Can You See the Clouds from Windows?

During the course of our webinar entitled "The Pragmatist's Guide to Cloud Computing: 5 Steps to Real ROI," several of the attendees submitted questions regarding the status of Windows as an environment for cloud applications. In a partial answer to the question, Jeff Barr, a speaker during the webinar and a member of the Amazon Web Services team, responded that a beta implementation of Windows for EC2 was now available. The problem with the notion of “Windows for EC2” is that it perpetuates the broken, legacy model of tying your application to the infrastructure upon which it runs.

In the legacy model, applications became artificially tied to the physical server upon which they ran, and server utilization was low because it is very difficult to run multiple applications on a single instance of a general purpose operating system. The reason it is difficult to run multiple applications on a single instance of a general purpose operating system is because each application has unique needs which conflict or compete with the unique needs of other applications. Virtualization technology, such as that provided by VMware or Citrix with XenServer, breaks the bond of the application to a physical server by placing a layer of software, called a hypervisor, on the physical hardware beneath the operating system instances that support each application. The applications are “isolated” from one another inside virtual machines, and this isolation eliminates the conflicts.

Amazon embraces this virtualization model by using Xen to enable their Elastic Compute Cloud (EC2) service. So what's the problem? If the OS instances are not tied to the physical servers any longer (indeed you do not even know which physical system is running your application on EC2, nor do you need to know), why am I raising a hullabaloo over a “broken model?” The reason this new model of Windows for EC2 is broken is because your application is now artificially coupled to EC2. When you begin with a Windows Amazon Machine Image (AMI), install your application on top, configure-test, configure-test, configure-test, configure-test, configure-test to get it right, and then save the tested configuration as a new AMI, the only place you can run this tested configuration of your application is on Amazon's EC2. If you want to run the application on another virtualized cloud, say maybe one provided by RackSpace, or Terremark, or GoGrid, or even your own internal virtualized cloud of systems, you have to install the application yet again, configure-test, configure-test, configure-test, configure-test, configure-test to get it right again, and then save the tested configuration on the other cloud service. Why don't we just stop the madness and admit that binding the OS to the physical infrastructure upon which it runs is a flawed approach when applications run as virtual machine images (or virtual appliances) atop a hypervisor or virtualized cloud of systems like EC2?

The reason that we are continuing the madness is because madness is all we have ever known. Everyone knows that you bind an operating system to a physical host. Operating systems are useless unless they bind to something, and until the emergence of the hypervisor as the layer that binds to the physical host, the only sensible approach for operating system distribution was to bind it to the physical host. When you buy hardware, you make it useful by installing an operating system as step one. But if the operating system that you install as step one in the new virtualized world is a hypervisor in lieu of a general purpose operating system, how do we get applications to be supported on this new type of host? Here's your answer -- what we previously knew as the general purpose operating system now needs to be transformed to just enough operating system (JeOS or “juice”) to support the application, and it should bind to the application NOT THE INFRASTRUCTURE.

Virtualization enables the separation of the application from the infrastructure upon which it runs – making possible a level of business agility and dynamicism previously unthinkable. Imagine being able to run your applications on-demand in any data-center around the world that exposes the hypervisor (any hypervisor) as the runtime environment. Privacy laws prevent an application supporting medical records in Switzerland from running in an Amazon datacenter in Belgium? No problem, run the application in Switzerland. Need to run the same application in Belgium in support of a new service being offered there next month? No problem, run it on Amazon's infrastructure in Belgium. The application has to support the covert operations associated with homeland security and it cannot be accessed via any Internet connection? No problem, provide it as a virtual appliance for the NSA to run on their private network. Just signed a strategic deal with RackSpace that provides an extraordinary level of service that Amazon is not willing to embrace at this time? No problem, shut down the instances running on EC2 and spin them up at RackSpace. All of this dynamic capability is possible without the tedious cycle of configure-test -- if we will simply bind the operating system to the application in order to free it from the infrastructure and let it fly into the clouds.

So why doesn't Microsoft simply allow Windows to become an application support infrastructure, aka JeOS, instead of a general purpose operating system that is bound to the infrastructure? Because JeOS disrupts their licensing and distribution model. Turning a ship as big as the Microsoft Windows licensing vessel might require a figurative body of water bigger than the Atlantic, Pacific, and Indian oceans combined. But if they don't find a way to turn the ship, they may find that their intransigence becomes the catalyst for ever increasing deployments of Linux and related open source technology that is unfettered by the momentum of a mighty business model. Folks with valuable .Net application assets might begin to consider technology such as Novell's mono project as a bridge to span their applications into the clouds via Linux.

I can tell you that there are lots of folks asking lots of questions about how to enable Windows applications in the “cloud.” I do not believe the answer is “Windows for EC2” plus “Windows for GoGrid” plus “Windows for RackSpace” plus “Windows for [insert your data-center cloud name here].” If Microsoft does not find a way to turn the licensing ship and embrace JeOS, the market will eventually embrace alternatives that provide the business agility that virtualization and cloud computing promises.

Amazon is Utility Computing

The cover story for last week's BusinessWeek magazine described how Amazon is launching a set of new technology services that enable other businesses to use Amazon's computing infrastructure. The tone of the article was a bit skeptical, but we use the services here at rPath, and we like what we see. We are particularly excited about the Elastic Compute Cloud (EC2) service because it is the first large scale utility computing offering to come to market based upon Xen virtualization technology.

Our first experience with Amazon's computing services was when we migrated all of our virtual appliance images from our NAS at our datacenter site to Amazon's Simple Storage Service (S3). We transferred 1.7 terabytes of images (it has since grown to over 2 terabytes), redirected all of our web services that control access to the images, and our rBuilder Online users began receiving their disk images from Amazon instead of from rPath. Our first monthly bill from Amazon was about $300, which includes the cost of the bandwidth to serve the images. We eliminated the need to purchase a very expensive NAS disk array (about $80K), and freed up our existing NAS storage for other uses. Amazon is amazing.

EC2 promises to be even more interesting than S3 because it has historically been very difficult to offer CPU capacity in a utility model due to the inflexibility of the general purpose operating system. Unlike file storage, where it is easy to decouple the application from the data due to well codified access protocols and file system standards, CPU services have been hamstrung by the lack of standards for application system services at the level of the operating system. For example, in order to use the Sun Grid Compute Utility, your application must be ported to run natively on Solaris 10 and be scripted to work with N1 Grid Engine Software. And the service cost $1/CPU-hr. With EC2 from Amazon, your application can run any Xen enabled, x86 guest OS at any version level. And the service costs just $.10/CPU-hr. No operating system constraints and one-tenth the cost. Another bummer for the folks at Sun. . . .

Amazon and the CIO Nightmare

If you watch the behavior of tech-savvy consumers closely enough, you will garner clues regarding the hot trends that will hit the world of enterprise computing in the next 1 – 3 years. It happened with Microsoft, as individuals brought their PC mentality from home to work to enable desktop publishing productivity long before the IT department agreed to support the PC. It happened with Linux, as computer geeks brought Linux to work to enable web infrastructure long before the IT department acknowledged the benefit of Linux. In fact, Red Hat created a $20M business selling boxes of CDs and documentation at CompUSA and Frye's before the first IT customer paid a single dollar to the company. I think Amazon is now driving the vision for the future of enterprise computing, and the digital consumer is declaring that they have got it right.

With it's Simple Storage Service (S3) and Elastic Compute Cloud (EC2), Amazon is demonstrating that it is possible to dramatically lower the cost and complexity of “web scale” computing to a price point where even a kid can get into the game. With S3, storage is only $.43/gigabyte*month, with an interface that is simple to use. Likewise with EC2, computing infrastructure costs only $.10/CPU*hour, and there is no litany of complicated rules for promoting your application to production (there are some rules, but relative to the promotion process in most enterprises, they are an order of magnitude less complex). Imagine the difficult conversation between the CIO and the CEO of a company when the CEO realizes what Amazon has accomplished:

CEO: Remind me again what we charge our business units for storage and computing in order to fund your department?

CIO: Well, for storage, we charge the business units about $12/gigabyte/month, and for computing it is about $9/CPU*hour. We re-coup about 60% of the IT budget with these chargebacks.

CEO: So I see these credit card charges from Amazon on my statement, and I asked my 14 year old kid what he was doing to rack up this bill. He tells me that he is running a wiki on Amazon where all the kids in his soccer league post information, stats, links, etc. regarding their teams. I take a look, and this site has everything, including full streaming video, forums, etc. He tells me it is $.43/gigabyte/month for storage, and $.10/CPU*hr for computing. He tells me not to worry about the charges, because they are running a hot dog stand at the games these days to pay me back for the Amazon bill. And the hot dog stand is going to turn a profit to boot. What do you think we should do about this situation?

CIO: Uuuhhhhh, I don't know? Maybe we should open a hot dog stand?

Bottom line, the CIO's that are not getting prepared to be the “Amazon” for their company are getting prepared to be a hot dog vendor. They must simplify the cost and complexity of delivering compute infrastructure to the business units by at least an order of magnitude, or the business units are going to take their business to Amazon or some other provider that “gets it.” I am not saying that Amazon has everything the enterprise needs today, but they have the right idea about what it should cost and how simple it should be to use.

The suppliers see it, because their business is threatened by Amazon. EMC is talking about it in USA Today, and Sun is promoting black box computing. The future of the datacenter is a “simple storage service” and an “elastic compute cloud.” The days of impossible complexity and “wait 6 months to get a server provisioned for your application” are definitely numbered.

Larry Rains on the Cloud Parade

At Oracle world last week, Larry Ellison derided the current “cloud” craze, likening the technology industry's obsession with “fashion” to the women's apparel industry. In a sense, he is right. Everything is being labeled cloud these days. New datacenters from IBM – cloud. New browser from Google – cloud. New strategy from VMware – cloud. I myself commented to Ben Worthen of the Wall Street Journal that I too feel the cloud craze is a bit “nutty.” At the same time, I believe there is some real change underfoot in the industry, and I believe that Amazon's Elastic Compute Cloud (EC2) is leading the way in capturing the imagination about what is possible with a new approach.

The reason EC2 has captured the imagination of so many people in the industry is because it offers the possibility of closing the painful gap that exists between application development and production operations. Promoting applications from development to production has typically been a contentious negotiation between the line of business application developers and the IT production operations management crew. It is a difficult process because the objectives of apps and ops run orthogonal to one another. Apps is about new features to quickly respond to market demand, and ops is about compliance, stringent change control, and standardization to assure stability.

With EC2, developers don't negotiate with operations at all. They simply package up the innovations they want inside a coordinated set of virtual machines (virtual appliances in the case of the ISV vernacular), and deploy, scale, and retire based upon the true workload demands of the market. No requisitions for hardware. No laborious setup of operating environments for new servers. No filling out waivers for using new software components that are not production approved yet. No replacement of components that fail the waiver process and re-coding when the production components don't work with the new application features. No re-testing. No re-coding. No internal chargebacks for servers that are not really being used because the demand for the application has waned. No painful system updates that break the application – even when the system function is irrelevant to the workload. No. No. No.

The on-demand, self-service datacenter architecture of Amazon's EC2 is going to put huge pressure on the operations organization to respond with an internal “cloud” architecture – or lose the business of the developers who would rather “go to the cloud” than negotiate with ops. Here at rPath, we believe that the ops folks are going to need to provide the apps folks with a release (rBuilder) and lifecycle management system (rPath Lifecycle Management Platform) that enables the self-service capability and rapid promotion of EC2 while preserving compliance with operating policies that assure stability and security. And, if an application really takes off, you don't have to build a new datacenter to respond to the demand. Just scale out the workload onto Amazon, or another provider with a similar cloud architecture. IT operations now has a way to say “yes we can” instead of “no you can't.” Getting to “yes” from your IT ops provider by closing the gap between apps and ops is what the excitement of cloud is all about.

The Virtual Machine Tsunami

Over the past 2 weeks, I have had a number of very interesting conversations with partners, prospects, customers, and analysts that lead me to believe that a virtual machine tsunami is building which might soon swamp the legacy, horizontal system management approaches. Here is what I have heard:

Two separate prospects told me that they have quickly consumed every available bit of capacity on their VMware server farms. As soon as they add more capacity, it disappears under the weight of an ever pressing demand of new VMs. They are scrambling to figure out how they manage the pending VM sprawl. They are also scrambling to understand how they are going to lower their VMware bill via an Amazon EC2 capability for some portion of the runtime instances.

Two prominent analysts proclaimed to me that the percentage of new servers running a hypervisor as the primary boot option will quickly approach 90% by 2012. With all of these systems sporting a hypervisor as the onramp for applications built as virtual machines, the number of virtual machines is going to explode. The hypervisor takes the friction out of the deployment process, which in turn escalates the number of VMs to be managed.

Amazon EC2 demand continues to skyrocket. It seems that business units are quickly sidestepping those IT departments that have not yet found a way to say “yes” to requests for new capacity due to capital spending constraints and high friction processes for getting applications into production (i.e. the legacy approach of provisioning servers with a general purpose OS and then attempting to install/configure the app to work on the production implementation which is no doubt different than the development environment). I heard a rumor that a new datacenter in Oregon was underway to support this burgeoning EC2 demand. I also saw our most recent EC2 bill, and I nearly hit the roof. Turns out when you provide frictionless capacity via the hypervisor, virtual machine deployment, and variable cost payment, demand explodes. Trust me.

Bottom line, we are all facing an impending tsunami of VMs unleashed by an unprecedented liquidity in system capacity which is enabled by hypervisor based cloud computing. When the virtual machine becomes the unit of application management, extending the legacy, horizontal approaches for management built upon the concept of a physical host with a general purpose OS simply will not scale. The costs will skyrocket.

The new approach will have vertical management capability based upon the concept of an application as a coordinated set of version managed VMs. This approach is much more scalable for 2 reasons. First, the operating system required to support an application inside a VM is one-tenth the size of an operating system as a general purpose host atop a server. One tenth the footprint means one tenth the management burden – along with some related significant decrease in the system resources required to host the OS itself (memory, CPU, etc.). Second, strong version management across the combined elements of the application and the system software that supports it within the VM eliminates the unintended consequences associated with change. These unintended consequences yield massive expenses for testing and certification when new code is promoted from development to production across each horizontal layer (OS, middleware, application). Strong version management across these layers within an isolated VM eliminates these massive expenses.

The VM tsunami is coming. I'm just happy to have my trusty rPath surfboard tethered to my ankle. It's going to be the ride of a lifetime.

Is the Cloud Game Already Over?

This is the thought that crossed my mind a few weeks back as I pondered Amazon's beta release of the Amazon Web Services Console. The reason the game might be over is because Amazon is apparently so far ahead of the competition that they can now divert their engineering attention to the management console instead of core platform functionality. To me, this signals a competitive lead so vast that absent quick and significant re-direction of resources and potential strategic acquisitions of capability, Amazon's competitors are doomed in the cloud space.

I saw this dynamic once before during my time at Red Hat. Red Hat had such a lead in the market with almost total mind share for the platform (Red Hat Linux, now Red Hat Enterprise Linux), that the company could launch a strategic management technology, Red Hat Network, while others were grasping for relevance on the core platform. Note that in the case of Red Hat, no one else has come close to their lead in the Linux market space. And no one else has really gotten around to building out the management technology that was offered by Red Hat Network 8 years ago.

Consider these other challenges facing Amazon's competitors:

1. Lack of machine image definitions - Amazon published the AMI spec for EC2 about 2 years ago. To my knowledge, all of the competitors that use virtualization (Amazon uses Xen) are still requiring customers to boot a limited set of approved "templates" which must then be configured manually, and subsequently lose their state when retired.

2. Proprietary versus open - when you require the customer to program in a specific language environment that is somewhat unique to a particular "cloud" platform (ala Google with Python and Salesforce with Apex), you dramatically limit your market to virtual irrelevance out of the gate. Amazon doesn't care, so long as you can build to an X86 virtual machine.

3. Elastic billing model - until you have a platform for billing based upon the on-demand usage of resources, you don't have a cloud with the key value proposition of elasticity. You simply have hosting. To my knowledge, most competitors are still on a monthly payment requirement. Hourly is still a long way away for these folks.

Perhaps I am wrong, but I bet I am not. If I am right, the day will come in the not too distant future (after the equity markets recover) when Amazon spins out AWS as a tracking stock (similar to the EMC strategy with VMware) with a monster valuation (keeping this asset tied to an Amazon revenue multiple makes no sense), and the valuations on the technology assets that help others respond to Amazon go nutty (witness the XenSource valuation on the day VMware went public). I say "Go, Amazon, Go!"

Amazon Aims for Enterprises - Poo Poos Internal Clouds

Amazon's announcement yesterday regarding an enterprise feature for linking existing datacenter operations to Amazon's AWS via a Virtual Private Network feature did not surprise me. It is an obvious extension of their value proposition, and folks had already been accomplishing a similar capability with work-arounds that were simply a bit more cumbersome than Amazon's integrated approach. The more surprising piece of news, in my opinion, is the subtle racheting up of the rhetoric by Amazon regarding their disdain for the notion of “internal” cloud. Werner Vogels blog post explaining the rational for the new VPN features is a case in point. Here are a few tasty excerpts:

Private Cloud is not the Cloud

These CIOs know that what is sometimes dubbed "private [internal] cloud" does not meet their goal as it does not give them the benefits of the cloud: true elasticity and capex elimination. Virtualization and increased automation may give them some improvements in utilization, but they would still be holding the capital, and the operational cost would still be significantly higher. . . .

What are called private [internal] clouds have little of these benefits and as such, I don't think of them as true clouds. . .

[Cloud benefits are]

* Eliminates Cost. The cloud changes capital expense to variable expense and lowers operating costs. The utility-based pricing model of the cloud combined with its on-demand access to resources eliminates the needs for capital investments in IT Infrastructure. And because resources can be released when no longer needed, effective utilization rises dramatically and our customers see a significant reduction in operational costs.

* Is Elastic. The ready access to vast cloud resources eliminates the need for complex procurement cycles, improving the time-to-market for its users. Many organizations have deployment cycles that are counted in weeks or months, while cloud resources such as Amazon EC2 only take minutes to deploy. The scalability of the cloud no longer forces designers and architects to think in resource-constrained ways and they can now pursue opportunities without having to worry how to grow their infrastructure if their product becomes successful.

* Removes Undifferentiated "Heavy Lifting."The cloud let its users focus on delivering differentiating business value instead of wasting valuable resources on the undifferentiated heavy lifting that makes up most of IT infrastructure. Over time Amazon has invested over $2B in developing technologies that could deliver security, reliability and performance at tremendous scale and at low cost. Our teams have created a culture of operational excellence that power some of the world's largest distributed systems. All of this expertise is instantly available to customers through the AWS services.

Elasticity is one of the fundamental properties of the cloud that drives many of its benefits. While virtualization has tremendous benefits to the enterprise, certainly as an important tool in server consolidation, it by itself is not sufficient to give the benefits of the cloud. To achieve true cloud-like elasticity in a private cloud, such that you can rapidly scale up and down in your own datacenter, will require you to allocate significant hardware capacity. While to your internal customers it may appear that they have increased efficiency, at the company level you still own all the capital expense of the IT infrastructure. Without the diversity and heterogeneity of the large number of AWS cloud customers to drive a high utilization level, it can never be a cost-effective solution.

OK. Let's examine Werner's sales proposition without the pressure to sell anything (as I am not currently trying to sell anyone anything). Clearly, Amazon is now attacking the vendors such as VMware that seem intent on attacking them by proclaiming that Amazon cannot give you enterprise features. Not only is Amazon delivering features targeted at the enterprise, but they are also scaling up the war of words by poo pooing the value proposition of these classic vendors – namely the notion of an internal cloud. Werner makes two assertions in dissing internal clouds:

First, he asserts that an internal cloud is not elastic. Well, why not? Just because your IT department has historically been labeled the NO department doesn't mean that it always must be that way. Indeed, the very pressure of Amazon providing the terrific services they provide without the mind-numbing procurement and deployment friction of your IT department is going to lead to massive changes on the part of IT. They are going to virtualize, provide self provisioning tools, and more closely align business application chargebacks to actual application usage. If the application owners are thoughtful about their architecture, they will be able to scale up and scale back based upon the realities of demand, and their IT transfer costs will reflect their thoughtfulness. Other business units will benefit from the release of resources, and server hoarding will be a thing of the past. All this is not to say that an IT department should “own” every bit of compute capacity they use. They don't. They won't. And there will probably be an increasing shift toward owning less.

But Werner claims that ownership is generally a bad thing in his second assertion that capex is bad and opex is good. Werner writes that cloud eliminates costs by eliminating capital spending. Well, it might - depending on the scenario. But his insinuation that capex is bad and opex is good is silliness. They are simply different, and the measurement that any enterprise must take is one relating to risk of demand and cost of capital. For a capital constrained startup with high risk associated with application demand, laying out precious capital for a high demand scenario in the face of potential demand failure makes no sense at all. However, for a cash rich bank with years of operating history relative to the transaction processing needs associated with servicing customer accounts, transferring this burden from capital expense to operating expense is equally senseless. Paying a premium for Amazon's gross profit margin when demand is fairly deterministic and your cost of capital is low is certainly a losing proposition.

The challenge and the opportunity of cloud for any enterprise is moving applications to an architecture that can exercise the cloud option for managing demand risk while simultaneously striking the right balance between capex and opex relative to the cost of capital. I find it funny that Amazon's new VPN feature is designed to make this opportunity a reality, while the blog post of their CTO announcing the feature proclaims that internal operations are too costly. Maybe they are viewing the VPN as a temporary bridge that will be burned when capex to opex nirvana is attained. Personally, I see it as the first of many permanent linkages that will be built to exercise the cloud option for managing demand risk. Lower costs associated with a proper portfolio balance of capex and opex is just icing on the cake.

A Walk in the Clouds

Yesterday, Google and IBM announced that they plan to invest $30 million to promote the concept of “cloud” computing. In the coming months, I believe we will see more and more infrastructure companies follow the Amazon lead and announce or deliver “cloud” services similar to the Elastic Compute Cloud (EC2). The timing for these initiatives is right because high performing hypervisor technology from companies like VMware and XenSource (Amazon uses Xen to enable EC2) makes it possible to separate the infrastructure definition from the application server definition. The infrastructure is the “cloud” and the application server definition is a virtual appliance or a Virtual Appliance Network (VAN).

I believe the availability of high quality, low cost infrastructure provided as an on-demand, variable cost service with no restrictive assumptions regarding the application server platform (such as those required by Sun's languishing grid compute offering with its 198 page developer guide) is going to dramatically improve the quality and cost of server applications.

The quality will be higher because application companies will no longer invest huge portions of their research and development budget slogging through the “muck” (Jeff Bezos' term) of infrastructure planning (multi-platform porting/testing, SaaS enablement build-out, custom infrastructure deployment at customer sites, etc.). Instead, they can focus on application features that improve the value of the application for the customer. The cost will be lower because customers can “right scale” their infrastructure for the basic needs of their business with an ability to “expand” into the cloud for the high demand cases. For some customers, this will mean zero investment in fixed assets. For others, some mix of on-premise plus “cloud” capacity will be correct.

There are still problems to be solved, but I believe they are manageable. For example, there is currently no well defined way for a VAN of virtual servers (security, web, app, data, etc.) that form a complete application solution to be defined in a manner that makes the VAN completely portable across “clouds” while preserving the “rules” that govern the interrelationships among the various virtual appliances in the VAN. The OVF specification and the capability in the rBuilder platform from my company rPath are both early steps in the right direction, but there is still much work to be done in this area of “contextualization” and cloud portability. Eliminating the “seams” between clouds will be a key piece of work that enables the benefits of this new model.

In spite of the barriers, new solutions will still arrive. Just today, KnowledgeTree, a small, innovative company based out of South Africa, announced the availability of their on-demand offering, KnowledgeTreeLive, which utilizes Amazon's EC2 for application availability. KnowledgeTree has architected the solution using multiple virtual appliances running on EC2 in a manner that provides high availability and data protection for the customer's document management solution. Their only “infrastructure” investment was the “brain power” to design the solution. No more playing around in the “muck” for KnowledgeTree or their customers. Sounds like a “walk in the clouds” is going to be good for all of us.

VMware Accelerates Cloud with Free ESX

The new CEO of VMware, Paul Maritz, seems to be committed to establishing VMware technology as the basis for emerging compute cloud offerings that enable shared, scalable infrastructure as a service via hypervisor virtualization. With Amazon EC2, the poster child for the successful compute cloud offering, being based upon the competing Xen technology from Citrix, Maritz is losing no time staking claim to other potential providers by meeting the Xen price requirement – zero, zilch, nada, zip. I love it. Low cost drives adoption, and free is as good as it gets when it comes to low cost and adoption.

As the economics of servers tilt more and more toward larger systems with multi-core CPUs, the hypervisor is going to become a requirement for getting value from the newer, larger systems. Developers simply do not write code that scales effectively across lots of CPUs on a single system. The coding trend is toward service oriented architectures that enable functions as small, atomic applications running on one or two CPUs, with multiple units deployed to achieve scalability. Couple the bigger server trend with the SOA trend with the virtualization trend with the cloud trend, and you have a pretty big set of table stakes that VMware does not want to miss. If a hypervisor is a requirement, why not use VMware's hypervisor if it is free?

The only challenge with free in the case of VMware is going to be lack of freedom. Xen currently offers both free price and freedom because of its open source heritage. If I run into a problem with VMware's ESX, my only recourse is to depend on the good will of VMware to fix problems. With Xen, I have the option of fixing my own problem if I am so inclined and capable. It will be interesting to watch the hypervisor choices people make as they build their cloud infrastructures, both internally and for commercial consumption, based upon the successful Amazon EC2 architecture.

Hypervisor Certification Crossroads

My last blog post, Certification “aka Some Assembly Required,” stirred up an interesting brew of fan mail. It seems that I wrote what lots of people have been thinking when I proclaimed that certification is a weak promise at best -- a hoax at worst -- with most customers spending 6X their license costs on installation, maintenance, and administration of “certified” software. The pity of this whole situation is that software vendors are also paying a high price for the myriad of customer preferences regarding middleware and operating systems. And the price is about to get a lot steeper.

Applications vendors will soon find themselves at a crossroads. They must either embrace virtual appliances (with certification to the hypervisors as the critical element), embrace SaaS ala Salesforce.com as their only distribution approach (where customers get no choices regarding infrastructure or even features for that matter), or brace for an enormous expense uptick in certification costs when they must begin including all of the hypervisor products as additional customer preference items required for testing.

The certification gauntlet that application vendors have historically run in order to deliver their application to the widest possible market is often referred to as “the matrix of pain.” For every element in the stack that might be a customer preference – OS, application server, web server, database – and for every release of these elements, the application vendor creates a row and a column. Each intersecting cell above the diagonal represents a configuration to be tested as part of the R&D expense associated with release engineering. Of course the testing never occurs in the exact configuration of elements for a given customer situation, but some testing is better than none.

And, theoretically, each maintenance update of each element requires re-testing. Of course, no application vendor actually does this testing because they simply cannot afford to do it. As it is, certification gobbles up 40 – 50% of R&D expenditures (not to mention the customer service burden associated with customer variability). Don't believe me? Why do you suppose salesforce.com spends 8 – 9% of revenue on R&D for a pretty rich CRM application when most software companies spend 15 – 18%? Salesforce.com only certifies to ONE infrastructure – their own datacenter infrastructure. And they bring every customer along with every release of software so they do not have the testing expense associated with maintaining legacy code on new platforms or vice versa.

Now, with hypervisors providing customers with so much value and flexibility as the layer that abstracts the hardware from the application, vendors are going to be pushed by their customers to certify their applications against all of the popular hypervisors. And, with such a hot category, there will be lots of technology development and lots of releases. That means lots of NEW columns and rows for the “matrix of pain.” If you thought 40 – 50% of your R&D budget was painful because it sucked the wind out of new feature development, wait until that number climbs to 60 – 70% when you throw in another layer for the hypervisor. Add some more to those costs when customers start demanding that you also support Amazon's EC2 and other similar services like IBM's Blue Cloud.

Had enough? Ready to cry “UNCLE?” Better get busy figuring out how to deliver your application as a virtual appliance. For those virtual appliances, you will STILL need to release and test against the hypervisor products -- VMware, Citrix' XenSource, Microsoft's pending Hyper-V -- along with all of the “cloud” computing services that are going to emerge to compete with Amazon's EC2. Better choose your virtual appliance infrastructure provider wisely to accommodate these customer choices in the market (shameless plug for rPath).

No doubt customers will initially object to some limitation of choice regarding the elements that support the application when you wrap it all up and deliver it with a bow on top as a virtual appliance, but these are the same customers that are going to drive you to embrace hypervisors in your testing matrix. Give them a tradeoff – virtual appliances that are cheap and easy to install, maintain, and administer, or the old fashioned way with a $250,000 per year support uplift to cover your expense for navigating their “matrix of pain.” Standing at this expense crossroads, I bet they make the same decision you should make as you stand at the hypervisor certification crossroads today -- “Let's give that virtual appliance a try.”

Will Managing VM Sprawl lead to Rogue Cloud Deployments?

I just read an interesting article regarding the potential cost pitfalls associated with VM sprawl. Jett Thompson, an enterprise computing architect from Boeing, has developed a cost model regarding the benefits of virtualization and the related pitfalls of VM sprawl. It seems that virtualization is easy to justify, so long as you don't give the users everything that they want. Here is the money quote from the article:

However, all of those savings [from virtualization] can be eliminated if sprawl isn't controlled. With virtual servers easy to spin up, users may ask for large numbers of new virtual machines and it's up to IT to hold the line, Thompson says.

"If you don't have demand management and good governance in place you're actually going to cost your company money," he says. "Virtual server sprawl can wipe out any savings."

Gartner analyst Thomas Bittman also says virtual server sprawl can be tough to control and is harder to measure than physical server sprawl. "Fundamentally, we believe virtualization sprawl can be a much bigger problem than physical sprawl," Bittman said

I believe that the unintended consequences of "IT hold[ing] the line" will be rogue cloud deployments. Rogue cloud deployments describes the phenomenon of business unit developers taking matters into their own hands when IT "holds the line" on making computing resources available. Once the business units understand that resources can be made available on-demand, either internally or via services such as Amazon EC2, they are simply not going to take "no" for an answer. Deploying applications as virtual machines, or virtual appliances in the case of an ISV application, removes all of the friction from the deployment process. This same friction was formerly the tonic that IT sprinkled about in order to "hold the line" on availability (and the subsequent management costs) of computing resources. The instant gratification culture that we are cultivating with SaaS and cloud will not be held in check if IT "holds the line" by saying "no" to requests for capacity/capability.

I have a recommendation for Jett and the folks at Boeing and elsewhere who are fearing the unintended consequences of frictionless system capacity brought about by virtualization. Push the control point for deployment policy upstream via automated build, release, and management processes for applications released as virtual machines, manage the scale problem by going vertical with a JeOS architecture, and build a seamless bridge managed by IT to cloud offerings like Amazon EC2. Charge the users with the costs for deployment and management, but give them the technology to do it the right way. Check out our cloud computing adoption model and the webinar that accompanies it. Rogue cloud deployments can be avoided, even in the face of VM sprawl control measures, when you say "yes" to your users while holding them accountable for building manageable system images.

Maintenance Woes Handicap Microsoft's Azure

Last week, Microsoft product manager Steve Martin indicated in his blog that Azure would be a Microsoft-only service – hosted only by Microsoft in Microsoft data-centers. It seems that maintenance challenges, or the ability to “innovate freely,” are limiting the availability of Azure to a pure service play. To be fair, Microsoft has indicated that key technology developed to support Azure will find its way into Microsoft Windows server products, which, of course, can be purchased and deployed by anyone. But I have serious doubts about Microsoft as a service provider because I do not think they have the operational mentality to succeed on the margins that are available to service providers – they are not cheap and efficient like Amazon. Microsoft is already demonstrating that the ties to their past technology architecture are already handicapping the potential success of their future cloud endeavors.

Anyone that pays attention to my musings in this blog knows that I am a huge fan of Amazon's web services – particularly the elastic compute cloud (EC2). And I believe Amazon is going to be very successful in this space because they have led the way with an architecture that effectively de-couples the definition of the application from the definition of the compute resources. Plus, they have an operational mentality – they are cheap and efficient. Aside from Amazon, I believe the really big winners are going to be the technology companies that enable existing service providers to respond to Amazon with a technology model that loosely couples applications to the infrastructure - eliminating the complex maintenance challenges that have historically precluded elasticity and enabling seamless application delivery across public and private clouds. Here are some of the potential players and my handicap for their success.

VMware – I believe virtualization technology is going to play a critical role in cloud due to its ability to de-couple the applications from the host computers – enabling elegant maintenance and true elasticity. VMware is certainly the leader in this space, and there is little doubt that they have relevant technology. The key question is going to be their willingness to respond to the “cheapness” and “openness” requirement of the service providers. VMware has historically sold technology to enterprises in a typical perpetual software licensing model. Cloud will require much more sharing of risk/reward in the sales model and a willingness to be flexible in the technology requirements to co-innovate with the service providers and ecosystem partners. VMware is not known for its partnering mentality.

Citrix – Xen is currently the incumbent technology for virtualization at Amazon, and Citrix is clearly aligned with Xen due to their $500M purchase of XenSource. However, cloud to date seems to be all about Linux and related open source infrastructure due to the flexibility of the licensing model, and Citrix has historically been very tightly aligned to Microsoft and its associated technology and licensing model. I think it is an open question whether Citrix is willing to embrace a radically different business model to monetize Xen as part of a service provider cloud ecosystem.

Cisco – the announcement earlier this month about the Cisco unified computing system is all about a new brand of infrastructure that is unencumbered by the legacy approach which tightly couples applications to the compute host resources. I believe Cisco “gets it” much more so than the current mega-vendors HP and IBM – each of which is going to be hampered with the legacy approaches for application delivery and management. But, as is always the case with new ventures like Ciscos unified computing system, the sky is always bluest when there is nothing yet to lose. We'll see if they can actually execute in the market with a new model.

Microsoft – While Microsoft certainly has many strengths, I do not think any of them lend themselves particularly well to cloud success. Of all vendors, they have the most to lose, and the least to gain, with this new approach. Their sales and distribution model discourages elasticity, they are way behind the leaders in the market for virtualization technology, and they do not have a mindset to be operationally efficient as a service provider. I believe their biggest opportunity in cloud is to provide a new desktop approach that seamlessly integrates all of the services a user would expect to be effective and productive in a networked world. If Apple doesn't continue to run away with that opportunity, maybe Microsoft will make some hay in this space.

Google – I have criticized Google again and again for their AppEngine model that essentially requires application providers to recode their applications to fit Google's infrastructure. I actually do not think Google wants to be a big cloud player for “infrastructure” services in the manner that Amazon is currently defining the market. Instead I think Google is going to be a next generation application platform provider more in the mold of Apple with its consumer products, but geared more to the needs of the business user. As a giant SaaS platform for applications like email, office productivity, VOIP, calendaring, geographical services, etc., I think Google has a great play with their current approach. Just don't expect them to compete with Amazon in the infrastructure space.

Salesforce.com – I think Salesforce.com is completely out in left field for everything other than applications that need to reside close to their CRM application. I personally feel that Marc should just go ahead and take on SAP and Oracle in the business applications space and forget about trying to morph their highly proprietary application platform into a general purpose application delivery platform. They have a terrific sales team, a terrific customer base, and the competing applications from Oracle, SAP, and others are just awful in terms of the grief customers endure to maintain and support them.

EMC – Some folks may be a bit puzzled by the inclusion of EMC in this list of potential cloud players, but remember that EMC owns nearly 90% of VMware which means that cloud is definitely top of mind at EMC. And they actually have been thinking about the data problem associated with cloud. Namely, how do I ensure my data is available to my applications when they become portable across multiple compute service providers? Their Atmos product is effectively Amazon S3 in a box with some interesting features around policy management and data federation. As an equity play, EMC may be a cheap way to own VMW, and they might make some hay themselves if they execute in the cloud market ahead of the other storage providers.

The rest of the A-list technology providers – HP, IBM, Oracle, Red Hat, Sun – either do not get cloud, are actively bashing it (witness Oracle), have no assets that are currently relevant, or are so far behind in investing that, short of a series of acquisitions, I believe they will remain effectively irrelevant. Of course there will be lots of lip service and cute marketing tricks such as IBM's recent open cloud manifesto, but until there is some substance, I stand by the above handicaps.

Cloud Computing Casts Shadow on Walled Gardens

As a technology provider that helps application companies embrace cloud computing by virtualizing the applications to run on any cloud, I was a bit disappointed with Google's appengine announcement. It appears that Google is embracing the “walled garden” approach of salesforce.com and Microsoft instead of the cloud approach of Amazon. I believe that walled gardens will ultimately be overshadowed by clouds because you cannot achieve webscale computing if every application has to run on a server owned by Google.

Historically, Google has been very good about providing APIs that enable applications to access its web services independent of the computer on which they run. This is an important concept because it is often the case that an application needs to run on a particular network or network segment in order to preserve some critical aspect of performance or security. It is also important because it provides developers with the broadest choice of system and programming tools when developing or maintaining their applications. If you must program the application in the Python implementation specified by Google and run it on a Google server in order to take advantage of services like BigTable and Sawzall, a huge segment of the application market has just been eliminated from consideration (note that it is unclear to me at this time if Big Table and Sawzall can be accessed independent of appengine).

Why not simply expose a virtual machine API (such as Amazon Machine Image) along with the API for the web services (such as Amazon's S3, SQS, etc.)? Application instances that require minimal latency to Google services are provisioned as virtualized appliances on a Google server. For applications that need to run on a different network, you can provision the same system definition to that network while accessing the web services over the Internet. Write the program in any language you choose. With any set of system components that you choose.

The problem with walled gardens is that they ultimately restrict the growth of the market. While it is true that an attractive and well manicured walled garden will result in asymetrically large economic rent for the owner of the garden (witness Microsoft), the size of the market is nonetheless constrained. It seems to me that Google would reap the greatest benefit from maximizing the market for cloud applications quickly – independent of their ability to collect an asymetrically large portion of the rent from that market. Even their marketing of the current implementation of appengine indicates this hypothesis is correct – it is free. Success with cloud computing will no doubt lead to a decline in the value of the Microsoft system software franchise (the ultimate walled garden). Why not accelerate that decline with broad market capability instead of yet another walled garden (YAWG)?

Let me provide a concrete example. rPath was approached by a SaaS application provider to help them release their on-demand application as an on-premise application – without sacrificing management control of the system software. They want on-premise capability in order to meet the data security requirements of a certain segment of the market which they have been unable to penetrate with their SaaS offering. Their current application runs on Microsoft server technology, but it is written in Java so skipping out of the Microsoft walled garden was pretty trivial. We provided them with a virtualized implementation of their application, and we demonstrated how it could run on a local network atop a hypervisor, or as a variable cost implementation on Amazon's elastic compute cloud (EC2). Their reaction was so positive that they are now planning to gradually migrate their entire infrastructure from Microsoft to virtual infrastructure in order to seamlessly deliver the application via SaaS, variable cost cloud (Amazon), and local network (virtual appliance). Without changing their preference for programming language. Without sacrificing control of the system software layer.

To be fair to Google, appengine is a beta service. I have no doubt that they made compromises in architecture in order to get the service out the door more quickly. I hope they follow Amazon's lead and expose all of their great services as true web services while enabling any application to run close to those services via a simple virtualization spec such as Amazon's AMI. The faster we take the market to cloud computing, the sooner we can kill off the walled gardens through webscale shadows that deprive them of economic sunlight.

Microsoft Embraces Linux Virtual Appliances

In a very savvy move aimed at gaining competitive advantage in the cloud computing space, Microsoft yesterday announced that they were contributing source code to the Linux kernel in order to optimize the performance and management of virtual appliances on Microsoft's hypervisor, Hyper-V. One of the goals of cloud computing is elasticity – applications scale up and down based upon the hour by hour demand for the application. Well, you cannot have hour by hour elasticity for an application when it takes days/weeks/months to install, provision, and instrument the application onto the infrastructure. Virtual appliances eliminate this challenge by allowing the application owner to pre-configure the application as a set of virtual machines that are ready to respond to demand. The “set-up” is done “off-line.” Microsoft, realizing that Linux is the de facto underpinning for virtual appliances that run on Amazon's EC2, is now contributing code to Linux that will optimize the performance and management characteristics of Linux-based virtual appliances on Hyper-V – the virtualization technology that underpins Microsoft's Azure cloud.

Microsoft's new status as a Linux kernel contributor sheds light on the amazing shift that is occurring in the battle-lines for IT infrastructure. The operating system is going to split, with one half becoming the control software for the hardware (the hypervisor) and the other becoming the control software for the application (virtual appliances). Given their huge advantage with developers based upon the installed base of applications that run on Microsoft-only application frameworks (.Net, etc.), Microsoft has determined that they need to pull out all of the stops in order to be certain they do not get ripped off the hardware in favor of VMware (the dominant hypervisor) or Xen (the hypervisor that supports Amazon's market leading cloud service). Linux is no longer the biggest threat to Microsoft in the datacenter when datacenters begin embracing a cloud architecture such as Amazon's in order to enable IT-as-a-Service.

If indeed this move enables higher elasticity and simpler management of Linux based virtual appliances that run atop Hyper-V, the competitive pressure might force VMware to follow suite and make their drivers and tools available as source code that is included in the Linux kernel. To be clear, Microsoft does not currently plan to support Linux virtual appliances on Azure, but that position may be shifting with changes of this type. With Amazon currently holding the dominant position in cloud and with VMware holding the dominant position in the datacenter for virtualization, Microsoft might have lots of crafty tricks up its sleeve to re-assert themselves in this new theater of datacenter war where hypervisors and virtual appliances rule the day.

IBM CloudBurst Hits the Mark

IBM rolled out a new infrastructure offering called CloudBurst last week. Aimed at development and test workloads, it is essentially a rack of x86 systems pre-integrated with VMware’s virtualization technology along with IBM software technology for provisioning, management, metering, and chargeback. I believe IBM, unlike Verizon, has hit the cloud computing mark with this new offering.

First, IBM is targeting the offering at a perfect application workload for cloud – development and test. The transient nature of development and test workloads means that an elastic computing infrastructure with built-in virtualization and chargeback will be attractive to IT staff currently struggling to be responsive to line of business application owners. The line of business application owners are holding the threat of Amazon EC2 over the head of the IT staff if they cannot get their act together with frictionless, elastic compute services for their applications. By responding with a development and test infrastructure that enables self-service, elasticity, and pay-as-you-go chargeback capability, the IT staff will take a step in the right direction to head off the Amazon threat. Moving these dev/test workloads to production with the same infrastructure will be a simple flick of the switch when the line of business owners who have become spoiled by CloudBurst for dev/test complain that the production infrastructure is not flexible, responsive, or cost competitive.

Second, IBM embraced virtualization to enable greater self-service, and elasticity. While they do not detail the use of VMware’s technology on their website (likely to preserve the ability to switch it out for KVM or Xen at some future date), IBM has clearly taken an architectural hint from Amazon by building virtualization into the CloudBurst platform. Virtualization allows the owners of the application to put the infrastructure to work quickly via virtual appliances, instead of slogging through the tedious process of configuring some standard template from IT (which is never right) to meet the needs of their application – paying for infrastructure charges while they fight through incompatibilities, dependency resolution, and policy exception bureaucracy. CloudBurst represents a key shift in the way IT will buy server hardware in the future. Instead of either a bare-metal unit or pre-loaded with a bloated general purpose OS (see the complaint about tedious configuration above), the systems will instead come pre-configured with virtualization and self-service deployment capability for the application owners - a cloud-computing infrastructure appliance if you will. Cisco has designs on the same type capability with their newly announced Unified Computing System.

Third, it appears that IBM is going to announce a companion service to the CloudBurst internal capability tomorrow. From the little information that is available today, I surmise that IBM is likely going to provide a capability through their Rational product to enable application owners to “federate” the deployment of their applications across local and remote CloudBurst infrastructure. With this federated capability across local (fixed capital behind the firewall) and remote sites (variable cost operating expense from infrastructure hosted by IBM), the IBM story on cloud will be nearly complete.

The only real negatives I saw in this announcement were that IBM did not include an option for an object storage array for storing and cataloging the virtual appliances, nor did they include any utilities for taking advantage of existing catalogs of virtual appliances from VMware and Amazon. While it probably hurt IBM’s teeth to include VMware in the offering, perhaps they could have gone just a bit further and included another EMC cloud technology for the object store. Atmos would be a perfect complement to this well considered IBM cloud offering. And including a simple utility for accessing/converting existing virtual appliances really would not be that difficult. Maybe we’ll see these shortcomings addressed in the next version. All negatives aside, I think IBM made a good first showing with CloudBurst.

Will Agile drive a Hybrid Cloud Approach?

Some workloads are perfectly suited for cloud deployment. Generally, these are workloads with transient or fluctuating demand, relatively static data (lots of reads, few writes), and no regulated data compliance issues (i.e. patient healthcare records). Test fits this description perfectly – especially with the growing popularity of Agile methods. With its focus on rapid iteration and feedback to achieve faster innovation and lower costs, Agile demands a flexible and low cost approach for testing cycles. I have no doubt that developers will begin using variable-cost compute cycles from services like Amazon EC2 because of its flexibility and pay-for-what-you-use capability. But I am also willing to bet that testing with Amazon will put further pressure on the IT organization to respond with a similar, self-service IT capability. I think a hybrid-cloud architecture with complementary internal and external capability will emerge as a productive response to the demand for true end-to-end agility.

Some time ago, I authored a blog post titled “When Agile Becomes Fragile” that outlined the challenge of implementing Agile development methods while attempting to preserve the legacy IT approach. What good is rapid development when the process for promoting an application to production takes several months to absorb even a few weeks of new development? If developers take their Agile methods to the cloud for testing (which they will), it becomes a slippery slope that ultimately leads to using the cloud for production. Rather than the typical, dysfunctional IT response of “don't do that – it's against policy,” I think the IT organization should instead consider implementing production capacity that mimics and complements cloud capability such as that offered by Amazon.

Along with all of the cool technology that is emerging to support Agile methods, new technology and standards are also emerging to support the notion of a hybrid-cloud. The new Atmos storage technology from EMC and the OVF standard for virtualizing applications are two good examples of hybrid-cloud technology. Atmos gives you the ability to describe your data in a manner that automatically promotes/replicates it to the cloud if it has been approved for cloud storage/availability. Whether applications run on an external cloud or on your “internal cloud,” the supporting data will be available. Similarly, OVF has the potential to enable virtualized applications to run effectively externally on the cloud or internally – without significant manual (and error prone) intervention by system administrators (or those developers that play a sysadmin on a TV show). In both cases, the goal is to enable greater flexibility for applications to run both internally and on the cloud – depending on the profile of the application and the availability of resources.

Agile is yet another important technology change that is going to pressure IT to evolve, and rPath is sponsoring a webinar series that dives into this topic in some detail. Whether you are a developer, an architect, or a system administrator, these webinars should be interesting to you. For the IT staff, the series may offer a glimpse at an approach for IT evolution that is helpful. In the face of Agile and cloud pressure, the alternative to evolution – extinction – is much less appealing.

Will the Credit Crunch Accelerate the Cloud Punch?

It's no secret that the days of cheap capital might be over. While it is obvious that startups with lean capital structures are already embracing cloud offerings such as Amazon EC2 for computing and S3 for storage, it seems to me that this trend might accelerate further for both startups and even enterprise customers.

Cloud consumption in the startup segment is poised to accelerate as investors like Sequoia Capital warn their portfolio companies to “tighten up” in the face of this credit crunch. Even the well capitalized SaaS software providers might begin re-considering the “ridiculous” expense of building out their offerings based upon the classic salesforce.com model of large scale, proprietary datacenters with complex and expensive approaches to multi-tenancy. They might be better served by a KnowledgeTree model where on-demand application value is delivered via virtual appliances. In this model, the customer can deploy the software on existing gear (no dedicated server required) because the virtualization model makes for a seamless, easy path to value without setup hassles. Or they can receive the value of the application as a SaaS offering when KnowledgeTree spins up their instance of the technology on Amazon's elastic compute cloud. In both cases, the customer and KnowledgeTree both avoid the capital cost of acquiring dedicated gear to run the application.

Large enterprises as well will be re-considering large scale datacenter projects. When credit is tight, everyone from municipal governments to the best capitalized financial institutions must find ways to avoid outlays of precious capital ahead of the reality of customer collections. More and more of these customers will be sifting through their application portfolio in search of workloads that can be offloaded to the cloud in order to free up existing resources and avoid outlays for new capacity to support high priority projects. Just as the 9/11 meltdown was a catalyst for the adoption of Linux (I witnessed this phenomenon as the head of enterprise sales at Red Hat), a similar phenomenon might emerge for incremental adoption of cloud associated with the credit crunch of 2008. All new projects will be further scrutinized to determine “Is there a better way forward than the status quo?”

As enterprises of all sizes evaluate new approaches to minimize capital outlays while accelerating competitive advantage via new applications, rPath is offering a novel adoption model for cloud computing that might serve as a convenient bridge to close the credit crunch capital gap. For those that are interested in exploring this new model, pleas join us in a webinar along with the good folks at Forrester, Amazon, and Momentum SI on October 23rd. If necessity is the mother of invention, we might be poised for some truly terrific innovations in the cloud space . . . . and we will owe a debt of gratitude to the credit crunch for driving the new architecture forward.

Shut Down the Datacenter

Or at least power down significant pieces of it during periods of low demand. This message always draws funny looks from IT types when I suggest a seemingly simple answer to the problem of extreme costs for datacenter resources. I push on:

Billy – If utilization is around 20 – 30%, aren't there periods of time when you could just shut down about 50% of the systems? Or at least 25%?

IT – We can't just shut the systems down. . .

Billy – Why not? You aren't using them.

IT – You don't understand.

Billy – What am I missing?

IT – Well, it just doesn't work that way.

Billy – How does it work?

IT – It takes a long time to lay the application down atop a production server.

Billy – Why?

IT – Set up is complicated. Laying down the application and bringing it online can take several days, typically 2 to 4 weeks.

Billy – So part of the application definition is described by the physical system it runs on?

IT – Yes, that's right. If I shut down the physical system, I lose part of the definition and configuration of the application.

And therein lies the culprit. The “last mile” of application release engineering and deployment is a black art. Applications become tightly coupled to the physical hosts upon which they are deployed, and the physical hosts cannot be powered down without losing the definition of a stable application. Bringing the application back up is expensive due to the high costs of expert administration resources, and it is fraught with peril because the process is not repeatable. Enterprises are spending billions of dollars on datacenter operating costs because the risk of bring applications back on-line is not worth the savings of taking them off-line.

Of course I blame most of this mess on the faulty architecture of the One Size Fits All General Purpose Operating System (OSFAGPOS). OSFAGPOS is typically deployed in unison with the physical hosts because OSFAGPOS provides the drivers that enable the applications to access the hardware resources. To get an application to run correctly on OSFAGPOS, the system administrators then need to “fiddle with it” to adjust it to the needs of any given application. This “fiddling” is where things run amok. It's hard to document “fiddling,” and it is therefore difficult to repeat “fiddling.” The “fiddle” period can last for up to 30 days, depending on the complexity of the “fiddling” required.

So how do we get away from all of this “fiddling” around, and deploy an architecture that allows the datacenter to scale up and down based on actual demand? Start with a bare metal hypervisor as the layer that provides access to the hardware. Then extend release engineering discipline to include the OS by releasing applications as virtual machines with Just Enough OS (JeOS or “juice”) in lieu of OSFAGPOS, complete with all of the “metadata” required to access the appropriate resources (memory, CPU, data, network, authentication services, etc.). By decoupling the definition of the application from the physical hosts, a world of flexibility becomes possible for datacenter resources. Starting up applications becomes fast, cheap, and reliable. As an added bonus, embracing cloud capacity such as that provided by Amazon's EC2 becomes a reality. Instead of standing up application capacity in-house, certain peak demand workloads can be deployed “on-demand” with a variable cost model (in the case of Amazon it starts at about $.10/CPU/hr).

With oil trading at around $140 per barrel, the cost of allowing datacenter resources to “idle” during slow demand periods is becoming a real burden. “Fiddling around” with applications to get them deployed on OSFAGPOS is no longer just good clean fun for system administrators. It is serious money.

It's Amazing . . . It's Ridiculous

Earlier this week I attended the Sandhill.com Software 2007 trade show, and I was delighted to hear Marc Benioff make the following proclamation during his keynote address:

“It's amazing the amount of money we spent to be able to deliver the salesforce application in a SaaS model. In fact, it's ridiculous the amount of money we spent.”

Marc is a consummate salesman, and the point he was driving home was that application providers shouldn't think about building all of the infrastructure for SaaS on their own because it is just too expensive. Instead, they should leverage the infrastructure investments that salesforce.com has already made . . . and pay Marc to run their applications on Apex. Marc has moved beyond selling the salesforce.com CRM applications to selling the Apex SaaS platform. I think this is a smart strategy for salesforce.com, but I also believe there is a cheaper and better way to deliver SaaS value that will ultimately make the Apex approach a difficult one to swallow for the application vendors.

Marc raves about the importance of multi-tenancy so often that you would think this is a feature that customers actually care about. Well, they don't. Providers care about it because it gives them a cost effective way to deliver an on-demand application. Multi-tenancy allows sharing of hardware resources across the customer base, and it also enables a scalable system management model that is cost effective in terms of the administration labor required to maintain the software (i.e. one maintenance process serves all customers). But, as Marc points out, the engineering investment to design such a capability for any given set of applications is very expensive. Also, the first investment in the underlying infrastructure to make such an architecture robust and redundant is very steep. Fortunately, there is an alternative to Marc's very expensive design for SaaS: virtual appliances.

With a virtual appliance architecture, an application provider can use their current, single-tenant application architecture while gaining the benefit of high system utilization by running multiple customer instances of the application on the same system. Virtualization is a poor man's approach to multi-tenancy which provides all of the utilization and redundancy benefits without the “ridiculous” expense of re-engineering the application for salesforce.com style multi-tenancy. In addition to being a cheap way to enable multi-tenancy, virtual appliances offer the following additional advantages over a typical SaaS architecture:

portability – a virtual appliance can run on any machine in any location, without expensive configuration and maintenance procedures. The application can run locally on the customer's network in the event that data, latency, or security issues are important.

flexibility – if an important customer requires a unique feature, it is easy to provide that feature to one customer without forcing all customers to receive the feature also. This flexibility avoids the one-size-fits-all mentality that ultimately limits the markets that can be served with the application.

I am a big fan of salesforce.com for blazing a trail to a world where software value is delivered without the technical headaches of the legacy software approach. However, I also believe that salesforce.com's architecture is a first generation approach to the problem of software complexity, and innovations in the area of virtualization and virtual appliances are going to trump the Apex architecture for other software vendors to deliver the value of SaaS to their customers. Pay close attention to what is happening with Amazon's EC2 service, the growth of VMware, and the software appliance experience being pioneered by my company, rPath. The salesforce.com approach to SaaS is just the beginning of a wave of innovations that will transform the legacy application delivery model.

McKinsey Recommends Virtualization as first step to Cloud

In a study released last week, the storied consulting company, McKinsey & Company, suggested that moving datacenter applications wholesale to the cloud probably doesn't make sense – it's too expensive to re-configure and the cloud is no bargain if simply substituted for equipment procurement and maintenance costs. I think this conclusion is obvious. They go on to suggest that companies adopt virtualization technology in order to improve the utilization of datacenter servers from the current miserable average of ten percent (10%). I think this is obvious too. The leap that they hesitated to make explicitly, but which was called out tacitly in the slides, was that perhaps virtualization offers the first step to cloud computing, and a blend of internal plus external resources probably offers the best value to the enterprise. In other words cloud should not be viewed as an IT alternative, but instead it should be considered as an emerging IT architecture.

With virtualization as an underpinning, not only do enterprises get the benefit of increased asset utilization on their captive equipment, they also take the first step toward cloud by defining their applications independent from their physical infrastructure (virtual appliances for lack of a better term). The applications are then portable to cloud offerings such as Amazon's EC2, which is based on virtual infrastructure (the Xen hypervisor). In this scenario, cloud is not an alternative to IT. Instead, cloud is an architecture that should be embraced by IT to maximize financial and functional capability while simultaneously preserving corporate policies for managing information technology risk.

Virtualization as a step to cloud computing should also be viewed in the context of data, not simply application and server host resources. Not only do applications need compute capacity, they also need access to the data that defines the relationship of the application to the user. In addition to technology such as VMware and Citrix's Xen technology, enterprises also need to consider how they are going to abstract their data from the native protocols of their preferred storage and networking equipment.

For static data, I think this abstraction will take the form of storage and related services with RESTful interfaces that enable web-scale availability to the data objects instead of local network availability associated with file system interfaces like NFS. With RESTful interfaces, objects become abstracted from any particular network resource, making them available to the network where they are needed. Structured data (frequently updated information typically managed by a database server technology) is a bit trickier, and I believe solving the problem of web-scale availability of structured data will represent the “last mile” of cloud evolution. It will often be the case that the requirement for structured data sharing among applications will be the ultimate arbiter of whether an application moves to the cloud or remains on an internal network.

The company that I founded, rPath, has been talking about the virtualization path to cloud computing for the past three years. Cloud is an architecture for more flexible consumption of computing resources – independent of whether they are captive equipment or offered by a service provider for a variable consumption charge. About nine months ago, rPath published the Cloud Computing Adoption Model that defined this approach in detail with a corresponding webinar to offer color commentary. In the late fall of last year, rPath published a humorous video cartoon that likewise offered some color on this approach to cloud computing. With McKinsey chiming in with a similar message, albeit incomplete, I am hopeful that the market is maturing to the point where cloud becomes more than a controversial sound-byte for replacing the IT function and instead evolves into an architecture that provides everyone more value from IT.