Cloud Computing: Simplified

Just about everyone thinks they understand what is cloud computing and the way it operates.

Now the thing is — just about everyone is wrong.

The 21st century has been a harbinger for a new range of performance economic models — the gig economy. The advent of ground-breaking and disrupting models like Uber, Ola, Airbnb, and Oyo, has fundamentally changed the way businesses operate.

In an era when we are at the cusp of a digital transformation, it is imperative for the management of non-tech businesses to focus on prioritizing objectives and ensuring they are executed with precision. When you stare such a mammoth transformation, it is often advised to think of ways to own the entire infrastructure driving value.

There are  two  articles on how  Coca-Cola  and  Starbucks  are moving towards digitization which you might find interesting.

However, with technology, it is different — servers, tech maintenance teams, SAP teams, DevOps teams, developers and many more. Luckily it’s an expired gospel that you need to have more to do more as tech makes complex things simpler. The trend these days is to do more with less; less physical inventory, in this case, that is. What if you could press a button for storage and computing power rather than taking the headache for owning and maintaining a whole bunch of mainframe computing hardware?

Well, there’s no need to re-emphasize how important the cloud is — we all know it’s the big deal. There are expert estimates from Gartner which suggest the cloud market nearing $ 200 billion by the end of this year. Furthermore, the cloud industry is the most profitable in the entire technology world. Currently, there are a few established companies which are leading this space but seeing the potential for scale and growth, the media is still ablaze with new players trying to enter this space. However, with all the hype surrounding cloud computing, it is imperative to understand that cloud computing serves a single transformative, economic purpose (just like AI as I analyzed here) — sharing computing resources than owning them.

In simple terms, cloud computing is a model for allowing convenient, on-demand access from anywhere, to a shared pool of computing resources, anytime. This is inclusive of, but not limited to, servers, storage, applications, networking, and services which can be rapidly provisioned and easily released.

The cloud model includes the following essential characteristics:-

1. Self-service on-demand — This allows users to quickly get access to a plethora of IT resources which they want automatically without any human intervention.
2. Broad network access — This means the ability to access a service from any standard device like mobiles, tablets, PCs, and laptops provided they are connected to the network.
3. Resource pooling — The computing resources viz. network, storage, applications are shared across multiple locations.
4. Flexibility — This allows clients to quickly expand or shrink the capabilities of their cloud to match the level of user demand ensuring that the customer experience doesn’t go discrete. Further, this also allows you to monitor the level of resource usage and is charged accordingly.

Typically the clients choose from one of the three following options for cloud deployment.

• Private Cloud — This is designed for the exclusive use of a single corporation where the infrastructure is generally owned, managed, and operated within the firewall of the organization.
• Public Cloud — This infrastructure is open for use by the general public. The service provider owns, manages, and operates this. It resides in the provider’s premises.
• Hybrid Cloud — A hybrid cloud makes it possible to access both public and private cloud resources from a single management environment.

There are three types of IT services available today through the public, private, and hybrid cloud —

• SaaS — Software as a Service
• PaaS — Platform as a Service
• IaaS — Infrastructure as a Service

To gain a better understanding of the aforementioned terms, it is important to understand the underlying components and layers which make up the cloud. Let us skim through the layers —

1. Internet
2. Storage
3. Hardware
4. Virtualization
5. Operating System (OS)
6. Runtime
7. Data
8. Application

SaaS — Software as a Service

It allows the users to access the application without having to manage or control the delivery. SaaS basically provides the entire bundle mentioned above (from 1–8) as a service so that the user doesn’t have to worry about the underlying cloud infrastructure. Some notable examples are — Google Apps, NetflixSalesforce, Cisco WebEx etc.

PaaS — Platform as a Service

If an enterprise is using Paas, they will only have to manage the data and application layer (layers 7 and 8) from the entire bundle mentioned above. It lets the users access a software development environment to allow them to create their own cloud applications using programming languages, libraries, packages, services, and tools. It lets the user control the applications also letting them control some part of the configuration settings for the application hosting environment. It is important to note that they have no control over the infrastructure.

Applications using PaaS inherit cloud characteristics such as scalability, high-availability, multi-tenancy, SaaS enablement, and more. Enterprises benefit from PaaS because it reduces the amount of coding necessary, automates business policy, and helps migrate apps to a hybrid model. For the needs of enterprises and other organizations, Apprenda is one provider of a private cloud PaaS for .NET and Java.

IaaS — Infrastructure as a cloud Service

It enables clients to quickly and easily provision full computing resources including processing, networks, and storage. Clients are only managing from the OS level to the Application level (from level 5 to 8). It helps extend the current data center infrastructure for temporary workloads (e.g. increased site traffic during online sales during the festive season).

This is one of the most commonly understood Cloud service as it is a self-service model for accessing, monitoring, and managing remote datacenter infrastructures. It saves the clients from the hassle of purchasing the hardware upright and allow them to purchase IaaS based on consumption, similar to electricity or any other utility billing. Users gain the flexibility of getting the entire infrastructure as a service on top of which they can install any required platform. This saves businesses a lot of money and helps them in their surge towards staying relevant in the digital economy.

Common examples include AWS (Amazon Web Services), Microsoft Azure, Google Cloud etc.

For corporate functionalities, most data centers today are highly virtualised. It requires authorization and provisioning a virtual machine is a cumbersome task. This was a pain point which led to the inception of Public infrastructure as a service cloud offerings grew rapidly because of the need for on-demand computing resources. With cloud, any individual or enterprise could provision a server themselves, as and when needed, run it for as long as they required it and then shut it down. The vendor gets the computing cost for only the resources which were used. Therefore, for accessing these resources for smaller time, public cloud often works the best. Private cloud extends the benefits of public cloud to the clients own data center enabling them to adapt and react faster to changing business and customer needs. Further, they can also reduce costs, improve efficiencies and improve efficiency of their IT environment.

Thus, with public, private, and hybrid cloud offerings, enterprises are better able to develop a flexible and agile infrastructure to meet the needs of their business while reducing costs.

Dominating players in this space:-

Cloud computing is increasingly becoming a critical piece of the operations of giant technology companies like Google, Amazon, Microsoft, Alibaba, Tencent, and Baidu. These are core digital companies for whom handling computing resources is in their DNA. They have the experience and expertise to operate and maintain compute resources while also making it accessible to enterprises.

Let us have a look at how the industry looks at this point with a host of players trying to dominate it. True that Amazon was the first to actually see it as an opportunity and pioneered an entirely new industry known as the IaaS with their Amazon Web Services (AWS) and haven’t looked back ever since. AWS accounts for almost all of Amazon’s operating income and since they had an unusual 7-year head start, their services are by far the most evolved and functionally rich. However, the space is hot and it isn’t what it seems.

The space is nascent and is constantly evolving with IoT, Machine Learning and Artificial Intelligence going to be the major difference makers. Let us look at how companies are trying to make a mark —

• AWS — AWS has made their DeepLens camera available to the developers earlier this year. This is their move to test out their machine learning on edge devices. They are also betting big on their AR platform, Sumerian as they believe it is going to simplify AR/VR development bringing down costs and time, garnering business use cases for the enterprise. They are ahead and dominating a space but aren’t happy with it and want to further their lead.
• Microsoft Azure — Azure has to be the biggest threat to AWS. Ever since, Microsoft has become a cloud and mobile first company, they have only moved from strength to strength. They have been an enterprise company and have a rich history of building B2B products for their clients. They want to enable every enterprise to use AI capabilities. Microsoft has the edge because they have the best deployment and development tools on top of which they have the best visualization technology. Further, with their acquisition of Github and LinkedIn, their cloud offerings stand a chance to be bolstered. Developers love Github and would be Azure’s consumer. LinkedIn has the potential to provide insights about what businesses and developers want while Azure providing them a plethora of capabilities to convert their wild dreams into reality. This sort of vicious cycle will ensure accelerated cloud usage for Microsoft.
• Google Cloud — While Alphabet have played it safe and named their cloud offerings as ‘Google Cloud’, they have been largely secretive about what they are doing especially in the PaaS and IaaS offerings. This might backfire as developers are preferring AWS and Azure for Cloud IoT platforms. They have an insatiable lead in the SaaS space and would probably prefer the same space when it comes to lending their ML and AI capabilities as this (s)could be their ace.
• BAT players (Baidu, Alibaba and Tencent) — These companies are trailing their US counterparts but they operate in the largest internet consumer in the world. This gives them a lot of edge because they can still try to vie for US clients while it would be incredibly difficult the other way around.
• Niche players — IBM, Oracle, Salesforce, and SAP are also trying to be front runners here. They have their own niche variety of offerings ranging from CRM (Customer Relationship Management), HCM (Human Capital Management) and Platform. However, without an unlikely event of a misstep by the established players, it will be tough for them to catch up.

Moreover, the M&A activities in the cloud space are really hot too. Companies are spending irrationally to consolidate their position in the cloud and try an find the little differentiator that will set them apart. Time for some math —

1. Microsoft paid $33.7 billion for LinkedIn and Github.
2. Salesforce paid $6.5 billion for Mulesoft.
3. IBM paid $33.4 billion for Red Hat.

Speculations suggest that Red Hat and Github were massive re-branding exercise while Mulesoft might have been an operational necessity but there’s no denying that it is all happening because of the hype. With more players, legacy and agile startups, entering this space, expecting investment bankers to be free anytime soon would be an understatement. Cloud is nicely profitable but the toss is in the SaaS space between players like Adobe, Salesforce, and Oracle and there’s something to be pondered on recurring revenue with a dash of lock-in.

Thanks for reading it through and I hope it was worth the while. In case, you liked it, please give it a few claps. In case you like it, I will consider writing a follow-up article on how the business front of Cloud is shaping up in the last few years.

You can follow  Pratyush Choudhury for breakdowns of the hottest technology trends, translations of the business use cases involving tech buzzwords, and analysis of the business strategies that power the tech industry.