The Cloud: What it Is, Isn't And What It Can/Can't Do For you!

Discussion in 'Business & Enterprise Computing' started by PabloEscobar, Jan 24, 2011.

  1. PabloEscobar

    PabloEscobar Member

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    Holy Thread De-railment Batman. The QLD DR thread has spun off into a feisty discussion on the Merits of the "Cloud"...

    Websters Dictionary Defines Cloud as

    Urban Dictionary differs on that point.

    Cloud:
    It's obvious that none of those aptly describe it. So in this thread, I pose the following questions.

    1/ What exactly is the "Cloud"?
    2/ How can It Help My Business?
    3/ What risks are involved?
    4/ What are the rewards?
    5/ Does it indeed, wear a massive sword on its back?

    Interested specifically in hearing from people that are using cloud based services, and in those that have done cost:benefit planning for a similar sort of migration.

    Thanks
    - PE
     
  2. ysu

    ysu Member

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    you're probably looking for "cloud computing"?
     
  3. itsmydamnation

    itsmydamnation Member

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    it allows the reduction of CAPEX to be replaced with OPEX apart from that i see very little in value compared to a well build VM enviroment except for small companies that dont have the scale to deploy a good VM enviroment.
     
  4. Daveo

    Daveo Member

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    I'm not using any official cloud, but I reckon I have a good understanding of it

    "The Cloud" is basically "the internet" and the idea is that you would store your information on a server somewhere on the internet

    The idea is then that no matter where you are you can access it as long as you have a PC and an internet connection, so you can store whatever you want and will be able to access it from anywhere.
     
  5. OP
    OP
    PabloEscobar

    PabloEscobar Member

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    I should have searched that, It would have made my first post more amusing..

     
  6. QuakeDude

    QuakeDude ooooh weeee ooooh

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  7. ra66it

    ra66it Member

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    Cloud computing is great for CEO and CFOs to save money and they get to use new and exciting buzzwords in their meetings.

    As far as IT goes, its trusting a 3rd party with your (confidential) data, praying that their services are 100% reliable, their backup procedures are working properly, and hoping your pipes to the cloud are hefty enough to cope.
     
  8. itsmydamnation

    itsmydamnation Member

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    a lot of the time it isn't cheaper, but it reduces CAPEX costs. yes its a great buzz word for CIO's. its funny how the networking cost side always seems to get ignored, especally if the databases are hosted internally but the front end is "cloud".
     
  9. OP
    OP
    PabloEscobar

    PabloEscobar Member

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    I've never really gotten the budgetary side of IT. It is easier to get approval for $200K opex, than it is for $100K capex.

    Can someone who is more across the financial side of business please explain why this is? (tax breaks?, Depreciation?... I have nfi).
     
  10. Iceman

    Iceman Member

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    More than that it simplifies IT (not totally, but to a large extent) to a "known cost for service" model, as opposed to a "department" which has all sorts of complexities and unknowns.

    Having said that, I still think that it's nothing more than a marketing / accounting buzzword for non technically competent people to replaces "off site managed services".

    Unless you're providing services worldwide, I believe the benefits, savings and ease of use for most businesses in Australia are greatly reduced due to;

    Our international bandwidth constraints (cost, speed and latency) and/or lack of major cloud provider in AU

    Our lack of network infrastructure (eg the NBN) and competition between the networks (eg my data to go from my Optus connection to my Telstra connection in the same room in BRisbane still need travel via Sydney.
     
  11. Iceman

    Iceman Member

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    That's probably a question for it's own thread, I'm not an accountant so I can't give you a full explanation but I can tell you that thinking of capex and opex is way too simplistic. Accounting for Clouds - is a good first step in trying to understand the CapEx vs OpEx concept.

    It varies on a business model. I've seen some businesses that utterly refuse to spend a dollar on "CapEx" and instead are more than happy to spend 5x that amount in "OpEx". Which is the age old "spend more maintaining it than it costs to replace" problem.

    And some would much rather purchase an item, bundle as much of the cost into the "CapEx" as possible (eg 3 years support) and have zero ongoing "OpEx". They probably also depreciate the support component when it's structured this way as opposed to the first method where they can't.

    It's all swings and roundabouts though. You can leverage CapEx assets in ways you can't for items that you lease. On the other hand while it might be nice to say you have 5 million dollars worth of servers, depreciation bites hard and so does insurance.
     
  12. AzzKikr

    AzzKikr Member

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    The Cloud is an overused, overhyped marketing buzzphrase, usually used by Microsoft and an OEM in some badly manufactured advertising.

    In response to the points raised by the OP:

    1/ What exactly is the "Cloud"?
    I interpret "the Cloud" as being to outsource internal services (be it email hosting, antispam, web filtering, or your complete network infrastructure) to an external third party company, which you then connect to (if required) via remote access technologies.

    2/ How can It Help My Business?
    Depends on the size of your business. At any level, I see benefit in hosting in "the Cloud" for antispam, web filtering, and other similar apps. For a SMB/SME, I see advantages in being able to use enterprise hardware and software without any of the upfront costs for licensing and infrastructure, along with the ability to spin up more capacity if required. However, at an enterprise level, I don't see much benefit for hosting in an 'external cloud' given that most large enterprises will be running their own 'private cloud' - or a bunch of centrally hosted VMs and storage infrastructure.

    3/ What risks are involved?
    "Hi Random Company, here's all my data and information, please ensure you keep it safe, secure, and all backed up for me kthx."

    Seriously - you're handing over your data to a third party company. With this, you hand over the responsibility to them to ensure that your data is secure, adequately backed up, available when you need it, and won't disappear in a puff of smoke when the hosting company goes belly up or relocates overnight to Guatemala.

    4/ What are the rewards?
    Pros: Less spend on hardware/licensing.
    Cons: Less need for internal IT Staff (full service cloud providers generally provide tech support), ongoing costs can be expensive, you generally need a fatter internet link to cope with all your infrastructure being external to your LAN - this also limits the usefulness of things like WAN Optimizers.

    5/ Does it indeed, wear a massive sword on its back?
    No, but it wears some cheap toy box over it's head.

    -A.
     
  13. QuakeDude

    QuakeDude ooooh weeee ooooh

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    Cheers - that's a really good article :thumbup:
     
  14. quade00

    quade00 Member

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    Cloud is more than just a buzz word. Yes it may have been around for a long time but it also opens up new pathways for organisations that may not have been accessible previously.

    Take the NY Times for example. They created a massive historical archive in 36 hours using Amazon Web Services. Utilising AWS it allowed the paper to process a ton of data (at a cost) but in a relatively short period of time. Doing it internally was either completely unfeasible due to time constraints, or prohibitively expensive due to hardware costs.

    Read a bit about what NY Times did here: http://open.blogs.nytimes.com/2008/05/21/the-new-york-times-archives-amazon-web-services-timesmachine/

    http://en.wikipedia.org/wiki/Hadoop

    Yes cloud might have become a bit of a buzzword but it is useful and a powerful tool under the right circumstances. For a small organisation, it makes a whole lot of sense to utilise Gmail at $50 per user per year than pay for an Exchange license and associated maintenance costs.

    Associated risks of where the data is stored is not a whole lot different to previous issues such as internal security breaches, unsecured servers, internal policies and procedures. Effectively cloud is about outsourcing risk. You are relying on someone else to manage a process or function for you. This is no real difference to Business Process Outsourcing or Outsourcing in general, which organisations have been doing for ages.

    Government with differing security requirements will take a while to leverage it but many federal Departments utilise their own "internal" clouds in any case.
     
  15. itsmydamnation

    itsmydamnation Member

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    while its a good post, cloud is still CAPEX vs OPEX, thanks to bean counters there are buckets of money, now we cant resize those buckets or move them around, oh no thats to much work for poor old bean counter. this is where the CAPEX vs OPEX part of the cloud comes into it as he said regardless of actual cash flow.

    i've had some of the oddest PO's generated before to meet the hard set you cant spend more then "blah" CAPEX before. its funny because at the end of the day it is all just money but its about those damn buckets.

    i guess the other thing is you only have to do the work once to get into an OPEX budget for the next 1 million years but with CAPEX its far more budgeting work when the next replacement rolls around.
     
  16. itsmydamnation

    itsmydamnation Member

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    dont out source the risk .... just out source the blame. in the office my manager always jokes that he/we should get into that industry. get up infront of senate estimates "it wasn't *insert government department*'s fault it was all mine, boy did i fuck up, I fucked so bad/etc". all for a small nominal fee :thumbup:
     
  17. ßundy

    ßundy Member

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    How is that a bad thing??


    I think some of the best examples of cloud based apps I have seen are things that have changing resource demands. Think about websites that get ordinary traffic most of the year, but occasionally once a month need 20-100x the capacity (i.e concert ticket vendors). Using a cloud service such as azure or amazon you can pay for 1 server 29 days a month, and 100 servers for 1 day when you need it.
    Sells itself, but granted its not for every business.
     
  18. JayKay777

    JayKay777 Member

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    And for multi-billion dollar fortune 500 companies with billions in the bank, yet have made redundant their entire internal IT and outsource to cheap contracted imported labour.

    Of course CAPEX is reduced - i.e. implementation costs are fixed, yet because you have sacked your internally IT knowledge, including project managers, no one is effectively scopes (with users), specs and runs the implementation. So you end with half arsed implementation because you have spent a fraction of CAPEX required for the job internally.

    CAPEX is also reduced when you sack desktop support in offices with 50 users, hoping the SaaS/cloud's supports will cover it. But unfortunately no, the cloud support guy cannot fix your companies internal stuffed up implementation and botched network.

    Cloud means CFOs can get their bonuses by consistently reduce internal service and saying "our cloud/contractors" meet SLA, when non one is actually monitoring the SLA. Meanwhile users wait 30 seconds to open 1 email/record/doc, which they need to do 100 times a day, so great work - your 10 000+ employees are wasting 1 hour a day each.

    /rant end :tongue:
     
  19. Phalanx

    Phalanx Member

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    Greater flexibility and meets demand better.

    The problem is that even with large companies, the demand doesn't often average all that well across the entire organisation.

    It's well highlighted by the NYT article. Maintaining the hardware for that one off project would have been silly, a complete waste. But fluctuations in demand do occur like that regularly. Cloud computing can effectively wipe out the costs of maintaining that peak demand situation.

    I think it'll become more and more common. Sure, a large organisation can and probably should internally do their day to day stuff, hosting your own exchange server is a no-brainer, but even large organisations have demand spikes and unpredictable growth. Major retailers need to build their websites to handle Christmas rushes, for example.

    Plus a lot of large companies aren't particularly centralised location-wise, so their staff will be connecting to a server somewhere anyway. Might as well be a well maintained one. Of course, that works on the assumption that rackspace/amazon/microsoft can offer a better service than you can provide yourself.
     
  20. oli

    oli Member

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