Emerging Utility and Cloud Computing Models

Ivan I. Ivanov

Empire State College, State University of New York

Long Island Center, Hauppauge, NY 11788, U.S.A.

ivan.ivanov@esc.edu

Abstract. This paper explores emerging opportunities and challenges for end-

users and corporations with the shift in the geography of computing services

and applications. Recent trends in consolidated Enterprise Information

Technology solutions have proven to enhance business efficiency when

significant fractions of local computing activities are migrating away from end-

user computers and enterprise servers. Data, Information Systems and

Enterprise Applications are being removed from desktop PCs and departmental

servers and are being integrated and packaged on the Web into “the computing

cloud.” The shift from locally installed and maintained programs and systems to

hosted services in “the compute cloud” affects the entire computational

ecosystem, from the CIO to the end-user, software developer, systems analyst,

and IT/IS vendor. We may need to take a fresh look at Thomas Watson’s

pivotal statement from 1943 “I think there’s a world market for maybe five

computers.” There are several distinct innovations towards emerging

centralized computational mega-structures such as:

• Grid computing infrastructure, middleware and application services

• Virtualization for more transparent scaling of complex systems

• Utility Computing services and models

• Dynamic Resources and Computing in the Cloud.

Growingly companies seem to achieve business advantage from the recent IT

transformations and different forms of Cloud or Utility Computing services.

Conversely, many issues remain: how well do the new models protect our

investments, business specific challenges, innovations, privacy, and information

security?

Keywords. Utility Computing, Cloud Computing, Internal-, External-, Private-,

Community-, Public Cloud, Cloud Software as a Service, Cloud Platform as a

Service, Cloud Infrastructure as a Service.

1 Introduction

The past decade has witnessed important Information Technology (IT) advances and

shifts in geography of computing services, applications and capabilities. The IT

transformations and changes stimulate business adaptations and social adjustments to

a great extend.

The economic difficulties in 2000s, the cost-effective strength of the Internet, and

some new technological advances have made businesses more vigilant and more

demanding about the return of their IT investments [6]. The economic and social

Ivanov I.

Emerging Utility and Cloud Computing Models.

DOI: 10.5220/0004463100480056

In Proceedings of the 3rd International Workshop on Enter prise Systems and Technology (I-WEST 2009), pages 48-56

ISBN: 978-989-674-015-3

motivation for efficient consolidated IT solutions such as utility or cloud computing is

steadily increasing. Insightful businesses and IT organizations are grasping the ideas,

discerning what the emerging technology and models are and how they can use them

to create a competitive advantage. Any delays in understanding and adapting

novelties might lead to dramatic changes or collapses. One of the many examples

from the first decade of the century is with the retail book industry - it was slow in

adapting to the Internet and E-commerce opportunities and got “Amazoned.”

Fig. 1. Internet evolving into Cloud [1].

The magnitude of the Internet revolution broadens with the advancement of the

infrastructure, operations and available services though the global network.

According to Delic and Walker [1], the evolution of the Internet infrastructure and

associated activities (Fig. 1) is heading in the Third Generation – The Cloud Services.

There is a new wave of interest in “Externalization of IT” --anything as a service

(including Software as a Service - SaaS, Infrastructure as a Service - IaaS, Platform as

a Service - PaaS), On-Demand, Utility and Cloud Computing, Outsourcing-- and

many businesses are exploring any alternatives that would allow them to reduce IT

operating costs while improving and intensifying information resources. Growing

companies appear to achieve business advantage from the recent IT transformations,

different forms and delivery models of Utility or Cloud Computing services.

New Utility and Cloud computing services are changing the ways we think of IT,

from economics of delivery mode to process and usage models. Many organizations

look to the cloud as a potential cost-savings boon by moving internally hosted IT

services to external providers. Other IT organizations view the Cloud as a potential

disaster recovery plan or as on-demand elastic capacity to boost business continuity

and operating service levels. The shift from locally installed and maintained programs

and systems to hosted services in “the compute cloud” affects the entire

computational ecosystem, from the CIO to the end-user, software developer, systems

analyst, and IT/IS vendor. We may need to take a fresh look at Thomas Watson’s

pivotal statement from 1943 “I think there’s a world market for maybe five

computers.”

Just as it was with that new-fangled ''Internet'' mania few decades ago, the Cloud

and the technologies of Cloud Computing suffer from confusion and hype [2].

Multiple proprietary related definitions, competing vendors and alliances, undefined

risks, new business models’ obscure utility and cloud computing services are slowing

down adoption. Although there is tremendous interest in the “Externalization of IT”

services, most organizations are approaching it cautiously until they have a more

complete picture of the risks involved.

Beyond important economic aspects of the emerging utility and cloud computing

models, I assume the business sector and society at large will see benefits and

opportunities in a global scale of utilizing those services. In this paper, I will describe

some of these new business oriented systems and models in more detail.

2 The Evolution of Computing Mega-Structures

As the demand of faster and more powerful computing structures increases, and as the

number and variety of applications and services progressively elevates, the need for

more capable and dynamic computing environments increases, too. According to the

IBM Corporation White Paper “Seeding the Cloud,” the evolution toward Cloud

Computing started in the late 1980s with the concepts of grid computing [4].

Grid computing specifically refers to leveraging massive number of computers in

parallel to solve particular problems, or to run specific applications. The key element

of Grid computing is that computers, or nodes, in a grid are able to act independently

without centralized control, handling requests as they are made and scheduling others.

Grid computing is the underlying technology for utility computing. In a long term,

grid computing is heading towards a convergence of utility computing from the

pricing and delivery prospective, and Web services-based integration and virtualized

technologies to enable multiple, networked computers to be managed as one [13].

Amongst vendors developing and exploiting grid concepts are HP with HP Adaptive

Enterprise Initiative, Sun Microsystems Network One, IBM’s On-Demand

Computing, and Oracle Grid Computing.

In the late 1990s, with virtualization of systems, servers and applications, the

model has expanded to higher level of abstraction – a virtual platform, including

storage and network resources, and subsequently virtual applications, which have no

specific underlying infrastructure. Utility computing has offered clusters as virtual

platforms for computing with a metered business model [4]. The utility computing

uniquely integrates storage, applications, computing power and network infrastructure

as a foundation for business adjustable IT services. It offers companies and private

users an access to hosted computing services, scalable and portable business

applications through a utility-like, pay-on-demand service over the Internet network.

In the ultimate utility computing models, organizations will be able to acquire as

much IT services as they need, whenever and wherever they need them [7].

Fig. 2. Evolution toward Cloud Computing [4].

Lately, software as a service (SaaS) has elevated the level of virtualization to

applications. The SaaS model has been developed to overcome common enterprise

challenges to meet fluctuating demands on IT resources efficiently. Whether referred

to a SaaS, utility computing, or hosted services, the idea is basically the same: instead

of buying, installing and supporting expensive packaged enterprise applications or

systems, users can access and utilize “externalized” applications over the network and

pay a fixed subscription fee, or an actual usage fee [14].

The concept of cloud computing has evolved from the concepts of grid, utility and

SaaS. In reference to IEEE Computer Society definition cloud computing “is a

paradigm in which information is permanently stored in servers on the Internet and

cached temporarily on clients that include desktops, entertainment centers, table

computers, notebooks, wall computers, handhelds, etc.” Cloud computing is an

emerging model through which users can gain access to their applications and

systems from anywhere, at any time, through their connected devices. These

applications and services reside in massively scalable data centers, structured in

public or private clouds, where compute resources can be dynamically provisioned

and shared to achieve significant economics of scale. The strength of the cloud

computing model is its infrastructure management, enabled by the maturity and

progress of virtualization technology to manage and better utilize the underlying

resources through automatic provisioning, re-imaging, workload balancing,

monitoring, change request handling, and dynamic and automated security and

resiliency platform [4].

3 Cloud Computing Characteristics and Models

Cloud computing is still an evolving model and definitions, underlying technologies,

issues, risks, and benefits have been developed in vigorous debates by the providers,

public and private sector users. There are neither standards nor agreed definitions

related to the Cloud computing. The most illustrative description of what the cloud is

comes from Kevin Marks, of Google "The idea of cloud computing comes from the

early days of the Internet, where we drew the network as a cloud. We didn't care

where the messages went --they came in one side and out the other-- and we didn't

have to worry about the network … the cloud hid it from us."

According to Wyatt Kash, editor in chief for Government Computer News, “A

group of leading standards development organizations are working jointly to foster

common standards for cloud computing and storage, beginning with the launch a new

site called cloud-standards.org.” The organizations joining in the collaborative effort

include the Cloud Security Alliance, the Distributed Management Task Force, the

Open Grid Forum, the Storage Networking Industry Association and the Open Cloud

Consortium, with other groups expected to participate. The Clouds Standards

Coordination working group plans to focus its efforts on identifying current and

emerging practices and products supporting cloud computing. In addition, it expects

to help rationalize cloud computing security, deployment and data-exchange formats,

taxonomies and reference models, storage standards and service-level agreements [8].

3.1 Cloud Computing Definitions and Characteristics

The National Institute of Standards and Technology, U.S.A. has drafted a definition

of Cloud computing to serve as a starting point for government agencies and to

maintain the implementers and providers on the same track.

According Peter Mell and Tim Grance from NIST “Cloud computing is a model

for enabling convenient, on-demand network access to a shared pool of configurable

computing resources (e.g., networks, servers, storage, applications, and services) that

can be rapidly provisioned and released with minimal management effort or service

provider interaction. As the cloud computing industry represents a large ecosystem of

many models, vendors, and market niches, this definition attempts to encompass all of

the various cloud approaches. This cloud model promotes availability and is

composed of five essential characteristics, three delivery models, and four

deployment models” [5].

In relation to NIST definition the five key cloud Characteristics are [9]:

• On-demand self-service - a consumer can unilaterally provision computing

capabilities, such as server time and network storage, as needed

automatically without requiring human interaction with service’s provider.

• Ubiquitous network access - capabilities are available over the network and

accessed through standard mechanisms that promote use by heterogeneous

thin or thick client platforms.

• Location independent resource pooling - the provider’s computing resources

are pooled to serve all consumers using a multi-tenant model, with different

physical and virtual resources dynamically assigned and reassigned

according to consumer demand. The customer generally has no control or

knowledge over the exact location of the provided resources but may be able

to specify location at a higher level of abstraction (e.g., country, state, or

datacenter). Examples of resources include storage, processing, memory,

network bandwidth, and virtual machines.

• Rapid elasticity - capabilities can be rapidly and elastically provisioned to

quickly scale up and rapidly released to quickly scale down. To the

consumer, the capabilities available for provisioning often appear to be

infinite and can be purchased in any quantity at any time.

• Measured Service - cloud systems automatically control and optimize

resource use by leveraging a metering capability at some level of abstraction

appropriate to the type of service (e.g., storage, processing, bandwidth, and

active user accounts). Resource usage can be monitored, controlled, and

reported providing transparency for both the provider and consumer of the

utilized service.

3.2 Cloud Computing Delivery and Deployment Models

NIST team has defined three Delivery Models based on the variety of services

requested by the consumer and supported by the provider. Delivery Model

Architecture – see Figure 3, must be deployed on top of cloud infrastructure that

incorporates the listed above key characteristics [9]:

• Cloud Software as a Service (SaaS) - the capability provided to the consumer

is to use the provider’s applications running on a cloud infrastructure and

accessible from various client devices through a thin client interface such as

a Web browser. The consumer does not manage or control the underlying

cloud infrastructure, network, servers, operating systems, storage, or even

individual application capabilities.

• Cloud Platform as a Service (PaaS) - the capability provided to the

consumer is to deploy onto the cloud infrastructure consumer-created

applications using programming languages and tools supported by the

provider. The consumer does not manage or control the underlying cloud

infrastructure, but the consumer has control over the deployed applications

and possibly application hosting environment configurations.

• Cloud Infrastructure as a Service (IaaS) - the capability provided to the

consumer is to rent processing, storage, networks, and other fundamental

computing resources where the consumer is able to deploy and run arbitrary

software, which can include operating systems and applications. The

consumer does not manage or control the underlying cloud infrastructure but

has control over operating systems, storage, deployed applications, and

possibly select networking components.

Fig. 3. Delivery Model Architectures [9].

In the same NIST document, Peter Mell and Tim Grance have described four

Deployment Models specified in two types of clouds: internal or external, depending

on where the clouds reside – within or outside of organization’s network security

parameters:

• Private cloud - the cloud infrastructure is owned or leased by a single

organization and is operated solely for that organization.

• Community cloud - the cloud infrastructure is shared by several

organizations and supports a specific community that has shared concerns.

• Public cloud - the cloud infrastructure is owned by an organization selling

cloud services to the general public or to a large industry group.

• Hybrid cloud - the cloud infrastructure is a composition of two or more

clouds (internal, community, or public) that remain unique entities but are

bound together by standardized or proprietary technology that enables data

and application portability.

The NIST drafted definition, characteristics and models are in compliance with

currently well positioned platforms such as VMware's vSphere and the open source

Eucalyptus software. Similarity and matching descriptions related to types of clouds

and delivery models appear with VMware Cloud Business Types, see Figure 4, and

NIST defined above models [9].

Fig. 4. VMware vSphere and vCenter on and off premise clouds [15].

4 Utilizing the Cloud to Tackle Limitations

A growing number of investors and consumers are exploring cloud options and

opportunities while Amazon, Google, Oracle, SUN Microsystems, VMware already

have appealing offerings and leading companies in the sector such as Microsoft, HP

and IBM are investing billions in this initiative. According to leading vendors’ and

implementers’ the new mega-trend - Cloud computing, has become a bona fide

enterprise solution when users want to avoid dealing with infrastructure and

configuration management. It works well as a consumer service such as SaaS, Web

and DB hosting, email, and offsite PCs backup. On the developer side, it lends itself

to Web applications design, content delivery, and building online systems and

applications where scale, performance, and selection of infrastructure and software

environment aren’t critical. The provider or the service partners’ ecosystem are in

complete control of the infrastructure, the platform and the services.

Grid and Utility computing users, conversely, are more inclined to install,

arrange, scale and manage online services using the provider’s resources being in

most cases in full control of the infrastructure and applications. There is immense

variety in possible and actual configurations of technologies and infrastructure to

support utility and grid computing models. According to Alfredo Mendoza [10], well

established and proven technologies like virtualization, advanced application

accounting, and dynamic partitioning, that have long existed in mainframes and now

are available on newer server architectures in combination with grid computing, web

services and hyper-threading technologies are contributing to create grid

infrastructures and promote the utility model. The two models fit well where the

implementers need to control geographic distribution, scalable compute resources,

bandwidth, and performance in order to manage the user experience as the

applications are in their own data center. Analyzing the three concepts – grid, utility

and cloud computing, their evolution and differences listed above, the final argument

actually is: outsourcing IT operations to providers or purchasing your own IT assets.

All three models have proved, in many cases, better and more efficient ways of

delivering enterprise IT services, but the final decision may well come down to how

confident the user feels about the utility or cloud computing provider. When planning

the shift to the clouds there are different options depending on what you want to put

there and for how long. Although vendor offers similar services, while moving your

computing applications away from your own premises, they might apply quite

different pricing models and SLAs. Users have to take into account the current needs,

potential growth and ability to change the SLA with forms and cloud services that suit

the company best. In her review of recent cloud services, Jarina D’Auria from CIO

magazine describes Amazon’s Elastic Compute Cloud (EC2) as an environment to

run computing resources while keeping the control over the data in the user’s hands

and emphasizing pay-per use model. The new Google App Engine allows you to build

your own virtual application to run Web applications on Google’s servers and features

include dynamic Web serving, automatic scaling and load balancing, storage sorting,

APIs for authenticating users and different pricing scales. The VMware vSphere 4 and

vCloud initiative are providing the capability to move physical infrastructures and

broader application capability on and off premise via hundreds of cloud services

providers. By moving all physical data centers, companies not only save computing

and operation costs but also have one silo for storage and resource management ,

based on vMotion management tools, VMsafe security APIs and data recovery

systems [11].

Applying any of the available cloud services, the users will have, in most cases,

unlimited computing resources, elastic infrastructure and more opportunities for new

applications at a price they are able to pay and with no upfront costs. Strategizing the

company final solution it might be most appropriate to build a specific hybrid model

incorporating internal private cloud for the most sensitive data and critical

applications and to outsource into public or community clouds some less decisive

systems and routine applications. Evolving the internal IT infrastructure toward a

cloud-like model for supporting the most sensitive and critical business operation at

lower risk and higher security will enhance and facilitate the integration with outside

applications running into external clouds [12]. In many industries such approach

would decrease the risk of total outsourcing and the company will better control its

information assets. Amongst higher educational institutions most of them keep and

control in their own data centers students’ records and financial systems while widely

utilized educational services from external providers such as on-line course delivering

environment (ANGEL, Blackboard), student consulting and supporting services as

Smarthinking, email and e-collaborative tools from Google (Google Apps), or back

up and archive services from Amazon (S3) or other vendors.

5 Conclusions

The shift to cloud computing will shake the $3.4 trillion global tech industry, and as

the marker researchers Gartner expects the 3.8% shrinking this year will not affect

portables, wireless networks and cloud computing over the next few years. Gartner

predicts the market for cloud computing services will triple from $46.6 billion last

year to 150.1 billion in 2013 [3].

Ultimately, cloud computing is hovering to make a real impact on businesses of all

sizes and society at large. It gives to smaller businesses a chance to utilize resources

and services previously only IT leading companies could afford. According Vivek

Kundra, Federal CIO "The cloud will do for government what the Internet did in the

'90s … I believe it's the future … It's a fundamental change to the way our

government operates by moving to the cloud. Rather than owning the infrastructure,

we can save millions … It's moving technology leaders away from just owning assets,

deploying assets and maintaining assets to fundamentally changing the way services

are delivered.“

As any change this new mega-trend in IT industry and services may take a while

for building users’ confidence, but like any major concept, it always starts off slowly,

but once businesses and society realize the advantages of cloud computing, it will

pick up pace rapidly.

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