Cloud Computing Business Analytics

1. Cloud Computing (Amzn EC2):
Business Analytics

2. AGENDA
• Overview
• Cloud-computing paradigms
• Costs using traditional hosts
• Costs using Cloud Infrastructure
• Cloud Adoption Strategy(Market)
• Pros-Cloud Computing Option
• Proposed Strategy
• Q&A
• Appendix

3. OVERVIEW
o The future of business is collaboration, and the future of
collaboration is in the cloud
o Cloud computing technology is bringing sweeping changes
to enterprise IT
 Offers a new technological, operational, and business
model approach
 Radically increases scalability, elasticity
 Dramatically reduces deployment and operational costs

4. CLOUD COMPUTING

5. COSTS USING TRADITIONAL HOSTS
Base Annual Depreciation Cost $30,000
Overhead(30 hosts) $6,000
Total Annual Fixed costs $36,000
Year 1 Year2 Year 3
90,000
60,000
30,000
FixedCosts($)
Total Fixed Costs
Write down value

6. COSTS USING CLOUD INFRASTRUCTURE
• Forecasted using High-Memory Amazon EC2 Instances at
price of 0.72 per hour
• Equivalent to 3 core servers hosted traditionally. Additional
monitoring charges might be applicable.
• Peak load forecast=(0.72*24*30)*(30/3 instances for 30K
users)
• Current user base approximated at 30K,22K,15K etc reducing
sequentially.

7. COSTS USING CLOUD INFRASTRUCTURE
Costs calculated
using per hour costs
of $0.72 for an
Amazon EC2
instance, 24*7 usage
Month 1 Month2 Month3 Month4 Month5
5,000
4,000
3,000
2,000
1,000
AmazoncloudCosts
($)
Month 1 Month 2 Month 3 Month 4 Month 5 Total
Concurrent Users 30,000 23,000 15,000 11,250 7,500
Floating Costs $5,184 $3,888 $2,592 $1,944 $1,296 $14,904

8. CLOUD ADOPTION STRATEGY
Application category
• Analysis and reporting
• Business management
• Business operations
• Engineering
• Employee productivity
Organizational Change
Management
• Early Adopter
• Fast follower
• Cloud skeptic

9. PROS - CLOUD COMPUTING OPTION
• Reduced upfront CAPEX costs.
• Significant reduction in overhead costs , cycle time for
Hardware procurement and eventual build of traditional
hosts.
• Auto Scaling for unprecedented usage increase/decrease
• With a 99.95% availability, the Amazon EC2 option would be
a reliable option to reduce costs
• With Instances in US, Europe and APAC having variable
pricing the user load can be allocated to specific regions
• Even with 2 major titles being released per year the total
cloud costs would not exceed $30K. Significant saving
compared to a traditional host.

10. PROPOSED STRATEGY
• A viable option is to use the Reserved and Spot Instances
considering that some new titles will be released annually.
The remaining portion can be done on a pay-as-you-go
model .
 Note: Reserved instances are 1/3rd the price for normal pay-as-you-
go models. Savings still more than traditional hosts with annual
commitments.
• Cloud-bursting approach to divide the work so that part of
the task could be done in the cloud if there are less number
of titles released every year.

11. Q&A
• Roundtable Q&A

12. APPENDIX
o New York Times(Fortune 500 who used Amazon Cloud)
• Used EC2 and S3 to convert 15 million scanned news
articles to PDF (4TB data)
• Took 100 Linux computers 24 hours (could have taken
months on NYT computers
• “It was cheap experimentation, and the learning curve
isn't steep.” – Derrick Gottfrid, Nasdaq