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Choosing Between Cloud Providers

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Introduction

It seems that every day there are more cloud providers offering huge cloud based computing resources at low prices. The sort of Cloud providers that I’m talking about in this blog posting are the ones where you can host your application in multiple virtual machines and then the cloud service offers various extension APIs and services like BigData or SQL databases. The extension APIs are there to help you manage load and automatically provision and manage your application. The following are just a few of the major players:

  1. Amazon Web Services. This is the most popular and flexible service. There are many articles on how much web traffic is handles by AWS these days.
  2. Microsoft Azure. Originally a platform for .Net applications, it now supports general virtualization and non-Microsoft operating systems and programs.
  3. Rackspace. Originally a hardware provider, now offers full services with the OpenStack platform.
  4. VMWare. Originally just a virtualization provider, has now branched out to full cloud services.

There are many smaller specialty players as well like Hiroku for Ruby on Rails or the Google App Engine for Java applications. There are also a number of other large players like IBM, Dell and HP going after the general market.

All of these services are looking to easily host, provision and scale your application. They all cater to a large class of applications, whether hosting in the cloud a standard Windows desktop application, or providing the hardware support for a large distributed SaaS web application. Many of these services started out for specific market niches like Ruby or .Net, but have since expanded to be much more general. Generally people are following the work of Amazon to be able to deploy seamlessly anything running in a virtual machine over any number of servers that can scale according to demand.

Generally these services are very appealing for software companies. It is quite expensive and quite a lot of trouble maintaining your own data center. You have to man it 24×7, you are continually buying and maintaining hardware. You have to have these duplicated in different geographies with full failover. Generally quite a lot of activities that distract you from your main focus of developing software. Fewer and fewer web sites are maintaining their own data centers. Even large high volume sites like NetFlix or FourSquare run on Amazon Web Services.

Which to Choose?

So from these services which one do you choose, how do you go about choosing. This is a bit of game where the customer and the service provider have very different goals.

For a customer (software developer), you want the cheapest service that is the most reliable, high performance and easiest to use. Actually you would always like the cheapest, so if something else comes along, you would like to be easily able to move over. You might even want to choose two providers, so if one goes down then you are still running.

For the service provider, they would like to have you exclusively and to lock you in to their service. They would like to have you reliant on them and to attract you with an initial low price, which then they can easily raise, since switching providers is difficult. They would also like to have additional services that they can offer you down the road to increase your value to them as a customer.

OpenStack

Both Amazon and Azure look to lock you in by offering many proprietary services, which once you are using, makes switching to another service very difficult. These are valuable services, but as always you have to be careful as to whether they are a trap.

Amazon pretty much owns this market right now. New players have been having trouble entering the market. Rackspace suddenly realized that just providing outsourced hardware wasn’t sufficient anymore and that too much new business was going to Amazon. They realized that creating their own proprietary services in competition with Amazon probably wouldn’t work. Rackspace came up with the disruptive innovation of creating an open source cloud platform called OpenStack that it developed in conjunction with Nasa. They also realized that so many people were already invested in Amazon that they made it API compatible with several Amazon services.

OpenStack has been adopted by many other Cloud providers and there are 150 companies that are officially part of the OpenStack project.

This new approach has opened up a lot of opportunities for software companies. Previously to reduce lock-in to a given vendor, you had to keep you application in its own virtual image and then do a lot of the provisioning yourself. With this you can start to automate many processes and use cloud storage without suddenly locking yourself into a vendor or to have to maintain several different ways of doing things.

Advantages for Customers

With OpenStack, suddenly customers can start to really utilize the cloud as a utility like electricity. You can:

  1. Get better geographic coverage by using several providers.
  2. Get better fault tolerance. If one provider has an outage, your service is still available via another.
  3. Better utilize spot prices to host via the lowest cost provider and to dynamically switch providers as prices fluctuate.
  4. Have more power and flexibility when negotiating deals with providers.
  5. Go with the provider with the best service and switch as service levels fluctuate.

One thing that scares software companies is that as soon as they commit to one platform, then do a lot of work to support it, then suddenly have a new service appears that leapfrogs the previous services. Keeping up and switching become a major challenge. OpenStack starts to offer some hope in getting off this treadmill, or at least making running on this treadmill a bit easier.

Is OpenStack Ready?

At this point OpenStack doesn’t offer as many services as Azure or AWS. Its main appeal is flexibility. The key will be how well or the major companies backing OpenStack can work together to evolve the platform quickly and how strong their commitment is to keeping this platform open. For instance will we start to see proprietary extensions in various implementations, rather than committing back to the home open source project?

Amazon and Azure have one other advantage, and that is that they are subsidized by other businesses. For instance Amazon has to have all this server infrastructure anyway in order to handle the Christmas shopping rush on its web store. So it doesn’t really have to charge the full cost, any money it makes off AWS is really a bonus. By the same token Microsoft is madly trying to buy market share in this space. It is taking profits from its Windows and Office businesses and subsidizing Azure to offer very attractive pricing which is very hard to resist.

Apple uses this strategy for iCloud. iCloud runs on both Amazon and Azure. This way it isn’t locked into a single vendor. Has better performance in more regions. Won’t go down if one of these services goes down (like Azure did on Feb. 29). Generally we are seeing this strategy more and more as people don’t want to put their valuable eggs all in one basket.

Summary

With the sudden explosion of Cloud platform providers, suddenly there are huge opportunities for software developers to reduce costs and expand capabilities and reach. But how do you remain nimble and quick in this new world? OpenStack provides a great way to provide a basis for service and then allows people to easily move to new services and respond to the quickly changing cloud environment. It will be interested to see how the OpenStack players can effectively compete with the proprietary and currently subsidized offerings from Microsoft and Amazon. Within Sage we currently have products on all these platforms. SalesLogix cloud is on Amazon, SageCRM.com is on Rackspace and Sage 200 (UK) is on Azure. It’s interesting to see how these are all evolving.

One Response

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  1. Interesting perspective. Definitely picking up a strategy shift still rippling through Redmond, each product appears to be gaining PM’s responsible not just for interoperating with standards but also with open source. For example Node on Azure, expecting Redis soon. Perhaps an inkling Azure will adopt OpenStack AWS APIs…

    boulton clive

    May 6, 2012 at 11:18 pm


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