power, etc. It is difficult to anticipate hardware demand and unanticipated hardware failures have a terrible impact on productivity. Furthermore, getting involved into server installation and other tasks is a big distraction in the plans for company growth. New companies thus require a greatly flexible development and deployment environment with high availability and scalability. One such case study is of Zoopla, a real estate / property website (Zoopla Case Study: Amazon Web Services). In building Zoopla, the team used Amazon EC2 and found a huge upside in responsiveness and flexibility by having the option of renting infrastructure which scales as per their needs.
Cloud Computing for scientific applications (Montage) Cloud based outsourcing may be useful for scientific applications, as it saves the cost of buying and maintaining costly computing infrastructure for short testing periods. Deelman, with a few others have studied the cost of running a real-life astronomy application, called “Montage” on Amazon cloud (Deelman, 2008). Montage provides science-grade mosaics of the sky to astronomers for study. The input to the application is an area of the sky whose mosaics are desired. A set of computations are performed on this image, and after a few intermediate images, the final output mosaic is obtained. Montage is a data-intensive application and the mosaics are of significant size requiring large storage capacity. However, computational tasks have a short runtime. For the cloud implementation of Montage, primarily all images from an input archive are stored on the cloud (Amazon S3). When a user requests for a mosaic through the Montage portal, the application generates a workflow to be executed either on local or on cloud resources. Computing resources are acquired on the cloud and the workflow is executed. At the end, the final output is transferred from the cloud to the portal.
6
Simulations were used to find the cost of using cloud for Montage. One of the questions addressed by the research was to calculate the cost of running sporadic computations on the cloud. It was found that as the number of processors is increased, the storage cost decreases but the computational cost increases, which in turn augments the total cost. Additionally, although Montage is data intensive, the storage costs were found to be negligible compared to the cost of transferring data. Thus, it appears that it may be beneficial to pre-store data in the cloud to reduce data transfer costs. However, storing large amount of Montage data on the cloud turns out to be around $1,800 per month with an additional cost of $1,200 for initial uploading of data on the cloud. It can turn out to be cost effective, if there are approximately 18,000 mosaic requests per month, which is a remote possibility. Thus, the research shows that the cloud is very effective in handling erratic overloads of mosaic requests and providing resources for all its computational requirements. Thus, in order to store data on the cloud, a proper calculation has to be done to see if it is better to store data on the cloud, or is it economical to only use the computational resources of the cloud. If data is stored for a long time with very less access to that data, then it may turn out to be more expensive.
Cloud Computing for Decentralized Online Social Networks (OSN) OSNs like Facebook have gained enormous popularity and thus have large amount of personal user data. Due to privacy concerns, recent work has proposed the idea of decentralized OSNs. Researchers have explored cloud computing as one of the architectural alternatives for decentralized OSNs (Shakimov, 2009). This approach to cloud-based decentralization is termed as Vis-à-vis. In Vis-à-vis each user’s data is stored in a personal virtual machine instance called a Virtual Individual Server (VIS). Each VIS is structured into overlay networks and just like a person can belong to various groups, one VIS can belong to multiple overlay networks. VISs are run in a cloud like Amazon EC2 (Amazon Elastic Compute Cloud). Experimental results show that Vis-à-vis is a viable alternative for OSN. However, the latency of common OSN operations grows slowly with the size of the OSN group. Also, the memory required by each VIS grows with the size and number of OSN groups to which the VIS user 7
belongs. The main drawback of Vis-à-Vis is its cost. At the moment, Amazon EC2 charges ten cents per hour for a default virtual machine with 1.7 GB of memory, 1 virtual core, and 160 GB of persistent storage. Data-transfer fees vary depending on the location of the machines with which the virtual machine is communicating. Even without network-usage fees, running a virtual machine for one month costs close to US$75 per month. Cloud computing thus provides high availability at the cost of additional expenditure.
Cloud computing for a lab environment A blog (Cost of cloud computing, expensive, 2009) on the internet was focused on determining the cost of moving a lab environment to a cloud environment to find it’s cost effectiveness. The author demonstrated the cost of hosting the lab environment in Amazon’s EC2 and S3 (Amazon Simple Storage Service) and comparing it with the cost of having it in house. Amazon EC2 Costs for 300 lab instances are as shown below. There are 744 hours in a typical month (24*31). Instance Type
Num
Windows 100 Windows + SQL Server 50 Linux 150 Windows (SQL/xlarge) 2
Cost/Instance Hour $0.125 $1.100 $0.100 $2.400 Total Cost Per Month
Storage 5.6T (usable) I/O Network I/O
30B
$0.10 Gb/month $0.10 per 1MM I/Os
20 Gb $0.10 Gb/month Total EC2 Cost/Month Total EC2
Compute Cost/Month $9,300 $40,920 $11,160 $3,571.20 $64,951.20 Storage Cost/Month $573.44 $300.00 Network Cost/Month $2.00 $64,826.64 $789,919.68 8
Cost/Year On the other hand the actual lab costs were: Gear Dell 1950 Dell 2950 HP DL585 10TB iSCSI Dell/HP/Equallogic Support HVAC/Power Floor Space VMware ESX Annual Support
Number 28 2 2 1
Cost Per Month
$10,000 $300
500 sq/ft 9
$24 sq/ft/year
$1,000 $1,000 $1,250 $1,250
(VMware) Internet Network
$1,200 $556
Infrastructure Total Infrastructure
$16,556
Cost/Month Software Cost SQL Server 2008 Oracle 10g/11g Labor Cost/Month Total In-House Cost/Month Total In-House Annual Cost
$2,083 $2,083 $4,166 $24,888.89 $298,666.67
The author further states that even by summing the head count for network and compute infrastructure, the difference between in house and EC2 is ($789,919.68 – $298,666.67) = $491,253.01. This is a reasonable difference for a system that is always on.
9
Cloud Computing for Enterprise For a service to be accepted by the enterprise, it must move from early adopter phase to early majority. The proof that a technology has reached this stage comes from a big number of enterprises using the service for business-critical purposes. Forrester and his research team could not find enough enterprises using Cloud Computing to prove that it has matured to the point of IT consideration and crossed from early adopter to early majority yet (Staten, 2008). Of most companies deploying cloud computing, the enterprises are using Cloud computing only for research and experimentation. This shows that although enterprise is trying to dip their toes into the cloud, they have not been completely satisfied of its capabilities and hence not ready to move critical applications to the cloud. Since not many enterprises have tried cloud computing as of now, it is difficult to prove cost effectiveness of cloud computing due to unavailability of enterprise statistics. By the research carried out in this paper, and the cost calculations of various organizations listed above, I believe that cloud computing might not be cost effective for large organizations. To support my belief, I use the Montage example and the fact that Amazon S3 charges users for every GB of data stored in their storage, and upload and download of data each time. Since organizations have huge quantities of data, cloud computing will turn out to be costlier if this data is not accessed frequently. Additionally, enterprises have well managed data centers, which are operating at good economic scales. Thus, enterprises do not have significant cost advantages related to initial capital investments. Another issue is the software complexity and cost to migrate data from an enterprise application to the cloud. While migration is a one-time task, it requires significant effort and needs to be considered as an important factor in deciding to move to the cloud. McKinsey and Company carried out a research of replacing a large enterprise computing operation with rented space on an external cloud. His analysis shows that cloud computing would be more expensive than the in-house datacenters.
10
Key Issues of Cloud Computing Apart from cost, there are many factors that need to be considered while adopting cloud computing at the enterprise level. At a workshop held at the Center for Information Technology Policy at Princeton University, a major subject of discussion was the questions about cloud computing privacy, security, and reliability (Zoopla Case Study: Amazon Web Services). Data Governance Enterprises have tons of sensitive data which needs access for monitoring and protection. As stated in an article (Zhen, 2008) “Data is the life blood of many enterprises, the loss of control will not be acceptable.” In addition to privacy, enterprises have to meet certain compatibility issues when dealing with important data. By moving data to the cloud, enterprises will lose the ability to govern their own data. Handing over sensitive information to third-party services, raises questions about access and ownership like: What would happen to your data if you fail to pay the bill? If you decide to move to another cloud provider, can you take your data with you? Does the service provider have the right to access any part of your data? (Hayes, 2008).
Manageability As discussed earlier in the paper, cloud computing is still in it’s infancy stages. Just like any other technology, cloud currently provides just raw infrastructure and platform. It still has to mature to provide additional manageability capabilities. As an example, when Amazon EC2 claims that it is scalable, it merely means that it has the potential to be scalable. It does not automatically scale applications when load on the servers increases. It is the responsibility of the developers to handle this scalability.
Monitoring CPU and memory usage are not the only contributors to monitoring of a service. The real measurement is the amount of time taken for a transaction to complete (latency). As stated in High Availability’s article on latency: 11
“Amazon found every 100ms of latency cost them 1% in sales. Google found an extra .5 seconds in search page generation time dropped traffic by 20%. A broker could lose $4 million in revenues per millisecond if their electronic trading platform is 5 milliseconds behind the competition.”
Reliability and Availability JohnsonDiversey, maker of commercial cleaning products adopted Google Apps Engine for an e-mail upgrade. The CIO of the company mentioned that 99.9% uptime guarantee of Google results in 43 minutes down-time a month (Weier, 2009). Although it was acceptable to JohnsonDiversey, it cannot be tolerable for crucial business services. Furthermore, there are almost no Service Level Agreements (SLAs) provided by the cloud providers today (Zhen, 2008). Even Jeff Barr from Amazon said that SLAs are provided only for their S3 service. For any enterprise to have faith in a new service, contracts need to clearly define SLAs.
Conclusion Cloud Computing definitely offers a new business model for computing and storage. The long dreamed vision of computing as a utility is finally emerging. The main users of cloud computing today are small companies and startups which do not have legacy management issues. The elasticity of the cloud matches the need of small businesses to expand at a much faster rate. The process of growing which took years earlier, can now be done within months. As appealing as the concept of cloud computing sounds, it is still very new and hard for traditional IT to trust. Majority of enterprises use cloud today for innovation and experimentation. Some efforts of deploying web-based collaboration services and low priority business applications on the cloud have been identified. However, enterprises already have economic data centers running at scale, and transitioning all data to the cloud may prove to be more expensive than traditional IT infrastructure. Additionally, cloud computing needs to solve questions regarding privacy, security, reliability and 12
availability to be largely accepted by enterprises. Cloud computing must meet enterprise standards and provide the capability to be monitored and controlled by IT.
References 1. P Mell, T Grance. (2009). The NIST Definition of Cloud Computing. Retrieved Oct 27, 2009, from NIST: http://csrc.nist.gov/groups/SNS/cloudcomputing/cloud-def-v15.doc 2. M Creeger. (June 2009). CTO Roundtable: Cloud Computing. ACM, New York, NY, USA. http://delivery.acm.org/10.1145/1560000/1551646/p1ctoroundtable.pdf? key1=1551646&key2=5076956521&coll=ACM&dl=ACM&CFID=59726704&C FTOKEN=30390835 3. R Buyya, CS Yeo, and S Venugopal. (2009). Market-Oriented Cloud Computing: Vision, Hype, and Reality for Delivering IT Services as Computing Utilities. Future Generation Computer Systems 4. B Hayes. (2008). Cloud Computing. Communications of the ACM
13
5. Retrieved from Amazon Elastic Compute Cloud (EC2): http://aws.amazon.com/ec2/ 6. Retrieved from Amazon Simple Storage Service (S3): http://aws.amazon.com/s3/ 7. E Deelman, G Singh, M Livny, B Berriman, and J Good. (2008). The Cost of Doing Science on the Cloud: The Montage Example. IEEE Press, Piscataway, NJ, USA http://delivery.acm.org/10.1145/1420000/1413421/a50-deelman.pdf? key1=1413421&key2=8944159521&coll=GUIDE&dl=GUIDE&CFID=6557692 5&CFTOKEN=36754616 8. A Shakimov, A Varshavsky, LP Cox and R Cacerus (2009). Privacy, Cost, and Availability Tradeoffs in Decentralized OSNs. ACM, New York, NY, USA. http://delivery.acm.org/10.1145/1600000/1592669/p13-shakimov.pdf? key1=1592669&key2=6244159521&coll=GUIDE&dl=GUIDE&CFID=6557670 1&CFTOKEN=90216934 9. Retrieved Nov 29, 2009, from Zoopla Case Study: Amazon Web Services: http://aws.amazon.com/solutions/case-studies/zoopla/ 10. Retrieved Jan 2009 from Cost of cloud computing, expensive!: http://www.uptimesoftware.com/uptimeblog/cloud-virtualization/cost-of-cloudcomputing-expensive/ 11. MH Weier, JN Hoover (2009). Alternative IT. Information Week, ABI/INFORM Global 12. J Staten (2008). Is Cloud Computing Ready for the Enterprise?, Infrastructure and Operations Professionals, Forrester. 13. J Zhen (2008). Five Key Challenges of Enterprise Cloud Computing. Cloud Computing Journal. Retrieved Dec 11, 2009 from, http://cloudcomputing.syscon.com/node/659288
14
