Welcome!

SDN Journal Authors: Pat Romanski, Destiny Bertucci, Liz McMillan, Elizabeth White, Amitabh Sinha

Related Topics: @CloudExpo, Microservices Expo, Agile Computing, Cloud Security, @DXWorldExpo, SDN Journal

@CloudExpo: Article

Don't Budget for Cloud

Understand the business problem and focus on the appropriate solution. Don't budget for a buzzword.

We know we want it, so Cloud must be a thing, right? If we’re carrying our enterprise IT shopping basket around, we know we want to stop at the Cloud shelf. Once there, we might select a nice fresh IaaS or perhaps some of this SaaS or that. And whatever our selection, we’ll pay the bill at the register. Good thing we brought our shopping list, and with it, our budget for Cloud, right?

Such is what the Cloud marketing machines at the various vendors and service providers want you to believe. Need Cloud, budget for Cloud, pay for Cloud. Cloud is a thing, after all, and we all want that thing.

Not so fast. Cloud isn’t a thing at all. It’s in reality dozens of different things: compute, storage, network, database, development platform, business applications, and more. The value these offerings provide is similarly varied: pay for automated self-service, pay for elasticity, pay for managed services, and so forth.

But if the problem with budgeting for Cloud were simply that such a budget would require many lines of our spreadsheet instead of one, then sure, our budget might be messier than we’d like, but we’d still have one. In reality, the Cloud budgeting problem is far more fundamental. For many organizations, budgeting for Cloud at all is confusing, counterproductive, and deleterious to their long-term IT strategy.

Budget for the Solution
ZapThink’s mantra for many years has been to understand the business problem and focus on the appropriate solution to that problem. Whether it be a software product, an investment in an architectural initiative, or spending money on Cloud, it’s essential that the stakeholders understand the problem they are trying to solve before funding a tool or approach that should lead to a solution. Buy a business intelligence tool if you have a business intelligence problem. Invest in a SOA initiative if the organization is looking to achieve greater levels of business agility in the face of a heterogeneous legacy IT environment. And budget for Cloud when…

When what? There’s the rub. In many contexts, Cloud isn’t the solution. It’s part of the answer, and whether the money should go to Cloud or to some alternative will depend on the nature of the problem. Here are some examples. Let’s say the problem is that market changes have led to new demands on some legacy system, and that system, while it still provides value, isn’t up to the task of responding to the new demands. The solution? Leverage SOA to implement a hybrid Cloud approach that extends the legacy asset by adding new SaaS-based capabilities. Cloud is an important part of this modernization solution to be sure, but as with most hybrid on-premise-to-Cloud solutions, it’s by no means the whole story.

Not all examples are enterprise centric. Many companies that have outgrown the startup category are finding their Cloud environments to be less and less cost-effective as the company grows. Sure, for a startup, putting a new capability in the Cloud is a no-brainer. But for many companies, buying and running their own servers becomes a better deal at some point. If such firms had simply budgeted for Cloud, then they would have had to change their IT strategy when they reached the break-even point. Instead, by budgeting for application hosting, without necessarily designating Cloud as the only option, then the IT strategy would basically say “invest in the hosting option that gives us the best total cost of ownership (TCO),” which is a far better strategy than “invest in the Cloud.”

Budgeting for Elasticity in a Public Cloud
Perhaps the most important benefit of the Cloud (Public Cloud in particular) is elasticity: the ability to rapidly and automatically scale up on demand as capacity requirements grow, and then to scale back down as demands wane. Compared to a traditional data center environment that must provision enough servers to handle peak demand, leading to underutilization across most of the calendar, the Cloud’s elasticity allows you to pay for only the capacity you require when you need it, which is ideal for any organization with unpredictable spikes in demand.

However, if your workloads have stable, predictable demand patterns, then the elasticity of the Cloud is far less of an advantage, and in many cases, traditional data centers are more cost-effective for such workloads. The conclusion, therefore, should be that if you expect unpredictable spikes in demand, then budget for Cloud, otherwise, budget for more traditional hosting, right?

Again, there’s a problem with this argument. Even for firms with spikes in demand, the spiky demand pattern isn’t necessarily permanent, and won’t generally apply to every workload. In other words, elasticity needs vary from workload to workload, and may vary for particular workloads over time. A better approach is to align your budget with the needs of the applications you are looking to run. By constraining your budget to Cloud, you are limiting your flexibility in how you distribute your workloads to achieve the best TCO.

Budgeting for Elasticity in a Private Cloud
If you’re trying to budget for your Private Cloud, the elasticity value proposition is even more complicated. The problem is that your Private Cloud is elastic until it isn’t. In other words, every Private Cloud has a maximum size at any point in time. If workloads hit this upper limit, you’ll have problems.

Furthermore, the only way to maintain high server utilization when elasticity is a priority in a Private Cloud is when there are several workloads that have different traffic patterns running simultaneously, in the hope that the spikes spread out over time, rather than bunching up. Whether this assumption is reasonable depends upon the number of such workloads as well as the underlying business cause for such spikes in demand. If all your workloads spike on Black Friday as the holiday season kicks off, or if some news event drives traffic to all your workloads at once, then the best laid Private Cloud plans are all for naught.

One way of handling the elasticity limitations of a Private Cloud is by Cloudbursting to a Public Cloud when workload spikes require it. But as I’ve discussed before, Cloudbursting is problematic at a technical level. But even if you can get Cloudbursting to meet your needs, you must still budget for it—and predicting how much it will cost you is fundamentally impossible, since the whole point of Cloudbursting is to deal with completely unpredictable situations.

Again, the answer to this problem is not to budget for the particular technology. Instead, budget for the solution that addresses the core business problem. If you’re an online retailer with seasonal spikes in demand, your budget should reflect an emphasis on the best answer to dealing with that seasonality. Cloud is sure to be part of the answer, but there will always be more to the story.

Budgeting for SaaS
There’s more to budgeting for SaaS apps than simply shifting the capital expense of software licenses to the operational pay-as-you-go that characterizes the SaaS world. True, you do pay as you go, and true, you can typically increase or decrease your per-seat fees depending on shifts in your demand for such apps. But you can’t simply say, “we were budgeting $X for our Siebel license, and now we can budget $Y per month for Salesforce instead,” because mature SaaS apps like Salesforce have fundamental differences from traditional enterprise apps like Siebel. Since Salesforce offers PaaS capabilities as well as SaaS, supported by rich APIs, it’s possible – and actually encouraged – to mix and match Salesforce capabilities with other capabilities available online.

Once again, the budgeting decision should focus on how to solve the business problem, rather than which product to buy or rent online. If you need exactly what a Salesforce offers, no more and no less, and that requirement never changes, then sure, put Salesforce in your budget. But that way of thinking is so twentieth century. Today, budget for the capabilities you require and then put together the best solution available, allowing for change in what that solution consists of. Cloud will indubitably be a big part of the answer. But the answer is rarely or ever simply Cloud.

The ZapThink Take
If my suggestion that you mix and match SaaS capabilities online to meet diverse business needs sounds familiar, you’re right. We call the end result of such conglomerations Distributed Hypermedia Applications, and such applications have been a central part of ZapThink’s architectural research for a few years now. As I discuss in my book, The Agile Architecture Revolution, and illustrate graphically in my new ZapThink 2020 poster, the Cloud is pushing the enterprise to leverage the power of Hypermedia-Oriented Architecture (HOA): the architectural style that was the original intent of REST. So, how can you budget for a SaaS app when it’s really an interconnected web of hyperlinked assets? The answer: focus on the problem and budget for the solution. Don’t budget for a buzzword.

More Stories By Jason Bloomberg

Jason Bloomberg is the leading expert on architecting agility for the enterprise. As president of Intellyx, Mr. Bloomberg brings his years of thought leadership in the areas of Cloud Computing, Enterprise Architecture, and Service-Oriented Architecture to a global clientele of business executives, architects, software vendors, and Cloud service providers looking to achieve technology-enabled business agility across their organizations and for their customers. His latest book, The Agile Architecture Revolution (John Wiley & Sons, 2013), sets the stage for Mr. Bloomberg’s groundbreaking Agile Architecture vision.

Mr. Bloomberg is perhaps best known for his twelve years at ZapThink, where he created and delivered the Licensed ZapThink Architect (LZA) SOA course and associated credential, certifying over 1,700 professionals worldwide. He is one of the original Managing Partners of ZapThink LLC, the leading SOA advisory and analysis firm, which was acquired by Dovel Technologies in 2011. He now runs the successor to the LZA program, the Bloomberg Agile Architecture Course, around the world.

Mr. Bloomberg is a frequent conference speaker and prolific writer. He has published over 500 articles, spoken at over 300 conferences, Webinars, and other events, and has been quoted in the press over 1,400 times as the leading expert on agile approaches to architecture in the enterprise.

Mr. Bloomberg’s previous book, Service Orient or Be Doomed! How Service Orientation Will Change Your Business (John Wiley & Sons, 2006, coauthored with Ron Schmelzer), is recognized as the leading business book on Service Orientation. He also co-authored the books XML and Web Services Unleashed (SAMS Publishing, 2002), and Web Page Scripting Techniques (Hayden Books, 1996).

Prior to ZapThink, Mr. Bloomberg built a diverse background in eBusiness technology management and industry analysis, including serving as a senior analyst in IDC’s eBusiness Advisory group, as well as holding eBusiness management positions at USWeb/CKS (later marchFIRST) and WaveBend Solutions (now Hitachi Consulting).

@CloudExpo Stories
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
As many know, the first generation of Cloud Management Platform (CMP) solutions were designed for managing virtual infrastructure (IaaS) and traditional applications. But that's no longer enough to satisfy evolving and complex business requirements. In his session at 21st Cloud Expo, Scott Davis, Embotics CTO, explored how next-generation CMPs ensure organizations can manage cloud-native and microservice-based application architectures, while also facilitating agile DevOps methodology. He expla...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
DevOps promotes continuous improvement through a culture of collaboration. But in real terms, how do you: Integrate activities across diverse teams and services? Make objective decisions with system-wide visibility? Use feedback loops to enable learning and improvement? With technology insights and real-world examples, in his general session at @DevOpsSummit, at 21st Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, explored how leading organizations use data-driven DevOps to close th...
Continuous Delivery makes it possible to exploit findings of cognitive psychology and neuroscience to increase the productivity and happiness of our teams. In his session at 22nd Cloud Expo | DXWorld Expo, Daniel Jones, CTO of EngineerBetter, will answer: How can we improve willpower and decrease technical debt? Is the present bias real? How can we turn it to our advantage? Can you increase a team’s effective IQ? How do DevOps & Product Teams increase empathy, and what impact does empath...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, discussed how given the magnitude of today's application ...
Modern software design has fundamentally changed how we manage applications, causing many to turn to containers as the new virtual machine for resource management. As container adoption grows beyond stateless applications to stateful workloads, the need for persistent storage is foundational - something customers routinely cite as a top pain point. In his session at @DevOpsSummit at 21st Cloud Expo, Bill Borsari, Head of Systems Engineering at Datera, explored how organizations can reap the bene...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
You know you need the cloud, but you're hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You're looking at private cloud solutions based on hyperconverged infrastructure, but you're concerned with the limits inherent in those technologies. What do you do?
Recently, WebRTC has a lot of eyes from market. The use cases of WebRTC are expanding - video chat, online education, online health care etc. Not only for human-to-human communication, but also IoT use cases such as machine to human use cases can be seen recently. One of the typical use-case is remote camera monitoring. With WebRTC, people can have interoperability and flexibility for deploying monitoring service. However, the benefit of WebRTC for IoT is not only its convenience and interopera...
Sanjeev Sharma Joins June 5-7, 2018 @DevOpsSummit at @Cloud Expo New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application p...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...
The 22nd International Cloud Expo | 1st DXWorld Expo has announced that its Call for Papers is open. Cloud Expo | DXWorld Expo, to be held June 5-7, 2018, at the Javits Center in New York, NY, brings together Cloud Computing, Digital Transformation, Big Data, Internet of Things, DevOps, Machine Learning and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding busin...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
The past few years have brought a sea change in the way applications are architected, developed, and consumed—increasing both the complexity of testing and the business impact of software failures. How can software testing professionals keep pace with modern application delivery, given the trends that impact both architectures (cloud, microservices, and APIs) and processes (DevOps, agile, and continuous delivery)? This is where continuous testing comes in. D
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
"WineSOFT is a software company making proxy server software, which is widely used in the telecommunication industry or the content delivery networks or e-commerce," explained Jonathan Ahn, COO of WineSOFT, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.