The Frugal Networker

Infrastructure as a Service is that part of cloud computing that allows you to lease and manage computing infrastructure for your business needs. Computing infrastructure includes virtual machines (VMs), operating systems, middleware, runtime components, network, storage, data and applications. Cloud computing vendors provide the necessary underlying physical hardware (servers, network, storage) that they own and manage transparently in the background. The two worlds have little crossover. The cloud vendor and customer have a non-intrusive relationship with one another just as you currently do with your web hosting provider. They’re there when you need help but their direct involvement in your business is zero.

The cloud vendor also supplies you with a management interface in which you work with your infrastructure. You’re responsible for license management for your operating systems and software. You pay for compute resources per CPU, per hour, per gigabyte of bandwidth, per gigabyte of storage or a combination.

The Three Faces of IaaS

IaaS isn’t as simple as a single offering but the boundaries between types are well-drawn. First, you have the Private Cloud. Private IaaS is exactly what you think it is—a dedicated, private infrastructure. Think of your own data center setup as a Private Cloud IaaS. Of course, unless you have cloud infrastructure (virtualization, storage, extreme redundancy, etc.), it isn’t officially a cloud but you get the idea.
On the other end of the spectrum is the Public Cloud. A Public Cloud is a 100 percent hosted solution. You own no hardware. It is the Public Cloud that is the focus of this article.
If you combine the two cloud concepts, you have what’s known as a Hybrid Cloud. A Hybrid Cloud can be any percentage mixture of Private and Public infrastructures for your company. Most companies will evolve into this type of cloud from a traditional, private hardware infrastructure to a cloud-based one.

A Hybrid Cloud is the solution that cloud vendors recommend to their customers who’ve grown their own data centers and that are comfortable with that model. Mix your Private Cloud with the Public Cloud for a solid and complete solution for you and your customers. A Hybrid Cloud mixes the security and control of a traditional data center with hosted cloud infrastructure. Typically, companies will transition their disaster recovery efforts to the Public Cloud while retaining production operations in-house in a Private Cloud.

Industry experts view Hybrid Clouds as a transitional step to a full Private Cloud. They see this process as a stepwise migration. As leases and service contracts expire, companies will move their computing workloads from private data center architecture and Private Clouds to virtualized architecture in the Public Cloud.

Analysts predict that by the end of 2012, as many as 20% of businesses will exist completely in the Public Cloud.

Cost Savings But Not Where You Think

Cost tops the advantages of IaaS cloud computing. To purchase the same amount of physical computing power, to manage that computing power and to house that computing power costs many times more than bulk pricing from a cloud vendor. IaaS is basically hardware outsourcing. You don’t own the hardware. You don’t manage the hardware. You use the hardware but its care and feeding are not your problem.

Put whatever moniker on cloud computing’s IaaS that you want but it’s really no different than what you probably do now in your current data center. Unless you own your data center, pay its staff, maintain the facility and physically service your own hardware, then you’re already using hardware (infrastructure) as a service. The primary difference in a standard data center space lease and IaaS is that you don’t have to deal with any hardware.

IaaS frees you from purchasing or leasing hardware, having it shipped to the data center, paying someone to deploy it into a rack, paying for that rack space, managing the hardware throughout its life cycle and taking care of its disposal. That’s why traditional data center infrastructure management is expensive. You have to pay for the hardware, you have to pay for maintenance, you have to pay for management and you have to pay for the business services that required all of this expense in the first place.

On the other side of the argument, cloud opponents state that your TCO is no lower with IaaS than with traditional data center service. This might be true from a pure hardware point-of-view. After all, the IaaS vendor has to pay for the data center infrastructure and pass his costs on to you. However, the savings is in the form of labor costs.

Count the number of full-time employees (FTEs) you have on hand right now to manage your infrastructure. Now, count the number of FTEs you’ll require by not managing any hardware. Is there a significant difference between the two numbers? Add up the total cost of those FTEs who you won’t need anymore and multiply that number by three years (standard hardware lease length). That number is your savings.

Since your new virtual infrastructure comes with online management tools for creating new servers, installing operating systems, presenting storage and configuring network, you’ll need fewer FTEs to handle the job.

Lower Entry Barriers and Rapid Innovation

IaaS also lowers the financial and logistical barriers for startup businesses to enter the market and push their products and services to customers in a fraction of the standard timeframe. The IaaS model allows startups to start small and grow to any size on the pay-as-you-go plan. There’s not a huge outlay of capital on hardware and FTEs that traditionally built businesses have experienced.

Another advantage of IaaS is rapid innovation. For example, if you have an idea for a new service today, you could spin up a virtual test infrastructure for a few hundred dollars, test your service, demo your service and deploy a working business model in a matter of days instead of months. In a time when windows of opportunity are often very small, IaaS makes sense for who need a quick service build-out to show investors or potential customers.

Embrace the Elastic and Mobile Cloud

IaaS also makes your company mobile, elastic and global. You can manage your systems from anywhere, you can shrink and grow your computing infrastructure as needed and you can keep your global customers happy with zero downtime. And, since you’re not tied to a server room or data center, your office location is irrelevant. You can work from home and your employees can be spread across the globe.

Have you ever had to move systems, network and storage from one location to another? If you have, you know about expense, outage and failure. Most cloud vendors maintain geographically disparate data center locations to ensure zero downtime for your infrastructure. Sure, there’s an additional cost for the service but how much is your current disaster recovery solution costing you?

Summary

You need IaaS because you need mobility, agility, stability, availability, elasticity and frugality in your business. You can save money. You can beat the competition to market. And, you can do it with the peace of mind that someone else is minding the hardware foundation under your business.

Where to Go from Here

If you’re considering moving to an IaaS solution or you’re part of a startup, contact a cloud vendor and discuss your needs. Remember that not all cloud vendors can or will give you good advice. Look for experience, longevity, availability, customer service and customer satisfaction in your quest to migrate to the cloud. Remember that your partnership with a cloud vendor is an important one. It’s more than a simple landlord-tenant relationship; it’s a cohabitation. You’re domestic partners and you have to select wisely. So, you need to find a partner who can help you make a smooth transition to your desired level of cloud adoption, since you’re going to be there a very long time.

This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet.