Posts Tagged cloud

Best TCO—System z vs. x86 vs. Public Cloud

IBM recently analyzed various likely customer workload scenarios and found that the System z as an enterprise Linux server could consistently beat x86 machines and even public cloud providers like AWS in terms of TCO.  The analysis was reasonably evenhanded although, like automobile mileage ratings, your actual results may vary.

This blogger has long contended that the z Enterprise Linux Server acquired under the deeply discounted IBM System z Solution Edition program could beat comparable x86 systems not only in terms of TCO but even TCA. Algar, a Brazilian telecom, acquired its initial zEnterprise Linux server to consolidate a slew of x86 systems and lay a foundation for scalable growth. It reports cutting data center costs by 70%. Nationwide Insurance, no newcomer to mainframe computing, used the zEnterprise to consolidate Linux servers, achieving $46 million in savings.

The point: the latest IBM TCO analyses confirm what IBM has been saying. TCO advantage, IBM found, switches to the z Enterprise Linux Server at around 200 virtual servers compared to the public cloud and a bit more VMs compared to x86 machines. View the IBM z TCO presentation here.

IBM further advanced its cause in the TCO/TCA battle with the recent introduction of the IBM Enterprise Cloud System. This is a factory-built and integrated system—processor, memory, network, IFLs, virtualization management, cloud management, hypervisor, disk orchestration, Linux OS—priced (discounted) as a single solution. IBM promises to deliver it in 45 days and have it production ready within hours of hitting the organization’s loading dock. Of course, it comes with the scalability, availability, security, manageability, etc. long associated with the z, and IBM reports it can scale to 6000 VMs. Not sure how this compares in price to a Solution Edition Enterprise Linux Server.

The IBM TCO analysis compared the public cloud, x86 cloud, and the Enterprise Cloud System in terms power and space, labor, software/middleware, and hardware costs when running 48 diverse (a range of low, medium, and high I/O) workloads. In general it found an advantage for the z Enterprise Cloud System of 34-73%.  The z cost considerably more in terms of hardware but it more than made up for it in terms of software, labor, and power. Overall, the TCO examined more than 30 cost variables, ranging from blade/IFL/memory/storage amounts to hypervisor/cloud management/middleware maintenance.

In terms of hardware, the z included the Enterprise Linux Server, storage, z/VM, and IBM Wave for z/VM. Software included WebSphere Application Server middleware, Cloud Management Suite for z, and Tivoli for z/VM. The x86 cloud included HP hardware with a hypervisor, WebSphere Application Server, SmartCloud Orchestrator, SmartCloud Monitoring, and Tivoli Storage Manager EE. Both analyses included labor to manage both hardware and VMs, power and space costs, and SUSE Linux.

The public cloud assumptions were a little different. Each workload was deployed as a separate instance. The pricing model was for reserved instances. Hardware costs were based on instances in east US region with SUSE, EBS volume, data in/out, support (enterprise), free and reserved tier discounts applied. Software costs included WebSphere Application Server ND (middleware) costs for instances. A labor cost was included for managing instance.

When IBM applied its analysis to 398 I/O-diverse workloads the results were similar, 49-75% lower cost with the Cloud System on z. Again, z hardware was considerably more costly than either x86 or the public cloud. But z software and labor was far less than the others. In terms of 3-year TCO, the cloud was the highest at $37 M, x86 came in at $18.3 M, and the Cloud on z cost $9.4 M. With 48 workloads, the z again came in with lowest TCO at $1 M compared to $1.6 M for x86 systems, and $3.9 M for the public cloud.

IBM tried to keep the assumptions equivalent across the platforms. If you make different software or middleware choices or a different mix of high-mid-low I/O workloads your results will be different but the rankings probably won’t change all that much.

Also, there still is time to register for IBM Edge2014 in Las Vegas. This blogger will be there hanging around the bloggers lounge when not attending sessions. Please join me there.

Follow Alan Radding/BottomlineIT on Twitter: @mainframeblog

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Fueled by SMAC Tech M&A Activity to Heat Up

Corporate professional services firm BDO USA  polled approximately 100 executives of U.S. tech outfits for its 2014 Technology Outlook Survey and found them firm in the belief that mergers and acquisitions in tech would either stay at the same rate (40%) or increase over last year (43%). And this isn’t a recent phenomenon.

M&A has been widely adopted across a range of technology segments as not only the vehicle to drive growth but, more importantly, to remain at the leading edge in a rapidly changing business and technology environment that is being spurred by cloud and mobile computing. And fueling this M&A wave is SMAC (Social, Mobile, Analytics, Cloud).

SMAC appears to be triggering a scramble among large, established blue chip companies like IBM, EMC, HP, Oracle, and more to acquire almost any promising upstart out there. Their fear: becoming irrelevant, especially among the young, most highly sought demographics.  SMAC has become the code word (code acronym, anyway) for the future.

EMC, for example, has evolved from a leading storage infrastructure player to a broad-based technology giant driven by 70 acquisitions over the past 10 years. Since this past August IBM has been involved in a variety of acquisitions amounting to billions of dollars. These acquisitions touch on everything from mobile networks for big data analytics and mobile device management to cloud services integration.

Google, however, probably should be considered the poster child for technology M&A. According to published reports, Google has been acquiring, on average, more than one company per week since 2010. The giant search engine and services company’s biggest acquisition to date has been the purchase of Motorola Mobility, a mobile device (hardware) manufacturing company, for $12.5 billion. The company also purchased an Israeli startup Waze  in June 2013 for almost $1 billion.  Waze is a GPS-based application for mobile phones and has brought Google a strong position in the mobile phone navigation business, even besting Apple’s iPhone for navigation.

Top management has embraced SMAC-driven M&A as the fastest, easiest, and cheapest way to achieve strategic advantage through new capabilities and the talent that developed those capabilities. Sure, the companies could recruit and build those capabilities on their own but it could take years to bring a given feature to market that way and by then, in today’s fast moving competitive markets, the company would be doomed to forever playing catch up.

Even with the billion-dollar and multi-billion dollar price tags some of these upstarts are commanding strategic acquisitions like Waze, IBM’s SoftLayer, or EMC’s XtremeIO have the potential to be game changers. That’s the hope, of course. But it can be risky, although risk can be managed.

And the best way to manage SMAC merger risk is to have a flexible IT platform that can quickly absorb those acquisitions and integrate and share the information and, of course, a coherent strategy for leveraging the new acquisitions. What you need to avoid is ending up with a bunch of SMAC piece parts that don’t fit together.

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Bitcoin Means for Micro-Transactions for IT

Bitcoin may be the world’s newest currency. If not, it is certainly the most unconventional. But, it is catching on. As Reuters wrote recently: “Venture capitalists show no sign of shying away from investing in startups related to Bitcoin.”

Think of Bitcoin as electronic money, or maybe virtual money since no government backs it or controls it. Yet, businesses already are doing business with bitcoins. According to Reuters, there are 11.7 million bitcoins in circulation, with a market capitalization of over $1.7 billion. The price (value) fluctuates, but so does the value of conventional currencies although bitcoin fluctuations may be less well understood.

Wikipedia describes Bitcoin as a cryptocurrency—a type of currency that relies on cryptography to create and manage the currency—specifically, the creation and transfer of bitcoins is based on an open- source cryptographic protocol that is independent of any central authority.  Bitcoins can be transferred through a computer or smartphone without involving an intermediate financial institution. The concept was introduced in a 2008 as a peer-to-peer (P2P), electronic cash system.

For IT, Bitcoin promises to the way financial transactions, especially very small (micro) transactions, can be conducted fast and securely with little or no overhead.  Today, about the best you can do is PayPal, but with a slew of middlemen it is not very efficient when it comes to micro transactions.

A product or service selling at a micro price today isn’t really feasible from either an IT perspective or a financial perspective. But, with Bitcoin it might be since it removes a lot of financial and technical overhead.

The same big name investors that invested in Facebook Inc, Twitter, Groupon Inc, and Founders Fund, which includes three founders of PayPal, are putting serious money into Bitcoin investments even though the currency exists solely in cyber form. Proponents see it as the future of money, and in some investing circles, according to Reuters, it has created a buzz reminiscent of the early Internet.

For IT, Bitcoin may be the currency you will need as the global digital economy ramps up big. The benefits on bitcoins or something like it may be tremendous.  For starters, Bitcoin appears to address the problem of micro-transaction payments, where the cost of processing a credit or debit card transaction greatly exceeds the value of the transaction.  If you can do a lot of micro-transactions at almost no cost, the payback adds up.  The value of, say, 10 million half-cent transactions adds up to real money.

Then there is what Bitcoin itself says about the product.  For example, Bitcoin’s high cryptographic security allows it to process transactions in a very efficient and inexpensive way. You can make and receive payments using the Bitcoin network with almost no fees.

Furthermore, any business that accepts credit card or PayPal payments knows the problem of payments that are later reversed because the sender’s account was hacked or they fraudulently claimed non-delivery. The only way businesses can defend themselves against this kind of fraud is with complex risk analysis and increased prices to cover the losses. Bitcoin payments are irreversible and wallets can be kept highly secure, meaning that the cost of theft is no longer pushed onto the shoulders of the merchants.

Accepting credit cards online typically requires extensive security checks in order to comply with PCI compliance. Bitcoin security, however, makes this approach obsolete. Your payments are secured by the network and not at your expense. OK, maybe that is not completely reassuring, but it is as good as or better than you have now.

Finally, there is what Bitcoin calls accounting transparency. Many organizations are required to produce accounting documents about their activity and to adopt good transparency practices. Bitcoin allows you to offer the highest level of transparency since you can provide the detailed information you use to verify your balances and transactions.

OK, it isn’t perfect, but when Europe was precariously balanced on the edge of insolvency and countries like Greece, Cyprus, Italy, and Spain were in grave financial danger interest in bitcoins apparently soared and their value rose dramatically. Bloomberg Businessweek reported that Spaniards apparently were active buyers of bitcoins during the crisis, viewing the currency as a safe hedge against their own government seizing bank accounts and savaging their own conventional currency.

Maybe the most important thing to say about Bitcoin is that it is the future as the digital economy ramps up to rival the conventional economy. As users all over the world turn to smartphones for online commerce, IT will need something like Bitcoin. Besides, you don’t want some all-powerful government dictating even more regulations and issuing compliance mandates. Several governments are skeptical, to say the least, about the idea of Bitcoin but none apparently have shut it down.  As a P2P technology, Bitcoin is governed by the people that ultimately use it, maybe that will even be your own organization, and not by Big Brother.

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Make Your Digital Presence a Valuable Asset

Do you recognize your organization’s digital presence as a valuable asset?  You probably are familiar with some aspects of it, less familiar with others. The organization’s website forms a core component of your digital presence. So do any information or blog portals your organization deploys. Do you conduct webcasts to educate customers or prospects? Webcasts are part of your digital presence too. Your digital presence, in short, is all you do in the digital sphere.

IT probably didn’t initiate the organization’s digital presence way back when the scramble was on to stake out a web presence. Probably marketing agitated for it and IT assigned someone as webmaster. Things have changed dramatically in the decade or two since.

 “Digital is the future and a critical component of business strategy in many industries,” notes Howard Tiersky, CEO of Moving Interactive, which specializes in digital innovation consulting.  In other words, Tiersky tries to increase the value of companies’ digital presence, whatever pieces it may include.

To Tiersky, digital represents the largest transformation the media world has seen in decades—the old rules and ways of launching new products no longer apply. But your digital presence probably extends far beyond the digital media world.

According to Kennedy Consulting, “digital strategy, the integration of digital technologies into companies’ strategies and operations in ways that fundamentally alter the value chain, is emerging as a significant source of competitive advantage.” It is driving dramatic changes in the products and services companies bring to market, as well as how they do business. What we really mean when talking about digital is the entire digital landscape: the Internet, Web (World Wide Web), the Cloud, and all they contain; mobile even plays a key part of it.

Every organization today operates in this rapidly expanding digital landscape. Some have a small digital presence there, maybe just a website that is little more than a static information portal or electronic brochure. Others digitally engage their customers, partners, and other stakeholders much more extensively through social business, online collaboration, webcasts, video, and more.

At this point, the extent of an organization’s involvement in the digital landscape generally mirrors its industry. “In some industries, digital has become the primary way to interact with customers,” says Tiersky.  For customers in media, entertainment, travel, and financial services an effective digital strategy is a critical requirement. In other industries the need is less urgent right now, but before not too long every company in every industry will need a digital strategy that shapes its digital presence.

Most companies began a decade or two ago with a simple static website. Marketing usually was driving the bus with IT lending technical support as needed.  Over the years it grew and expanded; IT increasingly became involved, often reluctantly.

The budget for these kinds of digital initiatives also grew, and the recipient of the budget began to shift. According to Gartner, marketing is purchasing significant marketing-related technology and services from their own capital and expense budgets – both outside the control of the internal IT organization and in conjunction with them.  The upshot, Gartner predicts that by 2017 the CMO will spend more on IT than the CIO. And the volume and value of transactions being generated through the organization’s digital presence has likely become substantial.

The digital landscape and the performance of the organization’s digital presence within that landscape has grown in size to such an extent, as reflected by the increasing amounts of budget allocated to it, that neither IT nor marketing can handle it alone. The scope and complexity of the digital landscape and its many disparate elements has evolved and expanded fast. In addition, the importance of the organization’s digital presence grown even faster; that’s why every organization needs outside help.

And this is why digital consultants, content delivery networks, and cloud-based services providers of all sorts are in demand.  It is time for you as CIO to sit down with the CMO and put together a team that can efficiently optimize your digital presence as a valuable asset going forward.

 The digital landscape is not going away. “We are going through a multi-decade transformation process; every business will shift significantly into digital world,” says Tiersky.  As that happens you want to make sure IT is playing a key role.

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Sorting Out the Data Analytics IT Options

An article from McKinsey & Company, a leading management consulting and research firm, declares: “By 2018, the United States alone could face a shortage of 140,000 to 190,000 people with deep [data] analytical skills as well as [a shortage of] 1.5 million managers and analysts with the know-how to use the analysis of big data to make effective decisions. Might this be your shop?

Many companies today are scrambling to assemble an IT data analytics infrastructure to support data analytics. But before they can even begin they have to figure out what kind of analytics the organization will want to deploy. Big data is just one of many possibilities and the infrastructure that works for some types of data analytics won’t work for others.

Just off the top of the head this blogger can list a dozen types of data analytics in play: OLAP, business intelligence (BI), business analytics, predictive analytics, real-time analytics, big data analytics, social analytics, web analytics, click stream analytics, mobile analytics, brand/reputation analysis, and competitive intelligence. You’ve probably have a few of these already.

As advanced analytics pick up momentum data center managers will be left trying to cobble together an appropriate IT infrastructure for whatever flavors of analytics the organization intends to pursue. Unless you have a very generous budget you can’t do it all.

For example, big data is unbelievably hot right now so maybe it makes sense to build an infrastructure to support big data analytics. But predictive analytics, the up and coming superstar of business analytics, is an equally hot capability due to its ability to counter fraud or boost online conversion immediately, while the criminal or customer is still online.

BI, however, has been the analytics workhorse for many organizations for a decade or more, along with OLAP, and companies already have a working infrastructure for that.  It consists of a data warehouse with relational databases and common query, reporting, and cubing tools. The IT infrastructure, for the most part, already is in place and working.

On the other hand, if top management now wants big data analytics or real time data analytics or predictive analytics you may need a different information architecture and design, different tools, and possibly even different underlying technologies. Big data, for example, relies on Hadoop, a batch process that does not make use of SQL. (Vendors are making a valiant effort to graft a SQL-like interface onto Hadoop with varying degrees of success.)

Real-time analytics is just that—real-time—basically the opposite of Hadoop. It works best using in-memory data and logic processing to speed the results of analytic queries in seconds or even microseconds. Data will be stored on flash storage or in large amounts of cache memory as close to the processing as it can get.

A data information architecture that is optimized for big data’s unstructured batch data cannot also be used for real time analytics.  And the traditional BI data warehouse infrastructure probably isn’t optimized for either of them.  The solution calls for extending your existing data management infrastructure to encompass the latest analytics management wants or designing and building yet another IT data infrastructure.  Over the past year, however, the cloud has emerged as another place where organizations can run analytics, provided the providers can overcome the latencies inherent in the cloud.

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IT Chaos Means Opportunity for the CIO

Hurricanes, hybrid superstorms, earthquake-tsunami combinations, extreme heat, heavy snow in April are just a few signs of chaos. For IT professionals specifically, chaos today comes from the proliferation of smartphones and BYOD or the deluge of data under the banner of big data. A sudden shift to the deployment of massive numbers of ARM processors or extreme virtualization might trigger platform chaos.  A shortage of sufficient energy can lead to another form of chaos. Think of it this way: chaos has become the new normal.

Big consulting firms have latched onto the idea of chaos. Deloitte looks to enterprise data management to create order out of chaos. At Capgemini, the need of organizations to increasingly deal with unstructured processes that ordinary Business Process Management (BPM) solutions were not designed to cope with can be enough to lead to chaos. Their solution: developing case management around a BPM solution – preferably in conjunction with an Enterprise Content Management system – solves many of the problems

Eric Berridge, co-founder of Bluewolf Group, a leading consulting firm specializing in Salesforce.com implementations, put it best when he wrote in a recent blog that CIOs must learn to harness chaos for a very simple reason: business is becoming more chaotic. Globalization and technology, which have turned commerce on its head over the past 20 years, promise an even more dizzying rate of change in the next decade.

Berridge’s solution draws on the superhero metaphor. The CIO has to become Captain Chaos, the one able to overcome a seemingly insurmountable level of disarray to deliver the right value at the right time. And you do that my following a few straightforward tips:

First, don’t build stuff you don’t absolutely have to build. You want your organization to travel as light as possible. If you build systems you are stuck with them. Instead, you want to be able to change systems as fast as the business changes in response to whatever chaos is swirling at the moment. That means you need to aim for an agile IT infrastructure, probably one that can take tap a variety of cloud services and turn them on and off as needed.

Then, recognize the consumerization of IT and the chaos it has sparked.  This is not something to be resisted but embraced and facilitated in ways that give you and your organization the measure of control you need. Figure out how to take advantage of the consumerization of IT through responsive policies, elastic infrastructure, and flexible security capabilities.

Next, encourage the organization’s R&D and product development groups to also adopt agile methods and approaches to innovation, especially through social media and other forms of collaboration. Even encourage them to go a step further by reaching out to customers to participate.  Your role as CIO at this point is to facilitate interaction among the parties who can create successful innovation.

Finally, layer on enough just-in-time governance to enable the organization to manage the collaboration and interactivity. The goal is to rein in chaos and put it to work. To do that you need to help set priorities, define objectives, execute plans, and enforce flexible and agile policies—all the things that any successful business needs to do but do so in the context of a chaotic world that is changing in ways you and top management can’t predict.

As CIO this puts big demands on you too. To start, you have to keep your finger on the pulse of what is happening with the world at large, in business and with technology. That means you need to figuratively identify and place sensors and monitors that can tip you off as things change. You also can’t master every technology. Instead you need to identify an ever-changing stable of technology masters you can call on as needed and familiarize yourself with the vast amount of resources available in the cloud.

In the end, these last two points—a stable of technology masters you can call upon and deep familiarity with cloud resources—will enable you to deliver the most value to your organization despite the chaos of the moment. At that point you truly become Captain Chaos, the one your organization counts on to deal with ever changing chaos.

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Cloud Management Platforms (CMP) Come of Age

Every organization deploying applications to the cloud will want CMP, advises Gartner in its Cloud Management Platforms, 2013 report.

In a different Gartner report, titled Cool Vendors in Cloud Management, the researchers note: As enterprises deploy private clouds, interest in managing them is rising. Innovative CMP vendors—what Gartner dubs Cool Vendors—can help manage infrastructure resources to deliver service quality, security, and availability for workloads running in cloud environments.

“The benefits become obvious as enterprises start to deploy serious business workloads in the cloud, and these benefits all address bottom line concerns,” says Steven Henning, CMO, ServiceMesh.  The benefits revolve around grabbing new market opportunities fast and accelerating the introduction of new business capabilities that bring in customers and revenue.  ServiceMesh is one of the four cool CMP vendors named in Gartner’s report along with Cloupia, Eucalyptus, and Nimbula.

For DevOps to really hum, particularly when working at the speed of the cloud, it must work with IT to provision policies and governance across the software development lifecycle to create a common application platform and resources that support any language, streamline the entire application lifecycle, and generate market-ready applications faster than competitors. That’s why you want CMP technology.

CMP helps IT too. Often IT overhead and infrastructure management inhibit the allocation of developer resources and slow the organization’s ability to drive innovation at the speed of market demand. But by provisioning applications across the application lifecycle with pre-configured IT production-like containers for the application code, both IT and developers bypass the bottlenecks that occur at each phase of the software development lifecycle and speed delivery of applications to the cloud.

As 451 Research notes: Working where application development meets IT operations, DevOps teams moving to the cloud need tools to design application architecture, deploy it into production, and prevent unauthorized configuration drift.

451 Research was particularly impressed with ServiceMesh’s Agility Platform. Designed as an enterprise-class CMP, Agility embodies ServiceMesh’s conviction that platforms and applications drive business value, not infrastructure. Accordingly, the company believes that cloud governance has to be both application-centric, for today’s needs, and extensible, for the needs of tomorrow. Not surprisingly, the company is a major advocate of collaboration between application development teams and IT operations teams.

The 451 researchers observed that Agility Platform’s existing policies, event correlation capabilities, and application context awareness can all be harnessed to advance automated configuration management. It also plays nicely with the in-place CMDB, Puppet Master Server, and any other third-party tools.  In short, it is designed to address exactly the needs of enterprise DevOps.

Gartner, too, liked Agility Platform:  It identifies ServiceMesh’s strengths as a strong policy engine and lifecycle management. Furthermore, it is differentiated by connectors to third party providers and integration with other management systems. Finally Agility Platform provides policy-driven management, governance, security, and lifecycle management capabilities for private or hybrid cloud initiatives;  enabling IT organizations to manage all phases of the cloud computing lifecycle including the plan, build, and run stages by leveraging its policy-based framework. In addition, ServiceMesh’s cloud-native architecture can expand automatically through horizontal scaling to handle increasing system demands, according to Gartner.

But as Gartner noted, there are three others among its cool vendors in cloud management:

Cloupia offers its Unified Infrastructure Controller (UIC) as its cloud management platform (CMP). The UIC is software that enables the management of both private and public cloud services. It supports a self-service interface, workflow engine, and an orchestrator for virtual machine (VM) and physical infrastructure provisioning, Gartner reports.

Eucalyptus is a little different by providing Infrastructure-as-a-Service (IaaS) capabilities through an open-source software-based infrastructure for implementing on-premises clouds on existing infrastructure. The company’s strategy, according to Gartner, is to remain an IaaS platform, continue to advance its functionality, and build out a partner ecosystem to offer a more complete cloud solution.

Nimbula offers Director 2.0, which provides capabilities to build, manage, scale, and secure cloud environments across on-premises pools of virtualized IT resources as well as resources in public clouds, such as Amazon’s EC2. Like most of the others it uses the representational state transfer (REST) API to interface with cloud resources—both on premise and in public clouds—and it provides automation to manage the allocation of those resources, similar to ServiceMesh’s policy-based automation engine.

No vendor provides a complete CMP solution yet although ServiceMesh comes close. Still, you may need additional tools or may have to integrate multiple CMP approaches. But the CMP market is evolving fast; if you wait six months, each product will be better. Just don’t wait too long or you may miss fleeting opportunities. Tools like these enable DevOps to move that fast.

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