Just Over the Horizon, Private Clouds

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This doesn't mean that stalwart Unix servers and IBM mainframes will be pushed onto a forklift and carted away, replaced by sets of, say, $2,400 x86 servers. On the contrary, proprietary Unix servers and mainframes run many business applications that can't be easily converted to the x86 instruction set. For many years to come, applications in COBOL, FORTRAN, RPG, Smalltalk, and other languages, written in house years ago or customized from what is often a product no longer in existence, will still be running in the corporate data center. But there are some applications running on legacy systems that can be converted to the x86 architecture and run in the internal cloud, and many new applications will assume the x86 architecture is their presumed target. Private clouds may never achieve the economies of scale of the big public clouds, but they don't have to. They only need to be cheaper to operate than legacy systems.

The process is already well under way. While Unix and the mainframe remain a presence, the fastest-growing operating systems in corporate data centers are Windows Server and Linux, both designed for x86 systems. The trend to consolidate more applications on one server through virtualization, thereby reducing the total number of servers, can be done on any of the named architectures, but the most vigorous activity is virtualization of x86 servers. VMware, the market leader, grew from a start-up to $2 billion in revenues in 10 years. VMware, Citrix Systems, and now Microsoft produce virtualization products for the x86 servers, with open source products Xen and KVM available as well. It's possible to cluster such machines together and run them as a pooled resource from one management console, a first step toward the private cloud.

The Steps Leading to the Private Cloud

But why would a company want to build its own private cloud? Like the public cloud, the private cloud would be built out of cost-effective PC parts. It would be run as a pool of servers functioning something like a single giant computer through a layer of virtual machine management software. Workloads can be spread around the pool so that the load is balanced across the available servers. If more capacity is needed for a particular workload, the private cloud, like the public cloud, would be elastic. The workload can be moved to where that capacity already exists, or more hardware can be brought on line to add capacity. After disposing of peak loads, any server that isn't needed can be shut down to save energy.

Furthermore, the end users of the private cloud can self provision themselves with any kind of computer -- a virtual machine to run in the cloud -- that they wish. The private cloud can measure their use of the virtual machine and bill their department for hours of use based on the operating costs for the type of system they chose. This self-provisioning and chargeback system is already available through the major virtualization software vendors as what's called a "lab manager." That product was aimed at a group of users who are likely to be keenly interested in self-provisioning-the software developers who need different types of software environments in which to test-drive their code. After they know that their code will run as intended, they turn it over to a second group of potential private cloud users, the quality assurance managers. These managers want to test the code for the load it can carry-how many concurrent users, how many transactions at one time? They want to make sure that it does the work intended and will work with other pieces of software that must depend on its output.

Software development, testing, and quality assurance is a major expense in most companies' IT budgets. If the private cloud can have an impact on that expense, then there is an economic justification to support its implementation. But beyond the software professionals, there are many other potential internal users of this new resource. Frequently, line managers and business analysts, who understand the transactions and business processes that drive the company, lack the means of analyzing those processes from the data that they produce. If they had that analysis on a rapid basis for time periods that they chose to define, such as a surge in a seasonal product, then they would be able to design new business processes and services based on the results.

By giving priority to such work, the private cloud could apportion resources in a more elastic manner than its predecessor data center filled with legacy systems. The many separate parts of the traditional data center had their own work to do; few were available for reassignment on a temporary basis. Or the private cloud could monitor the company's Web site, and when it's in danger of being overloaded, assign more resources to it rather than lose potential customers through turned-away or timed-out visitors.

Once a portion of the data center has been "pooled" and starts to be managed in a cloudlike manner, its example may bring more advocates to the fore, arguing that they too should have access to cloud-style resources. It might sound as if the private cloud is a prospect that remains far off in the future, but virtualization of the data center, as noted in the previous chapter, is already well under way. Such virtualization lays the groundwork for the move to a private cloud.

As cloud computing grows in importance in the economy, top management will ask if it is possible to achieve internally the economies that they're reading about in public clouds. Those that have built up skills in x86 servers and built out pools of virtualized servers will be able to answer yes, it is.

The next step would be to acquire the layer of virtualization management software to overlay the pool, provide monitoring and management tools, and give yourself automated ways of load balancing and migrating virtual machines around.

VMware is leading the field with its vSphere 4 infrastructure package and vCentermanagement tools. In fact, vCenter can provide a view of the virtualized servers as a pooled resource, as if they were one giant computer, and manage them as a unit, although there is a limit to the number of physical servers one vCenter management console can cover. Citrix Systems' XenSource unit, the Virtual Iron part of Oracle, and Microsoft's System Center VirtualMachineManager product can do many of these things as well.

A manager using vSphere 4 and vCenter can track what virtual machines are running, what jobs they're doing, and the percentage of their host server that is fully utilized. By moving virtual machines around from physical server to physical server, the data center manager can balance the workload, move virtual machines to servers that have spare capacity, and shut down servers that aren't needed to save energy.

Moving to a private cloud may not necessarily be a goal at many business data centers. But many of the fundamental trends driving efficient computing will point them in that direction anyway. Those who have built out an x86 data center and organized it as a virtualized pool will be well positioned to complete the migration to a private cloud. The better the economics of the cloud portion of the data center look internally, the more likely it is that the rest of the data center will be converted into the private cloud.

There's a second set of economics pushing the corporate data center toward a private cloud as well. Whether the CEO, the CFO, or the CIO likes it or not, there is going to be an explosion of computer power and sophisticated services on the Web, both in large public clouds and among smaller entrepreneurial providers of services that run in the public cloud. They will have much in common in that they will follow the standards of Web services, distribute their wares over the Internet, and keep their cost of operation as low as possible.

Even if top management in enterprises can live with higher costs in its own data centers, and there are good data security reasons for why it will, that still leaves the problem of coordinating everything that could be done for the company by new and increasingly specialized business services in the external cloud.

Such services already exist, but they remain at an early stage of development compared to their potential. If you're dealing with a new customer and he places a large order with your firm, your order capture system goes out on the Web and checks his credit rating before you begin to process the order. If a $500,000 order comes in from a recognized customer in good standing, but the address is different from the one you normally ship to, the order fulfillment system automatically goes out on the Web, enlists an address checking system to see whether the customer has a facility at the address listed, and collects data on whether the customer might expect the type of goods ordered shipped to that location. These services save businesses valuable time and labor by performing automatically things that would take well-paid staff members hours of labor to perform. Another example is online freight handling services, which can now take your order to ship goods between two points; consult their own directories of carriers, tolls, and current energy prices; and deliver a quote in seconds that proves valid, no matter where in the country you're seeking to make a delivery. They will find the lowest-cost carrier with the attributes that you're seeking-shipment tracking, confirmed delivery, reliable on-time delivery-in a manner that surpasses what your company's shipping department could do with its years of experience.

On every front, online information systems are dealing with masses of information to yield competitive results. To ignore such services is to put your business in peril, and indeed few businesses are ignoring them. The next generation may cede key elements of programmatic control to customers, allowing them to plug in more variables, change the destination of an order en route, fulfill other special requirements, and invoke partnerships and business relationships that work for them, ratcheting up the value of such services.

The alignment of the internal data center with external resources will become an increasingly important competitive factor, and many managers already sense it.

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