Cloud Value Proposition

Anupinder Singh
Objectives
● Measuring the value on different perspectives
● Laws of Cloudonomics
● Challenges in cloud adoption
● Behavioral factors involved while adopting cloud
● Computing basic cloud cost and total cost of Ownership
“A Cloud is an infrastructure that can be partitioned and provisioned, and
the resources are pooled and virtualized.”

“If the cloud is available to the public o a pay-as-you-go

basis, then the cloud is a public cloud and the service is
described as a utility.”

“If the cloud is captive in an organization’s infrastructure(network), it is

referred to as a private cloud.”

“When you mix public and private clouds together, you

have hybrid cloud.”
“Cloud Computing is particularly valuable because it shifts capital
expenditure into operating expenditure.”

“Cloud computing has the benefit of decoupling growth from

cash on hand or from requiring access to capital.”

“Cloud computing shifts risk away from an organization and onto the
cloud provider.”
“Analysis of the Potential Cloud Computing must
account for all the possibilities.”
Measuring value on Cloud Service Provider
● Optimization: The infrastructure already exist and is underutilized, like AWS.
● Profit: Due to economy of scale.
● Strategic: Extends companies products,like Microsoft
● Extension: by offering additional services, Google, IBM etc.
● Presence: Establish before other take over the market, google app engine
● Platform: become a hub for various independent software vendors, like playstore
May some optimize like this …..
Measuring value on Cloud Consumers
● Low barrier to entry: No upfront expenditure on setting up inhour infrastructure.
● Elasticity & Scalability: Ability to choose right size resource and can have access
to unlimited pool of resources whenever required.
● Utility: Pay as you go model.
● Outsourced IT management: simplified maintenance and upgrades.
● Reliability: auto Load balancing and failover system.
Laws of Cloudonomics
● Utility service costs less even though they cost more.
● On demand trumps forecasting.
● The peak of the sum never greater than the sum of peaks.
● Aggregate demand is smoother than individual.
● Average unit cost are reduced by distributing fixed cost over more units of output.
● Superiority in numbers is the most important factor in the result of a combat.
● Space-time is a continuum.
● Dispersion is the inverse square of latency.
● Don’t put all your eggs in one basket.
● An object at rest tends to stay at rest.
Challenges in Cloud Adoption
● Data Privacy.
● Storage.
● Monitoring.
● Network Bottlenecks.
● Reputation.
● Security.
● Service Level Agreements.
● Software Stacks.
● Vender lock-in.
● Accounting management.
● Compliance.
Behavioral Factors in Cloud Adoption
Homework Reading
Measuring Cloud Computing Cost
The Individual unit cost of cloud computing is calculated as:
Measuring Cloud Computing Cost..
Individual unit in Private cloud cost is as:
Measuring Cloud Computing Cost..
For more that one unit in a private data center is:

The additional cost of IT staff is additional to above cost

Total cost of ownership = Cost of datacenter + Additional IT staff

Measuring Cloud Computing Cost..
Cloud cost is actually calculate as instance of different set of services (and total cost of
ownership is multiplied by the time period for which it will be hired):
Queries?