Honey, I Shrunk the IT CAPEX !
"Enterprises can save at least 10$ per GB per Year AND shrink 90% of their IT CAPEX by moving the storage infrastructure on cloud"
Does it sound like a science fiction movie? It’s not - read on.
Background
In my previous blog – How enterprises have benefited from the cloud? – I mentioned NASDAQ case-study that mentions the initial monthly bills received from Amazon were as low as $5. I was wondering how much cost-benefit NASDAQ would have gained by storing trading data on the Amazon S3? Also, I wanted create a re-usable ROI model to convert this research into a sophisticated solution offering OR SaaS service offering for system integrators.
I studied various infrastructure offerings and custom storage solution providers such as Amazon S3, ParaScale, Vembu StoreGrid, and Nivarnix. I also studied recent trends around social collaboration applications with offline document synchronization capabilities for e.g. Box, Google Gears and Microsoft Live Mesh and I am sure there are many more *drive.com offerings.
What is the outcome?
I got interesting data-points from Nivarnix competitive analysis. I summarized the case for storage-as- a-service as below – there are multiple enterprise scenarios that can leverage storage-as-as-service offering to avail the cost-benefits: for e.g. document management system, back-up & archival system, data warehouse or data-marts storage etc.
However, there are challenges in terms of security and data ownership where enterprise need further convincing.
What is in-the-store for each stakeholder?
I understand that there are primarily 4 key stakeholders: Customer, Plain Storage Infrastructure Provider, Storage Solution Provider and System Integrator. The customer saves large CAPEX and also optimizes service cost by leveraging pay-per-use pricing model from the service providers. It also helps customers to reduce time-to-market through on-demand storage provisioning.
The System Integrators can create new create a new revenue channel through ADM service offerings or solution (package) customization for storage-on-cloud. The System Integrators can also create a Solution or SaaS offering specific to domains and enable non-linear revenue growth. The Storage Solution Provider can partner with Systems Integrators for join go-to-market strategy and revenue sharing models to increase the adoption-rate and broaden market reach.
Comments
Interesting read. One question that's cropped up is last mile and bandwidth requirements. How is that calculated? What's your take on availability and investment (cost) from an enterprise perspective as well as from an ISP? Also, in the stakeholder matrix, where would you put the ISP?
Posted by: Deepak | June 15, 2009 02:54 PM
Let me try to address multiple points you raised:
a) Bandwidth calculations: You hit the nail on the head. You can find the calculation on my entry - http://www.infosysblogs.com/cloudcomputing/2009/06/whats_the_trap_we_say_it_is_pa.html
b) However, there is a trap: read Why Sony is evaluating a private storage cloud now? here - http://www.networkworld.com/supp/2009/ndc3/051809-cloud-pro-con.html
c) Take on investment: I summarized some of my thoughts in my latest blog entry - What's the trap - It is a paradigm-shift; enterprises will adopt it tomorrow, if not today; if they fail to adopt, they will be forced.
d) ISPs might be the early movers on the cloud, you would have already seen that happening. ISPs can become value-added resellers of cloud infrastructure services - just my thought.
Posted by: Bhavin Jayantilal Raichura | June 17, 2009 09:59 AM
Cloud storage is a good solution for start-ups and SMB's. It's still not mature for enterprise market due to performance issues (accessing large amount of data over WAN) and security issues.
At best cloud storage could be used as a data archival solution or disk based backup solution for enterprises. Here again if any PII or sensitive data is stored it creates more complexity & issues.
I don't expect cloud adoption in enterprises to take off until the interoperability between clouds (overall cloud computing not just cloud storage) is fixed and a comprehensive security solution is put in place for protecting sensitive data in multi-tenant platforms. While enterprise may see a good cost saving they still will not adopt it.
Posted by: Nandu Muralidharan | July 30, 2009 02:03 AM
Thank you Nandu for sharing your thoughts. I agree with most of your thoughts.
I wanted to add on performance concern you raised - it is perfectly valid point - performance, security & cost of bandwidth on cloud are very important factors to consider for cloud solution. The solution people are trying to adopt is private storage clouds related concerns.
You may find the Sony ImageWorks case study interesting, where-in they moved from public cloud to private storage cloud because of higher bandwidth cost:
http://www.networkworld.com/supp/2009/ndc3/051809-cloud-pro-con.html
Similarly, security is another important concern having storage on cloud.
Posted by: Bhavin Jayantilal Raichura | July 31, 2009 10:08 AM