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The Economic Benefit of Cloud Computing

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Cloud Computing Evolves: An Interview with Mats Johansson

By G C Network | June 6, 2019

Recently, Ericsson Digital released an amazing report on Edge Computing and 5G. In it, they explained how distributed cloud computing is paving the way for the future of network communications. They also advised telecommunications operators, not to wait for 5G but they should build tomorrow’s networks today! Given the cost, effort and focus such a commitment…

The IoT Nexus: Bosch Connected World 2019 in Berlin

By G C Network | May 11, 2019

Next week, I will be influencing #LikeABosch as I accept an invitation from the company to attend Bosch ConnectedWorld 2019 (BCW19) in Berlin, Germany. This is one of the world’s largest international forums for the Internet of Things (IoT) and brings together the best minds to energize the co-creation of connected products and solutions invented for life. The conference,…

Survive and Thrive With Digital Transformation

By G C Network | April 17, 2019

First cloud computing then multi-cloud. How can we get ahead of this digital transformation nightmare? These are the laments heard in conference rooms and board meeting around the world. While the goal seems simple, adopting and migrating to a cloud service provider requires much more than executive willingness and a sharp IT organization. A lot…

The “George Jetson” of Today

By G C Network | April 13, 2019

He grew up in Silicon Valley, landed his first job at Apple Computers, was introduced to Nobel Prize winners by his dad and today, he takes a self-driving car to work so that he can squeeze in a few morning conference calls with the US east coast Team. Is this George Jetson!? No. It’s just…

MWC19: Where Telecommunications and Cloud Meet

By G C Network | March 23, 2019

As a cloud solution architect, my passion is learning the details about how cloud computing uniquely supports specific business cases. This curiosity is what drove my excitement when Ericsson invited me to work with them during Mobile World Congress 2019 in Barcelona, Spain. As the largest mobile event in the world, MWC Barcelona brings together the latest…

Tulane University SoPA Selects “Architechting Cloud Computing Solutions”

By G C Network | February 16, 2019

Last week, Packt Publishing announced that “Architecting Cloud Computing Solutions” by Kevin L. Jackson and Scott Goessling was selected for use by the Tulane University School of Professional Advancement, Applied Computing Systems & Technology Program as the textbook for their mandatory Enterprise Architecture – Hardware course starting Spring Semester 2019. I am proud and honored to be trusted by such a prestigious institution. Being an “Amazon…

5G Wireless Technology Connecting Healthcare

By G C Network | February 16, 2019

Healthcare is in the middle of massive change. Called digital transformation by many, this term describes the industry’s pursuit of the many promises offered by connected patients, connected caregivers, and connected hospitals. While the goals of this transformation are many and varied, a recent HIMAA Media survey revealed the top four as: Seeking improved quality of care…

Maria Lensing: The Network Platform for Healthcare’s Future

By G C Network | February 16, 2019

As a girl, Maria and her family traveled to Memphis, Tennessee to get cancer treatment for her sick brother. The miracle she observed, as the healthcare providers saved her brother’s life, ignited a passion for healthcare. Unfortunately, that passion didn’t apply to blood, so she went into electrical engineering and biomedical engineering, eventually falling in…

How “Big Iron” Does “Big Regulation”

By G C Network | January 10, 2019

According to Verizon, there were over there were over 53,000 security incidents in 2017, with over 2,200 of those identified as confirm data breaches. A Ponemon Institute study also showed that companies experiencing a data breach took an average of 147 days to detect that breach. These statistics serve a key motivator of Stuart McIrvine, Director…

Mainframe Synergies for Digital Transformation

By G C Network | January 10, 2019

In July  of 2018, Broadcom announced its intentions to acquire CA Technologies. In the press release, Hock Tan, President and Chief Executive Officer of Broadcom, said: “This transaction represents an important building block as we create one of the world’s leading infrastructure technology companies. With its sizeable installed base of customers, CA is uniquely positioned…

(The following is the Executive Summary of a recent NJVC Executive Whitepaper. The full version is available at NJVC.com )

Cloud computing, as defined by the National Institute of Standards and Technology, is a model for enabling “… convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” NIST is implying the economies of scale that go with cloud computing when it refers to a pool of configurable computing resources.

Cloud computing is often referred to as a technology. However, it is actually a significant shift in the business and economic models for provisioning and consuming information technology (IT) that can lead to a significant cost savings. This cost savings can only be realized through the use of significant pooling of these “configurable computing resources” or resource pooling. According to NIST, this capability is an essential characteristic of cloud computing. Resource pooling is the ability of a cloud to serve multiple customers using a multi-tenant model with different physical and virtual resources dynamically assigned and reassigned according to demand.

Cloud computing economics depends on four customer population metrics:

  1. Number of Unique Customer Sets (n)
  2. Customer Set Duty Cycles (λ,f)
  3. Relative Duty Cycle Displacement (t)
  4. Customer Set Load (L)

These metrics drive the cloud provider’s ability to use the minimum amount of physical IT resources to service a maximum level of IT resource demand. Properly balancing these factors across a well characterized user group can lead to approximately 30-percent savings in IT resources, and enables the near real-time modification of the underlying physical infrastructure required for the delivery of the desired “illusion of infinite resources” synonymous with a cloud computing user’s experience.

When implemented properly, the cloud computing economic model can drastically reduce the operations and maintenance cost of IT infrastructures. A 2009 Booz Allen Hamilton (BAH) study concluded that a cloud computing approach could save 50 to 67 percent of the lifecycle cost for a 1,000-server deployment. Another Deloitte study confirmed that cloud deployments delivered greater investment returns with a shorter payback period when compared to the traditional on-premise delivery option.

In considering cloud computing for the Intelligence Community, security is an obvious concern. Given the legal and operational concerns, classified information should always be processed in properly protected and certified IC private or community clouds. If a secure cloud model can be designed, economic savings can certainly be realized.

When used to process unclassified information, sharing cloud computing resources can nominally provide the operational advantages of a private cloud with a cost closer to that of a public cloud due to the expected economies of scale from combined user communities.

The federal government is currently deploying a federal community cloud. Officially referred to as the General Services Administration Infrastructure as a Service Blanket Purchase Agreement (GSA IaaS BPA; item #4 in the White House CIO’s “25 Point Implementation Plan to Reform Federal Information Technology Management”), this Government Wide Acquisition Contract (GWAC) vehicle is designed to implement a community cloud economic model to support the federal government. The Office of Management and Budget (OMB) expects this community to provide approximately $20 billion in cloud computing services to a community made up of more than 25 agencies.

Using the BAH study as a guide, and assuming that community cloud economies mimic those expected from a hybrid cloud, transitioning IT services from an agency-owned IT infrastructure to the GSA IaaS platform should deliver benefit cost ratios of approximately 7:1.

Cloud computing provides some strong benefits and economic incentives. Selecting a public, private, hybrid or community cloud implementation will depend on a customer’s specific application, performance, security and compliance requirements. Proper deployment can provide significant savings, better IT services and a higher level of reliability.

  1. Lower Costs
  2. Cap-Ex Free Computing
  3. Deploy Projects Faster, Foster Innovation
  4. Scale as Needed
  5. Lower Maintenance Costs
  6. Resiliency and Redundancy
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10 Comments

  1. Shivan on October 3, 2011 at 7:19 pm

    Hi Kevin – thanks for the article, and more importantly, pointing me to your white paper. I've often heard, both personally as an employee of RightScale, that the main interest in cloud computing, be it private or public, irrespective of security concerns, focuses on the business agility enabled by cloud and the inherent innovation as a result. It seems, in your white paper and this executive summary, you list 'lower costs' as the primary benefit of cloud. Can you comment if this is the view of cloud via the federal government's eyes and if so, do you see that evolving as they mature in their use of cloud?

    Thanks in advance.


    Shivan

  2. Kevin L. Jackson on October 10, 2011 at 1:12 pm

    Most federal agencies are moving to cloud based on the "Cloud First" policy and the promise of reduced IT infrastructure cost. Unfortunately, many of the same agencies aren't actually implementing the appropriate operational or economic model. This failure is due to a misplaced focus on technology. Technology vendors also cause marketplace confusion by labeling everthing they do as cloud computing.

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    now I know its importance… thanks a lot.. I've been looking about this topic yet hard to find the real one and I found yours! Truly helpful thanks..

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