The document discusses the value of cloud computing by explaining how it allows companies to pay for computing resources on demand rather than owning their own IT infrastructure, highlighting how cloud computing can help companies reduce costs, improve agility, and focus on their core business activities rather than IT management. Several examples are provided showing how different types of applications could be deployed on the Windows Azure cloud platform and the potential cost savings compared to traditional on-premises infrastructure.

1. Understanding the Value of
the Cloud
Centare Lunch & Learn
Eric D. Boyd

2. Introduction
• Eric D. Boyd
• 15 years in technology

3. I’m From Here

4. I Moved Here

5. I Work Here
www.centare.com

6. I Work On

7. I Blog Here
www.ericdboyd.com

8. I Tweet Here
www.twitter.com/EricDBoyd

9. Agenda and Objectives
• What is Cloud Computing?
• Why you should use Cloud resources.
• How you can benefit from the Cloud.

10. What is Cloud Computing?
“…cloud computing is really doing
just-in-time provisioning and scaling of
services, software and solutions
delivered as a service on a pool of
hardware…”
- Bob Muglia, Microsoft, April 28, 2010

11. Getting to Know You

12. Generational Shift of Computing
TECHNOLOGY ECONOMIC BUSINESS
Centralized compute Optimized for High upfront costs
and storage, thin efficiency due to for hardware and
clients high cost software
Optimized for
PCs and servers for Perpetual license for
agility due to low
distributed compute OS and application
cost
and storage software
Large datacenters, Order of Pay as you go,
commodity magnitude better pay only for
hardware, scale- efficiency and what you use
out, devices agility

13. Challenges Forcing IT Optimization
Facing an business has causing new
unprecedented responded by technologies to
economic transforming… emerge.
environment…
ECONOMIC BUSINESS TECHNOLOGY
CHALLENGES CHALLENGES CHALLENGES
• Reduction of • Focus on core • Shift from
operating and value-add information
capital activities technology to
expenditures • Improve agility business technology
• Increased to stay • Technology erases
competition for competitive infrastructure
fewer resources • Leverage complexity
• Do more with less existing assets to • Globalization
expand

14. What Your Company is Saying
CEO
CFO/CIO
“I need the organization to
“We need to reduce our total cost
become more agile to take
of ownership and prioritize
advantage of changing
business initiatives rather than IT
market dynamics.”
imperatives.”
DIRECTOR, OPERATIONS PRODUCT MANAGER
“I need operational “I can’t wait for IT to
transparency so that we procure capacity, we
can align our investments need to take our
with the business needs.” product to market now.”
IT ADMINISTRATOR SALES ACCOUNT MANAGER
“I need solutions that scale with
“I need to reduce the amount of
our customers and provide
time my team is spending keeping
greater mobility for more
systems operational and
devices.”
maintained.”

15. Problems in the Data Center

16. Allocating Resources: The Traditional View
Load
forecast
Undersupply
Oversupply
Oversupply
IT CAPACITY
Initial
investment
TIME
Allocated IT resources Actual load

17. Is this possible?
Has this been done before?

19. Electrical Grid Adoption
80% 90%
40%
5%
1900 1907 1930 1935

20. Cloud-Addressable Challenges Facing
Today’s Enterprise
1 Infrastructure costs are fixed and 5 Maintaining security while
ongoing, and distract from the increasing access and
mission of reducing business transparency—within and outside
process friction the organization
2 Leveraging past investments to 6 Security, access, and transparency
provide future value across the value chain:
suppliers, partners, etc.
3 Many data centers at limit—real
estate, capacity, cooling and power 7 Lack of a common platform
4 Matching capacity to demand

21. Benefits of Cloud Computing
SHARING "PERISHABLE AND
INTANGIBLE" COMPUTING
PAY FOR ACCESS POWER AMONG MULTIPLE IMPROVE TIME-TO-MARKET FOR
– NOT OWNERSHIP – TENANTS OPTIMIZES NEW
OF IT RESOURCES COSTS FOR ALL APPLICATIONS, SERVICES, AND
SOLUTIONS
STAFF AND PLAN FOR TYPICAL USAGE.
SCALE TO THE CLOUD AT PEAK TIMES –
PLANNED OR UNPLANNED
End of quarter reporting, tax-time,
payroll, slashdot effect

22. Allocating Resources: The Traditional View
Load
forecast
Undersupply
Oversupply
Oversupply
IT CAPACITY
Initial
investment
TIME
Allocated IT resources Actual load

23. Allocating Resources: The Cloud View
Load
forecast
No undersupply
IT CAPACITY
Less
Less oversupply oversupply
Lower initial
investment
TIME
Allocated IT resources Actual load

24. Your Competitors are Benefiting
“By 2012, 80% of Fortune 1000 enterprises will be
using some cloud computing services, 20% of
businesses will own no IT assets.” Gartner

25. Cloud Usage: Tripling in Three Years
2013
$13.3B
• By 2014, cloud computing
services will grow to a $45
billion industry a year (IDC)
$14.0B
2009
• Traditional IT services will
transfer to the new cloud
model, with lots of potential
$2.9B
revenue in new businesses and
$5.7B revenue streams (Gartner)
$17.6B
$6.9B
IaaS PaaS SaaS

26. Cloud Priority for the CIO
• Cloud Computing ranks No. 1 on the CIO
technology priority list for 2011. Gartner

27. Windows® Azure™ Platform

28. Cloud Computing Taxonomy
The Windows Azure
Platform fits here
Traditional IT IaaS PaaS SaaS
You manage
Applications Applications Applications Applications
Data Data Data Data
You manage
Runtime Runtime Runtime Runtime
Managed by vendor
Middleware Middleware Middleware Middleware
Managed by vendor
You manage
O/S O/S O/S O/S
Managed by vendor
Virtualization Virtualization Virtualization Virtualization
Servers Servers Servers Servers
Storage Storage Storage Storage
Networking Networking Networking Networking

29. Cloud Workload Patterns
On and Off Growing Fast
Compute
Compute
Inactivity On off
Period
Average Usage
Average Usage
Time Time
• •
• •
• •
Unpredictable Bursting Predictable Bursting“
Compute
Compute
Average Usage Average Usage
Time Time
• •
• •
• •

30. Usage Scenarios
•
•
•
•
•
•

31. Data-centric Services
•
•
•

32. Web Presence
•
•

33. Marketing Campaign Websites
•
•

34. Self-managed Departmental Applications
•

35. Departmental Applications (managed by IT)
•
•

36. Mobile Apps
•
•

37. Intrapreneuring
•

38. Many Scenarios
•
•
•
•
•

39. Comparing Deployment Options
On premises Hosted Cloud

40. Windows Azure Platform
GENERAL PURPOSE PROGRAMMING LANGUAGES
Windows Azure Platform
Compute Storage Management CDN AppFabric Marketplace Relational Management
data

41. Windows Azure
• • •
• • •
•
•

42. SQL Azure
• • •
•
•
•

43. Windows Azure Platform Data Centers
N. Europe
N. Central – U.S. W. Europe
S. Central – U.S.
E. Asia
S.E. Asia
6 datacenters across 3 continents
Simply select your data center of choice
when deploying an application

44. Windows® Azure™ Platform

45. Windows® Azure™ Platform

46. Windows® Azure™ Platform

47. Windows® Azure™ Platform

48. Monthly Service Level Agreements
Windows Azure AppFabric
Windows Windows Azure SQL Azure
Compute Service Bus and
Azure Compute Storage Database
instance Access Control
connectivity availability availability
monitoring availability
• Your service is • All running • Storage service • Database is • Service bus
connected and instances will will be connected to and access
reachable via be available/ the internet control
the internet continuously reachable gateway endpoints will
monitored (connectivity) • All databases have external
• Internet-facing
• If instance is • Your storage will be connectivity
roles will have
external not requests will continuously • Message
connectivity running, we be processed monitored operation
will detect and successfully requests
initiate processed
corrective successfully
action
>99.95% >99.9% >99.9% >99.9% >99.9%

49. Windows Azure Platform Consumption Prices
COMPUTE STORAGE WEB EDITION BUSINESS
EDITION

50. More Affordable Platform Access
Extra Small Instances
• Designed for small scale web applications
• Mix and match with larger VM Instances
Instance I/O
Instance Size CPU Memory Price
Storage Performance
Extra Small 1.0 GHz 768 MB 20 GB Low $.05 per hour
Small 1.6 GHz 1.7 GB 225 GB Moderate $.12 per hour
Medium 2 x 1.6 GHz 3.5 GB 490 GB High $.24 per hour
Large 4 x 1.6 GHz 7 GB 1000 GB High $.48 per hour
Extra Large 8 x 1.6 GHz 14 GB 2040 GB High $.96 per hour

51. Pricing Example: Marketing Website
Windows Azure
Workload Pattern Application Background
Platform Solution
“Unpredictable Bursting“ Branded marketing website with Windows Azure Compute
customer facing front end, hosting Windows Azure Storage
viewable media content Content Delivery Network (CDN)
Compute
Average Usage
Time
Application Variables Pricing Calculation Billing Estimate
Instance Size: 2 to 4 (Small) $0.24 to $0.48 per hr $259.20
Windows Azure Storage: 10 GB $0.15 per GB $1.50
Data Transfer In: 7.5 GB $0.10 per GB $0.70
Data Transfer Out: 30 GB $0.15 per GB $4.50
Blob Transactions: 30,001 $0.01 per 10,000tx $0.03
Total Consumption Monthly Cost of Application: $265.93
TCO Tool Highlights: Derived On-Premises Costs* Cost of Ownership Comparison
Computing Costs: $1,513.50 92% 94%
Database and Storage Costs: $3.40 savings savings
Bandwidth Costs: $98.25
IT Admin Support $235.75 $3.2K
Other Costs: (Including Facilities $1,303.10
$266 $180
&Overhead; Setup & Delivery)
Total: $3,154.00 Hosted Windows Azure Development
Platform Accelerator Core
*Traditional server purchase costs, divided over 12 month period

52. Pricing Example: Payroll Application Add-on
Windows Azure
Workload Pattern Application Background
Platform Solution
“Predictable Bursting“ Web-based payroll application add-on Windows Azure Compute
based in the cloud, with two connected Windows Azure AppFabric
SQL Azure web databases SQL Azure Storage
Compute
Average Usage
Time
Application Variables Pricing Calculation Billing Estimate
Compute Instances: 2 to 4 (Medium) $0.48 to $0.96 per hr $598.32
Connections: 2 $3.99 per connection $7.98
SQL Azure Database: 2GB (2) $9.99 per database $19.98
Data Transfer In: 18 GB $0.10 per GB $1.80
Data Transfer Out: 36 GB $0.15 per GB $5.40
Total Consumption Monthly Cost of Application: $633.48
TCO Tool Highlights: Derived On-Premises Costs* Cost of Ownership Comparison
Computing Costs: $1,651.23 85% 89%
Database and Storage Costs: $653.00 savings savings
Bandwidth Costs: $105.00
$4.5K
Other Costs: (Including Facilities & $2,045.77
Overhead; Setup & Delivery) $633 $475
Total: $4,455.00
Hosted Windows Development
Azure Accelerator
Platform Core
*Traditional server purchase costs, divided over 12 month period

53. Pricing Example: Inventory Data-hub
Windows Azure
Workload Pattern Application Background
Platform Solution
“On and Off “ Warehouse inventory content data-hub Windows Azure Compute
application that provides aggregate SQL Azure Database
Compute
and regional specific information on
Inactivity inventory levels to network of
Average
Period
Usage warehouse systems
Time
Application Variables Pricing Calculation Billing Estimate
Windows Azure Compute: 2 (Small) $0.24 per hr 129.60
SQL Storage Database Size: 20 GB $99.99 per 10GB 199.98
Data Transfer In: 10 GB $0.10 per 1GB $1.00
Data Transfer Out: 10 GB $0.15 per 1GB $1.50
Total Consumption Monthly Cost of Application: $332.08
TCO Tool Highlights: Derived On-Premises Costs* Cost of Ownership Comparison
Compute $1,513.50
Database/Storage: $652.80
89% 90%
Bandwidth Costs: $172.34 $3.1K savings savings
Other Costs: (Facilities & $724.80
Overhead; Setup & Delivery) $332 $282
Total: $3,063.44 Windows
Hosted SQL Azure
Azure Development
Platform Accelerator
*Traditional server purchase costs, divided over 12 month period

54. Example: Cloud Assessment Connected Business Suite Pricing
Windows Azure
Workload Pattern Application Background
Platform Solution
“Growing Fast“
Growing business connectivity portal, Windows Azure Compute
consisting of 50 communication and Windows Azure AppFabric
Compute
organizational applications scaling up Windows Azure Storage
Average Usage
to 100 applications SQL Azure Database
Time
Application Variables 50 App Totals Commitment Quantities EA Billing Estimate
Compute Instances: 2 (Medium) 100 Individual Instances $13,860.00
Connections: 5 connections 250 Sets of 5 $432.83
SQL Storage: 10 GB 500 Sets of 250 $3,849.62
Blob Transactions: 500,000 2.5 million Sets of 1 million $2.31
Storage: 0 to 150 GB peak 7,500 Sets of 100 $8.66
Data Transfer In: 25 GB 1,250 Sets of 100 $1.13
Data Transfer Out: 75 GB 3,750 Sets of 100 $4.96
Total EA Monthly Cost for 50 Applications: $18,159.51
Windows Azure Platform EA Monthly Costs Cost of Ownership Comparison
Total Cost for 50 Applications $18,159.51 50 Applications 100 Applications
Total Cost for 100 Applications $36,319.02 56% 60%
Savings Savings
90K
TCO Tool Derived On-Premises Costs*
41K
18K 36K
Total Cost for 50 Applications $41,432.00
Hosted EA Pricing Hosted EA Pricing
Total Cost for 100 Applications $90,193.00
*Traditional server purchase costs, divided over 12 month period

55. Cloud Assessment
• •
•
•

56. Calculate the Savings $$$
Windows Azure Services Windows Azure Costs ROI Comparison
To access the TCO Calculator go to:
http://www.microsoft.com/windowsazure/tco/
Note: The TCO calculator is for informational purposes only, and provides an estimate to help appraise the potential savings of
deployment to Windows Azure. The analysis report should not be interpreted as a commitment on the part of Microsoft, or Centare.

57. Next Steps
• Identify Applications that Make Sense
• Identify Appropriate Cloud Vendors and Partners
• Download Azure SDK and Tools
– http://www.microsoft.com/windowsazure/getstarted/
• Azure Pricing Calculator
– http://www.microsoft.com/windowsazure/pricing-
calculator/
• Sign up for FREE Azure Trial
– http://www.microsoft.com/windowsazure/free-trial/

58. Questions

59. Thank you!
eric.boyd@centare.com
http://www.ericdboyd.com
http://spkr8.com/t/7705