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Private Cloud Electricity – Owning Your Power Supplies

17th August 2017 By Greg Ferro Filed Under: Blog

I was once told that clouds are like electricity but for computer power. Why are they installing private electricity generation to avoid using the scaled -up, scale-out ‘cloud-like’ public electricity supply ?

Equinix has signed a 15 year Power Purchase Agreement (PPA) with a subsidiary of Southern Company that will see Bloom Energy fuel cells installed at 12 of its US data centers.

Have noticed many of these deals lately and most data centre operators are now generating some signficant percentage of the power needed to run their facilities

Equinix to install Bloom Energy fuel cells at 12 data centers | News | DatacenterDynamics : http://www.datacenterdynamics.com/content-tracks/power-cooling/equinix-to-install-bloom-energy-fuel-cells-at-12-data-centers/98804.article

Response:New Office 365 subscriptions for consumers plunged 62% in 2016 | ITworld

30th January 2017 By Greg Ferro Filed Under: Response

Another “public cloud isn’t for everyone” story:

By charting Office 365’s new subscribers using a trailing 12 months — the latest quarter plus the three previous — to eliminate seasonal spikes, the suite’s waxing and waning over the past four years becomes apparent. From its Q1 2013 debut until Q4 2015, Office 365 subscriber growth was always steady, sometimes spectacular.

Solid approach to charting and yes, Office 365 did well but:

After Q4 2015, however, the trailing 12-month numbers fell, a decline fueled by the plateau of 0.9 million each quarter from the second onward. That resulted in a gain of just 4.3 million subscribers throughout 2016, a reduction of 62% from the year before.

Office365 new subs 100706400 large

Oh, the path to public cloud isn’t always a growth market? That’s not the story from the clouderati. Oh dear.

New Office 365 subscriptions for consumers plunged 62% in 2016 | ITworld : http://www.itworld.com/article/3162708/enterprise-applications/new-office-365-subscriptions-for-consumers-plunged-62-in-2016.html

Response: Proposed server purchase for GitLab.com | GitLab

9th January 2017 By Greg Ferro Filed Under: Response

Gitlab is talking about heading into the private cloud after successfully building a cloud-ready application. The savings are substantial for a small, technology-rich company:

The cloud hosting for GitLab.com excluding GitLab CI is currently costing us about $200k per month. The capital needed for going to metal would be less than we pay for 1 quarter of hosting. The hosting facility costs look to be less than $10k per month. If you spread the capital costs over 2.5 years (10 quarters) it is 10x cheaper to host your own. (My emphasis)

This sounds about right but I don’t think this factors in head count for operating the physical infrastructure. Lets say that two extra FTEs at $15K per month are required, this still one third the cost of AWS. The reaility is $2.4MM is a substantial yearly budget for IT Infrastructure and for an application that already cloud-ready it would go a very long way

For a small company that is focussed on technology adding more headcount is good for capacity. In a team of ten people, adding 2 headcount increases diversity of thinking, ideas and approaches and can be important to spreading out the workload e.g. on call rotation is much improved with 12 people in the rota. 

Factors that I thought significant: 

  • Application fits into a single rack (its a small company)
  • Company is focussed on a single customer solution which they own end-to-end. 
  • Strong technical leadership has insights in the problems of owning infrastructure and is thinking ahead on minimising that. 
  • Making some good decisions to keep the physical infrastructure simple, plain and easy to handle.

I’ve said many times, public cloud isn’t cheap. This doesn’t make it the right or wrong solution but cheap is not a reason to go to the cloud when operating at any sort of scale. (Mind you, a startup with less then five people will always be better off using public cloud). There isn’t a right answer just use cases for when it works and doesn’t.

Proposed server purchase for GitLab.com | GitLab:

Blessay: Successful Private Clouds Aren’t Spoken Of In Public

23rd February 2016 By Greg Ferro Filed Under: Blessay, Blog

You don’t hear much about successful “Private Clouds” because they aren’t done in public. Two takeaways.

  1. People are talking a lot about public cloud because its good business not necessarily because its good technology [1]
  2. Private Clouds are being successfully deployed in vast numbers and no one is talking about them. This is also good business and probably because its good technology.private-cloud-not-spoken-public-opt

Being Public

Some companies choose to be public about their cloud participation.

  1. Recruiting. Cloud computing of any type need people who have different skills focus but mostly its about attitude, flexibility and excellence (recruiters are bad at this). Chatting to people at conferences is job searching that is many times cheap than recruitment companies.
  2. Marketing. Speaking at conferences using your company brand name usually costs a lot of money. The poster child of public cloud, Amazon AWS, gets vast amounts of free marketing that could well be measured in hundreds of millions.
  3. Open Source Participation. Get other companies to start using your software and wait for the free software contributions to roll in to your platform.
  4. Open Source Exposure. Encouraging other developers to start using your open source project. Build a pool of resources that using, developing and supporting your platform so that you can save money on recruiting (see above) and get more contributions(see above).
  5. Ego. Some people like to think that what they do matters and they should receive public recognition for doing their day-to-day job. Just a very few will actually deserve it.
  6. Competitive Advantage Strategic business advantage is gained by showing competitors how your IT makes your more competitive.
  7. Startup Crash Landing working in startups has few guarantees. The most likely outcome is that your next job is just around the corner and public speaking is a fine addition to your résumé.

These are all fine reasons for being open and speaking about your IT success. In particular, using public cloud platforms means that your chances of systemic competitive differentiation is zero. [2]

Being Private

Most companies do not talk about their cloud participation.

  1. Competitive Advantage. Many companies invest in IT to achieve competitive advantage. Highlighting your advantage will negate the investment.
  2. Cost. Its cost serious money in lost time, travel and supervision to release resources for travel. [3]
  3. Measurable Gain. The returns on public speaking are largely intangible & immeasurable. Why waste effort
  4. Legal. Some industries are highly regulated and the
  5. IT Security. Two aspects to security. One, open discussion of your internal architecture is providing reconnaissance information to an attacker [4].
  6. Brand Security. Employees speaking on behalf of company are at risk of causing brand damage, public outcry, etc. People who have families to care for (compared to most public cloud consumers) have real fears of failure that will cause serious damage to their personal lives.

There are also lesser reasons for rejecting public engagement. While often these are retrograde and focussed on the past they are nonetheless real:

  1. Inflexibility: It’s never been done before.
  2. No perceived value: Measuring the internal cost vs the perceived value is difficult for companies who have never engaged openly.
  3. Fear of Failure Why take
  4. Why Bother We have insufficient resources. [5]
  5. Fear of Speaking Mature, established companies have no experience in the mechanics of speaking. It will, perhaps, take some time for them to embrace the value of openness.

Private Clouds Are, Well, Private

The majority of companies using public cloud have limited financial resources. They don’t make a profit and cash burn/cash flow is a critical issue. The ability to achieve any form of exposure is, well, good and a chance of a soft landing into when your startup crashes (as most of them do).

The technology press has been massively skewed towards public cloud simply because there is material to be used. Public speaking, public figures who are accessible for interviews/coffee. Private cloud owners simply don’t engage in public debate. I mean, why bother ?

In the real world, private Clouds are far more flexible and practical for the most companies. It is the only cloud solution that will support your legacy software AND support the implementation of next generation cloud technologies.

Private Cloud Is Also The Answer

I’m concerned that there widespread market bias leading ( a Confirmation Bias most likely) that strongly supports public cloud as the only possible solution. The disruption isn’t caused by public cloud, it’s caused by technologies that public cloud must use. Without them, public cloud isn’t viable, practical or even possible.

Public cloud has been the first companies to embrace DevOps/Automation/OrchestrationPortals/APIs/REST/JSON etc because that is the best way to run an IT infrastructure. Enterprise IT will be slower to embrace these since they are 1) not technology-only companies 2) they must sustain heirloom technologies while transitioning to cloud in their private data centres.

Being forced into technology change isn’t a bad thing. Look at smartphones and the speed of innovation that has been possible because phones are replaced on a bi-annual cycle.

Public cloud cheer squads have formed to force change onto consumers. Again, no bad thing since the resistance to change is substantial and significant. What these clouderati cheerleaders have conveniently forgotten is that the same technology drives/deploy/ private cloud and delivers the same value. Orchestration and automation works just as well in private cloud.

Also key, scaling down the technology to private cloud size is a simple task and removes a key objection to deploying it. The public cloud is a sweet testing platform for private clouds. Lets test it, see it how it works and then deploy the technology that we need.

Back to my two things:

  1. Public clouds aren’t the best solution just because people are talking about them.
  2. Private Clouds are being successfully deployed in vast numbers and no one is talking them.

The EtherealMind View

One feature of the public cloud is that sheer number of resources available to help with adoption. Practical, useful resources that talk about the good, bad & ugly help to get the job done. This information removes very costly processes like pre-sale proof-of-concept, time spent in meetings and more. On the other hand, public cloud is hard and requires a full replacement of all your existing IT to embrace.

You don’t hear much about private cloud because its private. No egos, no resume boosting, no travel, and some minor security reasons. Private clouds exist, are successful and going through exactly the same growing pains as public clouds but there are reasons why private clouds are private.


This article first appeared in an Issue of the Human Infrastructure Magazine at Packet Pushers. You can signup to receive the magazine by email and for free by subscribing here.

PPI-HIM-Logo-300x300.png

 


  1. Most cloud technology is better than existing technology because most existing IT technology is obsolete by at least a decade.  ↩
  2. Once everyone is using the same technology, there is no advantage between competitors. (computing/storage/networking is unlikely to be fungible resource like electricity in the next 50 years).  ↩
  3. Not everyone wants to work nights and weekends. Not everyone thinks that speaking at a conference is a fun activity.  ↩
  4. Security through obscurity isn’t best practice but when attackers have your source code,  ↩
  5. Startups have far more human resources than a typical enterprise IT team. They must cope with far more complexity than a typical Internet startup – more platforms, more operating systems, diverse applications and have little access to high quality people and support.  ↩

Musing: Currency Fluctuations and Cloud Computing

6th July 2015 By Greg Ferro Filed Under: Musing

etm-musing-logo-300-300-opt

Price uncertainty in the public cloud has taken a serious turn for the worse.

The US Dollar has increased in value by 5-10% over the last 3 months depending on how you measure it and looks set to increase further. The Chinese stock market is down 25% and taking Australia, Japan and India with it. The European Union is struggling with Greece and heading downward.

The majority of customers using cloud computing from AWS, Azure and Google are paying for services in USD and the net effect has seen 10-25% increase.

But much more damaging is the price uncertainty. Businesses look for predictable and reliable costs so that they can plan their businesses. Market fluctuations are not normal practice for IT where currency risk has been devolved to wholesaler/distributors ( vendors have some currency risk but mostly transfer it to wholesalers).

Combined with the lack of price reductions in 2015 (does Moore’s law flow through to selling price ? ), cloud computing isn’t cheap and its getting more expensive. And it you are struggling with cash flow, you don’t need unpredictable stresses like this.

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Copyright Greg Ferro 2008-2017 - Thanks for reading my site, it's been good to have you here.

Opinions, Views and Ideas expressed here are my own and do not represent any employer, vendor or sponsor.Full disclosure