How cloud services can help business owners to save money and aspiring entrepreneurs to incubate their idea?

Every day Cloud services taking top share in technical news. Companies like Microsoft, Google, Amazon, Rackspace, IBM, and many more are betting their future on Cloud Services and Internet  is filled with more and more details on Cloud Service. Please see my blog below for more about “Introduction to cloud services”:

http://cloudcelebrity.wordpress.com/2011/11/22/introduction-to-cloud-services-iaas-paas-saas/

Entrepreneurs of every age and vision do believe cloud can take their dream concept to product however they really don’t have clear picture or vision, how it is possible. As my every day work I have opportunity to talk such aspiring entrepreneurs on weekly basis who look cloud services a platform for them to visualize their idea or concept and I get same question about how and where to start with cloud services. Their objective is to use cloud services to save money and have their concept in action before they jump to next level.

There are another class of business owners who have small business running either on-premise or 2rd party hosted services. Individuals or Small business owners have tight budgets and not a full time technical staff to move their current infrastructure to cloud, and the cloud service assistance they get, could be out of their budget. They are also looking towards cloud services to save money and extend their business. They know cloud services sure can save money and create wider opportunity to expand their business however they lake the information about how to jump start their migration.

This article is written to help everyone who either have an idea or concept and looking cloud services to visualize their concept  or those who want to save money and have better extensibilities for their current running business.

Cloud service could have many more but essentially it must have the following 2 main essential particulars:

– Cloud Core

  • A cloud core can run single or multiple cores as available
  • A Cloud core CPU is physical or virtual machine available in cloud which can run your application

– Cloud Storage

  • A file storage for (unstructured content) which is available on internet and accessible easily over HTTP/HTTPS and/or TCP/IP
    • Support for files, queue, table
    • HTTP based API to access storage contents
  • A Database system (structured content) available on Internet and accessible over HTTP/HTTPS and/or TCP/IP

Other things which can add value to Cloud Services:

  • Access Control
  • Identity & Authentication Management System
  • Web based Cache system
  • Web Services Support
  • Cloud – On Premise network connectivity
  • Auto scaling,
  • CDN
  • Security and Protection
  • Support for Big Data handling system

The success of quality cloud services depend on the following functionalities:

  • You can choose your own OS
  • You can choose you own development stack
  • Support for Development SDK, Diagnostics Tools, Logging, Easier Management System,
  • Database migration, backup,  Sharding, partitioning, indexing, analysis

How the cost is calculated in cloud services?

  • CPU core are charged per hour basis
    • For example Windows Azure single core cost is 12 cents per hour per core
      • A dual core machine will cost same as having two instances of single core machine
  • File Storage (unstructured content)  is charged on monthly basis, with transection and up/down bandwidth consumption
    • Windows Azure Storage is charged 14 cents per Giga Byte per month
    • 10,000 transection cost 1 cents
    • Up/down bandwidth cost range 15-20 cents per Giga byte
  • Database Storage (structured content)
    • Database storage is cost the size of database you incur however a price range is giving by cloud service provider
      • For example SQL Azure is charged on various DB sizes
        • 1 GB SQL Azure Database 9.99
        • 5 GB SQL Azure Database 49.95
        • 10GB SQL Azure Database 99.90
    • Database ingress/egress charges are also extra depend on cloud service provider
    • Other Database related functionalities may cost extra depend on cloud service provider
  • Other connectivity’s components:
    • Access Control could be charged per connection bases or you will be given X amount of connection for cost Y
    • Web based Cache is charged per size
    • Networking connectivity is charged per connection basis

Note: Most of cloud service don’t charge any ingress/egress cost if cpu cores, storage, databases, everything related with your cloud application, exist within same data center.

So if you are an entrepreneur looking to adopt cloud for your project or looking to migrate your web based application to cloud, your selection could be any of the above however let’s consider following two types:

Type One:

  1. CPU Core
  2. File System Storage (unstructured content)
  3. Database System (structured content)
  4. Extra functionalities

Type Two:

  1. CPU Core
  2. File System Storage (unstructured content)
  3. Extra functionalities

Let’s consider you have a concept in your mind which you want to try in Cloud. Consider you would need a quad core machine with 8GB memory to run your application initially. Later you can add multiple virtual machine instances of the same application to expand the service to test scalability. Let’s also consider you would need 10 GB file storage space. To make the application database dependent, let’s consider having a requirement of 10GB database as well. We will calculate how much it will cost to run your application initially and when we test it for scalability for a week how much it would have cost. Because PAAS cloud service provides you virtual machine in cloud you just need your application and supported OS and run time modules to let it run, we will take an example of Windows Azure, as cloud service (PAAS) and see what it will cost to us.

Now let’s consider an example cloud service Windows Azure:

  • Azure Core: 12 cents per core so let’s consider having a quad core machine => Cost 48 cents per hour – Total $345.60
  • Blob Storage: 14 cents / GB => for 10 GB  – Total $1.40
    • Let’s consider 5,000,000 Transections in a month – Total $5.00
    • Let’s consider 10 GB ingress/egress bandwidth usage => for 20 cents /GB – Total $2.00
  • SQL Azure: 10 GB DB => $99.90 / Month – Total $99.90

So for total cost for your application in a month is as below:

Type One:

  • 354.60 + 1.40 + 5.00 + 2.00  = $363.00 / month

Type  Two:

  • 354.60 + 1.40 + 5.00 + 2.00  + 99.90 = $462.90 / month

Now if you want to test capacity with multiple instances:

  • Add 9 more instances (total 10) for the same quad core instance for a week (7 days)
    • Add  $80.64 for a week cost to run 10 virtual machine instance
  • Add 50 GB file Storage (unstructured content) for a month (charged monthly)
    • Add $7.00 for month
  • Add 50 GB Database storage
    • Add round $500.00 to the above cost
  • If you would want to set up open ID authentication
    • $1.99 per 100,000 transactions

As you can understand from above details that if you are an entrepreneurs and looking for cloud to give you head start or want to move you currently running business to cloud. As of now Windows Azure only provides PASS.

Resources:

  1. Windows Azure Programmer Resources: http://www.microsoft.com/windowsazure/learn/get-started/?campaign=getstarted
  2. Windows Azure Pricing: http://www.microsoft.com/windowsazure/pricing/
  3. Windows Azure Pricing Calculator: http://www.microsoft.com/windowsazure/pricing-calculator/?campaign=vw-calc
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Introduction to Cloud Services (IAAS, PAAS & SAAS)

You have already heard about Cloud service and some associated terms such as IAAS, PAAS, and SAAS however you have difficulty to understand these terms. Here I will try to use a very simple real life scenario which sure was part of your life sometime. Do you like Pizza? Yes, you do, I know. Let’s consider following 4 scenarios:

Scenario 1: You make your own pizza at your home and eat it.

In this scenario you will have to perform everything needed for your pizza however you own everything in this process.

Scenario 2: You go to “Take & Bake Pizza” shop to get Pizza and then bake it at you home and eat it.

In this scenario you buy readymade uncooked pizza from the shop and bake it at your own home. You use your own oven to cook it and then serve it at your dining table. So you own significant amount of steps in this scenario and depend a little on pizza vendor.

Scenario 3: You order pizza, delivered at your home and then eat it.

In this scenario you order fully prepared pizza with your choice of toppings, delivered to you at your doorstep. You just use your own soda and then serve it at your dining table. So you are depend on pizza vendor for almost everything and just have some responsibility.

Scenario 4: You go to some nice diner and enjoy your pizza there.

In this scenario you just visit to your choice of diner and enjoy pizza there. You just pay for all the services you consume so you don’t own anything instead depend on everything on diner.

If you put all of above scenarios together everything look like as below:

Now let’s consider you are a tech company and you own everything and you are not depend on any other for any service. You own infrastructure, application and everything in between. As you can see your ownership is layered i.e. infrastructure, platform and software as below:

Now you want to consider a cloud service vendor who can provide some assistance to your company. As you can see above you can get some help to offload infrastructure and you can go to extreme and just use a cloud service vendor who can provide you full software and you just don’t need to own anything.

Cloud services also have the same layered concept in which you are partially or fully depend on your vendor. Currently cloud service are categorize in 3 different types:

1.          Infrastructure as a Service (IAAS)

2.          Platform as a Service (PAAS)

3.          Software as a Service (SAAS)

Let’s see each Cloud Service in details.

1. Infrastructure as a Service (Also called as Hardware as a Service)

In IAAS, basically you just use vendor hardware and run your own application along with required OS & runtime. These vendors will provide off-site servers, storage, and networking hardware, for rent. You will use these hardware directly from internet. IAAS avoids maintenance costs and office space.

Main Vendors:

  • Amazon ECx, Rackspace Cloud, GoGrid Cloud Hosting, Google App Engine, Nirvanix Storage Delivery Network, Terremark Enterprise Cloud, VMware vCloud

2. Platform as a Service (Also called as Middleware)

You depend on vendor for hardware and application run time and just spend your energy on your application. Most common examples are Website hosting, Storage Solutions, Web App management, application development, collaboration tools, etc. PAAS vendors provide various solutions i.e.  OS, virtualized servers,  Single signon service etc.

Main Vendors:

  • Microsoft (Windows Azure), Amazon S3, VMWare, Rackspace, Red Hat, Google App Engine, Heroku, AppFog

3. Software as a Service

Any application hosted on remote server that can be accessed over the Internet through a web browser is considered SaaS.

Vendors: Netflix, MOG, Google Apps, Box.net, Dropbox, , GoToMeeting, Cisco’s WebEx, Salesforce’s CRM, ADP, Workday and SuccessFactors.

Finally here is everything in “Big” nutshell:

Hope you have enjoyed reading it!!