Application Independence

Another compelling reason to go with hosted infrastructure

When to make the jump to hosted services is a big decision with significant impact on the network, security, operations, etc.  It has vastly different stake  depending on who you ask.  The flexibility that it buys is undeniable. It is just a matter of time before all but the most sensitive of data sets make the migration.  

Enterprise vs SMB adoption

Corporate decision makers, faced with crucial stewardship obligations of customer data, and for that matter, crippling penalties if sensitive information is leaked, have been highly incented to work with a ‘secure the perimeter’ approach to their data centers.   Many are realizing though that the external access points are many and growing, and that the ‘perimeter’ is fast becoming less about the physical location of servers and storage and more about network design.

Informal consensus from the panel was that adoption by SMBs is happening much faster, and that large enterprise - particularly key healthcare and finance data applications, will remain in-house for a considerable time longer.      

That being said infrastructure consultants and service providers are working flat-out to address the high volume of new customer demand.

Quick review; Infrastructure as a service (IaaS) means that compute, storage and networking resources reside in a hosted facility, with the prime advantages of being able to expense the cost, purchase capacity on demand and deploy over distance.    Implemented the right way, the customer is given maximum flexibility to manage data and applications remotely.

Bonus of freeing apps from hardware

Halfway across the US, Infrastructure as a Service provider, PeakColo, is making a name for itself among the giants by providing some of the most advanced new solutions in cloud hosting and flexibility, including software defined network capability.  Their recent whitepaper along with insights from CEO, Luke Norris, on Wikibon’s The Cube at Brocade Tech Day in Sept., show the freeing options for end user decision makers that are already a reality, and exciting to consider.

On the hardware side, there are the usual named benefits of being able to buy growth capacity as needed and to have burst capability on hand, yet not incur the overhead cost of idle assets in the majority of off-peak conditions.  E.g billing cycles, annual reporting and tax time, or special testing environments.   It is not unlike what electric utilities have to plan for during the occasional heat-wave.

One less recognized, though possibly more far-reaching, benefit is the newly realized ability to update applications independent of the traditional 3-5 year hardware upgrade cycle.  Without having to plan around hardware, hosted customers can now focus on application lifecycle, which is much closer to the core of business operations.  

If a given customer’s applications will benefit from changes as frequent as 6 months, then there is now maximum flexibility to address.

Norris notes that by providing infrastructure and addressing a big portion of capital expenditure, the conversation among C-level decision makers becomes much more dynamic.  More leaders can engage and the business options are greater.   With infrastructure lead times no longer a gate, this now drives faster deployments to the benefit of all.

Latest and greatest solutions

And there’s more. Because of rapid growth and continuous addition of new capacity, PeakColo notes their opportunity to test and implement the newest in storage, servers and switching.   Their customers, in turn, are running at speeds, flexibility and efficiencies much sooner than most can implement on their own.   Most of us would agree that the available capital and resources to match this in-house is mostly found at the private data centers of large, but very conservative, financial houses.  

When it comes to deploying globally, there is again an advantage for SMB’s making inroads in ecommerce and other verticals where global reach and speed over distance are now more critical than ever before for businesses of this size.  IaaS providers with widely deployed services represent a new level of cost effectiveness.

As security steadily improves, access points become more widely deployed and costs come down, it is easy to see how even the most conservative of operations want to consider a move to hosted services.

Until next time, we’ll see you in the cloud…

 

Ray DeMeo

VP, BD for DCV Engineering

New news from Netflix and why you should give more serious consideration to IaaS

-          Adoption by large enterprise is a reinforcing message to SME users.  What it means to you, even if you’re not a $3.5B player.  

Posts this week by ZDnet and Computerworld profiled Netflix’s new announcement and the big bet that the video-on-demand provider is making.  Netflix is moving 95% of its corporate IT operations to Amazon Web Services and plans to ultimately make a 100% transition.  

The stated goal of Netflix’s new VP of IT operations is to have a higher level of focus for his IT staff, and not to be managing hardware.  This is significant because they are a $3.5B operation, and now fully dependent on hosted infrastructure.  It’s a big pocketbook vote of confidence for public cloud Infrastructure as a Service (IaaS).  

So what does this mean for the rest of us?

Well, it moves the needle on the bulk of current wisdom about what business types IaaS is best suited for. Until now, adoption has been weighted toward e-commerce and virtual data center (VDC) usage for small-to-medium enterprise (SME).  Easy, rapid deployment and low capital outlay can be a big advantage for a growing business with minimal prior IT investment.

Most prior analysis, including IDC in its first Magic Quadrant for IaaS, has concluded there is no clear cost advantage for enterprise businesses that have already deployed infrastructure internally.  The cost of data movement in and out of the cloud is largely unpredictable, and a good number of other variables that are unique to every situation, like power, facilities costs, maintenance, upgrades and related staff as just a few, are hard to nail down.

Lets hope for Netflix to publish their own cost analysis on private/public hosting in the same way that they have made public their Open Connect Content Delivery Network.  

Also, enterprise IT planners are more apt to notice, correctly, that component prices have dropped far faster than the cost of operating on AWS, and they expect that much more competitive pricing should be offered.  Maybe true.  But still, it is hard to put a price on speed and, back to those associated hidden costs, much of that is also the included benefit of a hosted service. 

Now, more analysts are calling out 2012 as the start of meaningful enterprise cloud adoption. 

Two points in bringing this up;   1. accessibility and 2. new growth.

On the accessibility front, market forces move faster with enterprise purchase power in the mix, resulting in a quicker drive to commoditization.  This brings a big benefit back to SME. More affordable pricing means faster deployment of ecommerce capability and remote offices, wider supply chain access and greater participation in the fast, flat global economy.  

And this is why moves like the one by Netflix help to drive new growth.  SME’s, with faster access to wider markets, are able to operate alongside larger competitors well before hitting the revenue of a $B+ enterprise.

New well-funded entrants like Nirvanix, with solutions to support hybrid cloud and migration from private to public environments, and Joyent, that focuses on transaction speed and scalability (to name only a couple in the interest of space here) are adding to the available options.

In our travels at DCV we are seeing hosting service providers spring up with a number of innovations.  Some offer lower and more predictable cost structures, like no charge for in/out data transfer, and many are providing personal relationship and support confidence that goes beyond contractual service level agreements. The trusted advisor value that comes from knowing a customer’s current challenges and future business goals means a lot when it gets into navigating this new and rapidly evolving space.

If you are a potential user of IaaS, do this: Shop for price and solution value among service providers.   Some of the best options may be from ones close by. If you are a systems integrator or solution provider with a devoted customer base and aspirations to be hosting provider, look at some of the great converged infrastructure modular cloud blocks now available, and don’t underestimate the value of your ability to serve your customer base at a much more personal level.

Until next time, we'll see you in the cloud