As our guide to cloud management aims to appeal to visitors with all levels of expertise, we feel it appropriate to start by defining the phenomenon that is “the cloud”. If your interest in managing resources in the cloud is to find solutions to cloud management problems, we invite you to click on the relevant link below to skip the history lesson we are about to give.
- The Origins of the Cloud
- The Development of On-Prem and Contracted Data Centers
- The Expansion of the Cloud
- Cloud Waste and Why Businesses Overspend
- Profitability is Not the Only Benefit of Cloud Management
- The Obstacles to Efficient Cloud Management
- How to Optimize the Opportunities that Exist in the Cloud
- Find Out More about Effectively Managing Resources in the Cloud
The Origins of the Cloud
“The cloud” evolved from businesses time-sharing computing resources in the 1950s. At the time, computers were too expensive for most businesses – costing the equivalent of $4 million in today´s money – and it made sense for businesses to rent computer time. By renting, businesses were only paying for the resources they were using, and not for the time computers were sitting idle.
In the 1960s, the Dartmouth Time-Sharing System was developed at Dartmouth College. The system was the first large-scale network to be implemented successfully and, at its peak, more than 8,000 students at ten universities and twenty-three high schools had access to it. The system housed more than five hundred programs and could cope with 300 users simultaneously.
Schematic Diagram of System Hardware – Dartmouth Time-Sharing System c. 1964
Since the 1960s, the development of technology such as packet switching, Ethernet, WiFi, Virtual Private Networks, etc. resulted in the Internet we have today. The cloud symbol was first used to represent networks of computing equipment in the ARPANET and CSNET systems of the 1970s and 1980s, while the term “the cloud” was originally used to refer to platforms for distributed computing in the 1990s.
The Development of On-Prem and Contracted Data Centers
As new technologies arrived, it became more affordable for larger businesses to build on-prem data centers. On-prem data centers have the advantages of being customizable to suit a business´s needs, and – at the time – provided more data security, visibility and accessibility than the contracted and colocation data centers that flourished during the “dot com bubble”.
The disadvantages of on-prem data centers remained the same as before. Businesses still had the capital cost of owning and managing their infrastructures – only not as much as previously. As far as developers were concerned, these costs – and the cost of paying for a reliable Internet connection – were “sunk costs” inasmuch as they would be incurred by the business regardless of what resources were deployed.
More recently, several large companies (Amazon, Microsoft, Google, etc.) branched away from their core business activities to build large-scale contracted data centers hosting massive infrastructures. These “Cloud Service Providers” offer businesses the opportunity to connect to their data centers via the Internet, and rent computing resources, database processing systems, and data storage facilities.
Due to the economies of scale Cloud Service Providers can achieve – and because different types of services can be rented quickly with the click of a mouse – it is often more cost-effective for businesses to rent cloud services than to build and maintain their own infrastructures – just like it was in the 1950s. Effectively “the cloud” is one very large time-sharing system – and it is expanding all the time.
The Expansion of the Cloud
Although Salesforce is widely credited with being the first company to pioneer the concept of delivering enterprise applications via the Internet in 1999, it was not until the launch of the Amazon Web Services (AWS) platform in 2002 – consisting of a limited selection of tools and APIs – that developers were able to build their own applications on a publicly-accessible platform.
By the time the AWS Infrastructure-as-a-Service (IaaS) was launched in 2006 – offering compute (EC2), storage (S3) and message queuing (SQS) services – the company claimed more than 150,000 developers had signed up to use the platform. In 2015 – by which time Amazon had added data processing, load-balancing and auto-scaling services – the number of active customers surpassed one million.
The growth in AWS revenues is difficult to establish because, until 2015, data relating to Amazon´s cloud services were not separated from those of its parent company. However, since 2015 – when it was revealed AWS achieved sales of $1.57 billion in the first quarter of the year – use the cloud has grown substantially and, for the third quarter of 2017, sales of AWS services were reported at $4.58 billion.
Amazon Web Service Revenues have almost tripled in less than three years.
Amazon is not the only player in the cloud services market. Indeed it “only” accounts for about 40% of the IaaS market share, which puts it ahead of Microsoft, Google and dozens of other service providers. Nonetheless, the recent growth in AWS revenues is a good illustration of where the market is headed. The value of the IaaS market is currently estimated at $34.6 billion, and forecast to increase to $71.5 billion by 2020.
However, along with the substantial expansion of the cloud, the problem has developed of managing resources in the cloud. Due to the issue of cloud waste and the potential for overspend, many businesses are looking at cloud management solutions in order to keep costs under control, maintain governance of their cloud accounts and optimize the opportunities that exist in the cloud.
Cloud Waste and Why Businesses Overspend
It has been estimated 30% of the money businesses spend deploying resources in the cloud is wasted. There are multiple reasons why businesses overspend on cloud deployments, but the three largest contributors to cloud waste are generally considered to be:
- A decentralized approach to cloud deployment.
- Paying for resources when they are not being used.
- Over-provisioning due to the complex variety of categories, products and pricing plans.
Although a decentralized approach to cloud deployment (giving individual development teams or business units access to the infrastructure they need with the click of a mouse) supports speed and flexibility in development, a lack of governance has resulted in businesses paying for under-utilized and redundant instances and virtual machines.
Leaving non-production resources running (such as those used for development, testing and staging) is a common problem among development teams. It likely originates from the days before the cloud, when on-prem data centers had “sunk costs” developers did not have to worry about and when shutting off a server did not save much money.
The over-provisioning of resources possibly also dates back to the days before the cloud, when businesses might over-build servers with future expansion in mind. With so many provisioning options to choose from, businesses sometimes err on the side of caution and over-provision – neglecting to revisit under-utilize resources to correctly provision them.
Over-provisioning matters so much is because of the way in which Cloud Service Providers charge for their services – according to the resources businesses provision, rather than the resources businesses use. For example, if a developer deploys a general purpose virtual server with 4 CPU’s, the business pays for the full capacity of 4 CPUs at all times, regardless of how much CPU capacity is actually being used. Each resource may only cost pennies per hour to run but, over time, cloud waste hurts profitability.
Profitability is Not the Only Benefit of Cloud Management
The elimination of cloud waste is often the primary reason why businesses look at cloud management solutions. Effective cloud management can result in instance right-sizing, the appropriate use of non-production resources, and the termination or reassignment of resources that are hurting profitability. However, there are many further benefits of cloud management.
Certainly for businesses in the early stages of migrating an existing infrastructure to the cloud, a system for managing resources in the cloud can be of great benefit. The early implementation of a cloud management strategy can ease the migration process and thereafter ensure the business´s deployments in the cloud are optimized for the best possible outcome.
Cloud management can help ensure resources are working optimally and properly interacting with users and other services. It can enhance security and aid compliance efforts for businesses operating in regulated industries. Managing resources in the cloud can also provide the analyses businesses need for workload balancing and capacity planning for future projects and budgets.
More than anything, effectively managing resources in the cloud improves efficiency. This is because the reporting functions of cloud management tools eliminate the need to make development teams wait for approval before being able to deploy fresh resources in the cloud – a typical knee-jerk reaction when businesses realize by how much they are overspending.
With the right cloud management tools, administrators have total visibility over the business´s cloud accounts and can enforce polies for Identity and Access Management (IAM) roles and users without sacrificing the ease, flexibility and speed of the cloud. Actions can be monitored and development teams or individual users held accountable for the deployment of resources and their use of those resources.
The Obstacles to Efficient Cloud Management
Businesses need to be aware that some cloud management solutions are not as helpful as they claim to be. They can either lack the tools to perform the tasks required by the business, or try to do too much – in which case businesses may be paying for tools that will never be used, or which duplicate the tools already supplied by Cloud Service Providers.
For example, some cloud management solutions fail to provide multi-cloud support. Others provide visibility of the business´s accounts, but fail to make recommendations or allow administrators to take action. There are some cloud management solutions that can only calculate how much a business has spent, but provide little to no insight into reducing that spend.
Indeed, most Cloud Service Providers´ user consoles can be configured to provide performance-related metrics and to determine how long backups should be retained. Similarly, businesses should consider whether their Cloud Service Provider´s user console provides sufficient functionality for automatic backups before investing in a cloud management solution for this purpose.
Features such as universal tag management and Command Line Interface (CLI) tools are undoubtedly useful for certain businesses in certain circumstances; but, when packaged together in a cloud management solution, the solutions often become over-complicated and can obstruct efficient cloud management by the diversions they create.
Furthermore, the cost of over-complicated cloud management solutions – whether or not they include functions that are available for free from Cloud Service Providers – can negate the financial benefits of implementing a cloud management solution in the first place. Therefore, in order to optimize the opportunities that exist in the cloud, businesses have to implement the “right” cloud management tools.
How to Optimize the Opportunities that Exist in the Cloud
What constitutes the “right” cloud management tools will vary from business to business depending on each business´s specific requirements and the nature of their cloud infrastructure (public, private or hybrid). However, there is no argument over the definition of “optimize” – making the most effective use of an opportunity with the minimum investment of time and money.
So, the first thing to do is forget about time-consuming, over-complicated and expensive cloud management packages, and go back to the basics of eliminating cloud waste – i.e. right-sizing over-provisioned resources, improving governance and switching off idle instances. There are two tools in particular that can help achieve these goals – CloudHealth and ParkMyCloud.
CloudHealth provides total visibility over all a business´s accounts – whether maintained in a public cloud, a private cloud, or both. Its “Rightsizing Report” reveals the overall efficiency of the business´s resources based on an analysis of cost, performance and utilization, and makes recommendations about resources that can be downgraded in capacity, switched to a more viable pricing plan or terminated.
ParkMyCloud not only helps businesses improve the governance of their cloud accounts, but also allows administrators to schedule on/off times for resources with the click of a mouse. Businesses can easily save up to 65% on the cost of deploying non-production resources in the cloud and, rather than finding out retrospectively how much they have spent, businesses can see in advance how much they will save.
Both tools fulfill the definition of “optimize” inasmuch as they make the most effective use of the opportunities that exist in the cloud with the minimum investment of time and money. Indeed it could be said that ParkMyCloud revisits the origins of the cloud by enabling businesses to only pay for the resources they are using, and not for the time instances are sitting idle.
Find out More about Effectively Managing Resources in the Cloud
Regardless of what stage of the “cloud journey” your business is at, it is imperative that some form of cloud management strategy is implemented and that the right tools for managing resources in the cloud are used. Therefore, whether you are just about to migrate an existing infrastructure to the cloud, or are looking for solutions to cloud management problems that have developed over time, do not hesitate to contact us and discuss your requirements with our sales team.