Saturday, September 12, 2009

Cloud Computing and Hosted Environments

So Brian Sherman from Autotask Twittered the following rhetorical question:

"Continuing research to define differences between cloud computing and hosted environments . . . any suggestions?"

Great question.

What is Cloud Computing? Ugh. We'll be defining that for the next three years. Remember you read it here first.

What is a Hosted Environment? That's somewhat easier. Note that the question is not "What is a hosted service?"

A few thoughts to ponder. I reserve the right to change my mind at any time.

It seems to me . . .

A Hosted Service is a technology based function that is housed outside of the buyer's network and paid for as an operating expense, or provided free of charge to the end user.

So, for example, the following are all hosted services:

- Google Search
- Google Apps
- Bing
- QuickBooks Online
- Hosted Web Service
- Hosted Servers
- Hosted Exchange
- Hosted Spam Filtering

The norm for such services is that they are either free to the user or paid for on an annual or monthly basis. The buyer/user does not own the equipment or code used to make these services work. And, for the most part, the buyer/owner doesn't care how these services work.

That's a key point in the evolution of cloud services: The client doesn't care how it works.

Technology has been easy "enough" for clients to understand that they have taken an interest in their servers. They want to know how many processors and how much RAM they're buying.

This ability to kind of understand some of the technology is what leads some clients to hop down to Best Buy (or go to Dell), get a $399 server, and deliver it to you ready to go.

With hosted services, we need to say the words You don't care how it works. You only care how well it serves your business. Repeat this again and again. Eventually your clients will repeat it back to you. "I don't care how it works. I only care how well it serves my business."


Now, a Hosted Environment is another animal of sorts.

One of the hosted services you can buy is a hosted environment. Building on the previous discussion, I would say this is a Hosted Service in which the client is paying for a working Server or Desktop that they can log into (or their staff can log into).

The key here is the word environment.

You can buy a web hosting package that includes an Exchange mailbox and Blackberry Server connection. So much a month. But you only log into Outlook connect via RPC over HTTPS. You never log into the Exchange Server.

In such a case you're buying a hosted web presence (Don't care how it's done . . .) and a hosted email service (Don't care how it's done . . .). But your environment is your laptop and your Blackberry device. With this hosting package, all the stuff that has to do with maintaining, patching, fixing, and backing up Exchange is someone else's problem.

That's very different from paying for a hosted server. With a hosted server, your people log in, configure it, maintain it, etc. Thus a hosted server gives you a hosted environment.

But the world is not so simple. In many cases, you'll access only enough of the server to create mailboxes and request that something be restored from backup. You still don't really control anything and all the maintenance is on the provider.

It's much easier to understand with a hosted desktop. There you connect (via Citrix, Terminal services, RDP, etc.) and it's just a desktop. You control everything. You can screw up the machine by downloading crap. You can junk it up with so many tool bars that 3/4 of the RAM is dedicated to them.

To you it's just a desktop. Now that's an environment.

Where could this desktop be? Anywhere, of course. It could be in another country. It could be at your ISP. Or at your consultant's colo facility. Or down the hall in the server room.

It could be provided from a Windows Server with Terminal Services, via Microsoft Virtual Machine, through VM Ware, through Citrix, via Parallels at a hosted service, off a big Sun box somewhere, etc.

"I don't care how it works. I only care how well it serves my business."

- - - - -

Both Hosted Services and Hosted Environments are part of the Cloud Computing solution set.

Having hosted servers and hosted services out there somewhere, paid for annually or monthly, has been a part of the technology business forever. These services have evolved considerably.

It used to be that a "hosted" server was a physical server and you could visit your provider and touch it. Now it's most likely a virtual machine inside a cluster somewhere and it's a little harder to find and touch.

The important evolution that's taken place in the last couple of years is that we've eased into a massively virtual environment for delivering services -- and clients haven't noticed.

This is extremely important for our business. The industry has removed physical servers and replaced them with virtual machines. For the most part this has been done smoothly. The client doesn't know the difference. And that makes it much easier to say "I don't care how it works. . . ."

And the even more important part is that we're early in the virtualization era. We will virtualize more machines and services in the next three years than we have in the last ten.

Think about this: If you were the average startup today, would you buy a big server and set it in the next room? No. You'd buy a small server that authenticates logons, manages backups, and lets people access their desktops remotely. Unless those desktops are already hosted.

Certainly your line of business application will be hosted.

Your big computing power will be purchased as needed online from Google or Azure. You'll pay $0.12/minute for processing. Even if you need to render massive designs in a CAD system, you'll just buy the horsepower you need when you need it. Then turn it off and stop paying when you don't need it.

Cloud Computing is a wonderful catch-all phrase to define the collection of services that are deployed from a pool of shared resources and paid for as an operating expense, or provided free of charge to the end user.

Cloud computing might be sold by the minute, as we just mentioned. Or it could be provided on an annual or monthly basis. If you build a private cloud to consolidate a client's technology into a single "service" at the client's site, you will probably have a three year agreement for services.

It is key to reiterate that it's sold as a service. The client is not buying hardware. The client is not purchasing a software license. The client is only buying a service. How it's provided is someone else's headache (yours).

Essentially, when the client says that she just wants it to work . . . and you make it work . . . and you charge for it as a service . . . that's the future.

Call it cloud computing if it helps. Call it a trademarked brand if you want.

Add it to managed services. Or sell managed service on top of it.

But don't fret about it and don't worry about losing your job.

Learn to provide modern technology solutions and you'll be selling "cloud services" and managed services.

- - - - -

I'm not sure I answered any questions. Just some thoughts to pass the time.


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1 comment:

  1. Hey Karl, thought I would finally make some comments here. I absolutely agree with your thinking.

    Whatever people want to call these new "Cloud Tools", they are a welcome addition to my consulting tool kit. I am very excited about them and what they can do. It's been fun to see where they can fit in.

    And yeah, there really is nothing new here, just old tools that are now faster, cheaper and easier to make use of.

    Perhaps the success of "Cloud Computing" will be adding the "On-Demand" option to things that we already have?

    It's like a delivery system that folks do not need to know how it magically appears or works, it just does.

    I am sure there are improvements needed like internet and cloud service reliability and security, but the overall forward momentum on this will not stop. Its going to just keep growing.

    Advanced technology solutions normally reserved for larger corporations and the government are now going to be in reach and on-demand for just about anyone.

    Merging those solutions and how they can now be delivered along with the benefits to your clients, your processes and your profit will be the key to thriving off the cloud.

    And yes, you can build and host your own cloud "delivery systems" if you really want to. But if you can get that same something for 12 cents an hour, rolling your own does not make sense at this time. And that's the whole point of Carr's the "Big Switch".

    However, when a client pays $1000 a month for Hosted Exchange due to storage space required, now thats an opportunity waiting to happen for a consultant like me with a data center down the street.

    The other opportunity is when a competing MSP still charges $600 extra per new machine to add to a network.

    I do see a need to remember to "manage" the use and billing of cloud tools and solutions from a profit standpoint.

    You cannot work yourself out of a profit margin so there has to be a balance found.

    I think it will prove to be just the thing needed to get more clients on the monthly contract band wagon.

    For those folks that refuse to go on contracts or have a regular consultant, emergency break-fix work should always prove to be high profit.

    Well, I better get back to converting these TIB files to VHD and uploading them to my hosted server for a client demo next week.


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