Cloud Computing

Of course, you know IT Outsourcing, no doubt about that – however,  have you ever felt  that -  the vision & scope to understand outsourcing could vary based on individual’s or organization’s experience, exposure and maturity in the field? Can we go beyond the traditional thought process around outsourcing to bring next level of innovation in this area?

In this series, I will focus on creating an illustrative business case & cost-benefit analysis for most common business scenarios through outplacing IT @ Cloud. A similar article authored by me, titled Lean IT Transformation has been published on ebizQ.net.

I will start with a Corporate Web Site business scenario, every corporate / organization has a public facing web site today. These websites are generally built using Content Management Solutions available in the market. The variants of this scenario are many – Intranet Portal, Employee Collaboration Portal, and so on – they use a similar technology solution platform.

I will do an illustrative cost-benefit analysis of on-premise Vs cloud based Vs SaaS based solution for such business scenarios.

What is the basis of our cost-benefit analysis?

I went through various internet resources to prepare the below cost-benefit analysis. I used

• Microsoft Online Services Cost Estimator
• Microsoft Online Services Customer Portal
• Microsoft Office SharePoint Server 2007 and Related Technologies pricing
• Microsoft Licensing Options for Large Organizations
• Microsoft SQL Server 2005 Pricing Sheet
• MOSS 2007 Hosting Services Price Sheet by fpweb.net 
• On-premise Vs Hosted Cost Illustration by fpweb.net
• Internet Bandwidth (Brushtable DS3) Pricing Sheet

For fair and practical comparison, we assumed 8 Server Farm Scenario for MOSS 2007 for Corporate Public Facing Web Site to support the user load. There are multiple other assumptions involved in the analysis - treat this as an illustration - It does not represent any specific real customer situation. I want to hide somwhere now to save myself from the brickbats.  The actual license cost of products will also depend on relationship with the vendor and the different types of licensing agreements and possible variants.

How does the number look like?

First, I don’t know if this is apple-to-apple comparison. The objective of the analysis is not to come-up with absolute or actual cost numbers but to see the relative range of savings realized in different solution approaches.

Uh! I need to learn online spreadsheets now

Take the numbers with a pinch of salt for now, and do your own detailed cost-benefit analysis in given customer context to get the real picture. Also, there are variants for on-premise solution using preferred hosting partners etc and the cost can be optimized to a certain degree. Additionally, we need to account for license renewal and hardware upgrade cost at regular interval – it is not included in the above analysis.

Also, I could not find the pricing for MS Online Hosted SharePoint for internet facing scenario, may be it is not supported or they would be providing pricing on request basis. The online cost estimator provides cost for the per user license, that can be used for intranet employee portal scenarios for cost benefit analysis. I am sure in near future Microsoft may provide comprehensive internet facing services and related pricing through Microsoft Online Hosted SharePoint.  

I am sure there are thousands of gaps in this business case / cost-benefit analysis – let us discuss the gaps, loop-holes and fixes to make it more concrete.

So…what do you conclude?

Obviously, for Year 1, the On-premise solution is much more costlier than hosted solution model, for Year 3 the cost gap is not substantial. Interestingly, for the Year 5 on-premise solution looks better, however when we add the license renewal cost and hardware upgrade cost, once again it will lose cost advantage.

Of course, there are well justified reasons for all the different types of solutions in given business situations and every solution has its own value and cost. Let us discuss the pros & cons of each solution, what are the strategies around when should we use what solution etc.

Also, we need to match business requirements and solution fitment, for e.g. MS Online Hosted SharePoint or Hosted MOSS solutions might have some compromises w.r.t on-premise solution, which is an important factor. Similarly, between Cloud based solution and Managed SaaS based solution offerings there is a degree of administration cost savings potential.

What Next?

Of course, this is our one of the business case in the series; we invite your thoughts, ideas, suggestions, corrections, comments or brickbats. Think about CRM and we might have our next business case around it, wait for it or subscribe this feed.

What is your business case, share with us? Also don’t forget to check Make Money @ Cloud series on this blog.

Posted by Bhavin Jayantilal Raichura at 04:19 AM | Permalink | Comments (5) | TrackBacks (0)

I am sure the cloud buzz has reached you by now, and why not, it is also approaching the peak of the Gartner Hype Cycle for emerging technologies. The buzz also can be confirmed with simple analytics using Google Trends where-in cloud computing is much ahead of grid computing and other technology buzz.

Are you wondering how you can make money from this buzz? Are you an individual, are you cloud infrastructure provider, are you cloud service provider, are you an ISV, are you system integrator, are you an Enterprise or are you Government? In this series of Make Money @ Cloud, I capture my ideas and your thoughts, which can help everyone to make money from the cloud buzz & reality.

Here is our idea # 1 - Service Exchange @ Cloud. Think of it as a platform, where-in Service Publishers and Service Subscribers can do business. The service publishers develop and publish their service on the exchange; the subscribers search for the relevant service, subscribe, consume and pay for it – simple.Yes, I agree - It is not new from the business idea perspective; there are several players such as Seekda!, webserviceX.NET etc.

I believe that the latest industry trends around Cloud Computing and SaaS has significant impact on the business model & its profitability.  Let us discuss how cloud computing changes the rules of the game and how each stakeholder can make money.

How cloud computing changes the rules of the game?

Fundamentally, cloud computing brings the following:

In context of Service Exchange @ Cloud the above makes a perfect sense - with this platform, now even an individual developer can develop a Web Service; publish it on Service Exchange and start running his own business without any major investments!

How each stakeholder can make money?

OK, now when I have setup the stage, you are interested in - how EVERY stakeholder can make money – right? Here are my thoughts and please feel free to correct, throw brickbats. 

Did not find it very readable? Let me summarize:

Did I miss you in the above table? Help me with your thoughts. I am sure; it has enough meat to start a debate now.

Sounds tempting? But bad news - hopefully not for longer

Hmm….go ahead and evaluate the offerings of many of the leading Cloud Infrastructure / Service providers for the feasibility of developing such a platform. No, don’t move away…may be….you did not like the home work in your school days also…

So here you go - I might not be fully correct, but what I feel is that – programmatically publishing the new services on cloud platform could be very challenging with the existing cloud APIs, in some cases it might not be feasible.

I am sure there are possible workarounds to this, what is your solution?

What Next?

Of course, this is our one of the idea in the series; we invite your thoughts, ideas, suggestions, corrections, comments or brickbats. Think about market trading and we might have our next idea around it, wait for it or subscribe this feed.

I hope I made it interesting if not very useful.  Start making money now, you got my 2 cents!

Posted by Bhavin Jayantilal Raichura at 10:36 AM | Permalink | Comments (5) | TrackBacks (0)

Enterprises need to do more with less than never before. Can Cloud computing address this?

Cloud Computing is getting embraced by small medium businesses and new biz start-ups.
 
Is the Cloud ready for the large enterprises too? There are business and technology challenges like losing control, not proven, security (data confidentiality) etc. for the cloud to down pour.

However, large enterprises can take a drizzle for select work loads and business need.

Cloud stack typically covers Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS).

Enterprise can consider using Infrastructure as a Service (IaaS) for the following work loads:

In a normal situation:
1) Enterprises need to invest for infrastructure peaks (High computing work loads for a short span)
2) There is a long lead time and high cost involved to set-up the IT infrastructure for any new markets / product launches. 
3) Due to additional cost most enterprises do not have good redundancy / fail over infrastructure. 

In all the above situation cloud computing provides better value proposition in terms of improved speed and flexibility at a lower cost to the enterprises.

It is the right time for enterprises to take a drizzle now!

Is your enterprise planning for a drizzle in the cloud?

Posted by Lakshmanan G at 07:50 AM | Permalink | Comments (3) | TrackBacks (0)