Monday, 1 April 2013

Cloud computing – away with the fairies

We all know that the present arrangements for government computing in the UK can't go on. We're in the pan fat.

Instead, we should adopt cloud computing. That would solve the problem, say many commentators. They're well-meaning, no doubt. But wouldn't cloud computing simply move us into the fire?

It certainly looks like it. Cloud computing is meant to be a sort of utility – you get rid of the overheads and only pay for what you use. It sounds eminently sensible until you remember what's happening to your utility bills right now – they're going through the roof.

But that wouldn't happen with cloud computing, say the well-meaners. The G-Cloud people in Whitehall, for example, claim to believe that the suppliers of cloud services want nothing more than to cut their prices and increase the quality of service.

Amazon, for example. They're the biggest suppliers of cloud in the world. They wouldn't put their prices up. Would they?

They just did. Amazon's fees hike for third-party traders provokes fury:
'Marketplace' traders in UK and major European markets to be hit by fee hikes of up to 70% after Easter, following similar rises in US ...

Amazon is facing a revolt from small traders as the internet retailer – which describes itself as "Earth's most customer-centric" company – plans to impose a wave of fee rises on third parties who use its network to sell consumer electronics, automotive parts and other goods in the UK and across Europe ...

The fee increases – which in some cases amount to as much as 70% – have left traders furious, although none are prepared to go on the record because they are concerned about how Amazon will respond.

9 comments:

Anonymous said...

Or you could look at the actual Cloud part of Amazon's business, rather than its Marketplace, which is completely different.

References:
http://www.networkworld.com/news/2012/110112-amazon-cloud-prices-263895.html
http://aws.amazon.com/about-aws/whats-new/2013/01/31/amazon-ec2-price-reduc-m3-global-data-transfer-drop/

Of course, it's not just Amazon that are dropping prices:

http://www.theregister.co.uk/2012/12/07/azure_price_drop/
http://www.rackspace.com/blog/lower-open-cloud-pricing/
http://www.memset.com/press/memset-undercuts-amazon-cloud-storage-pricing/

In fact, in the 6+ years I've been watching AWS, I've yet to see them increase a price. Once. Ever.

Of course, that's because despite what the press would have you believe, AWS DON'T have a monopoly on cloud services (as the above list demonstrates), but are instead operating in a very competitive (and healthy) marketplace.

Compare this with the physical utilities, that have a much higher cost-of-entry, not to mention Govt. pricing constraints, subsidies, CO2 tariffs, etc, and you begin to see why comparisons between AWS and your gas bill really don't make sense.

David Moss said...

Forgive me, Anonymous, but for the moment I shall concentrate on your closing paragraph:

Compare this with the physical utilities, that have a much higher cost-of-entry, not to mention Govt. pricing constraints, subsidies, CO2 tariffs, etc, and you begin to see why comparisons between AWS and your gas bill really don't make sense.

I agree with you. Or you agree with me.

It makes no sense to liken cloud computing to the utilities sector.

It makes no sense but that is precisely what the G-Cloud team – Whitehall's government cloud enthusiasts – do. The following quotations are all taken from the G-Cloud website:

• 12 March 2012 The Times they are a changing: Cloud Computing offers utility services that are cheaper, better and faster to provision ...

• 23 March 2012 A No Brainer: Cloud computing is: ICT services, or ICT enabled business services supplied on a utility basis ...

• 4 April 2012 Baby Steps: You don’t need to make a big commitment up-front because cloud is based on a utility service model ...

• 1 June 2012 G-Cloud ‘Simple’ Procurement Instructions: ... the aim of G-Cloud is to make it easier for the public sector to access and use utility-based ICT services and easier for suppliers to work with us ...

• 26 July 2012 Guidance on Terms and Conditions: Public Cloud means Utility Computing that is available to individuals, public and private sector organisations. Public Cloud is often non-geographically specific and can be accessed wherever there is an Internet connection ... Private Cloud means a Utility Computing infrastructure exclusively for the use of one organisation or community ...
See also • 10 May 2012 G-Cloud Information Assurance Requirements and Guidance
See also • G-CLOUD SERVICES II FRAMEWORK AGREEMENT

• 18 September 2012 .gov.uk hosting bought through G-Cloud: The purchase also shows that government is ready to embrace low cost utility cloud services ...

Take the matter up with Denise McDonagh. Not me.

Anonymous said...

In that case maybe we only have a case of mistaken terminology; within IT, the phrase "utility" is typically used to describe a service that has no up-front use, but is instead pay-per-use.

In this respect, it is like "traditional" utilities (water, gas, electricity) - I don't have to pay an up-front fee to buy an electricity station, I just pay for what I consume. In IT, this would mean that I don't pay for £100,000's of physical kit up-front, but instead "rent" it on a pay-per-use model.

Most of the G-Cloud team's statements you have posted in your comment are accurate; utility services are quicker and cheaper to provision (in the same way it is quicker, easier and cheaper to rent a van for a few days than to buy one); the one I would disagree with is the G-Cloud definitions of public v private v community clouds, which I think goes against the NIST standard, but that is not a big issue overall.

For more about utility computing, see: http://en.wikipedia.org/wiki/Utility_computing for a reasonably good definition of utility computing.

Whether in the long-term utility (cloud) computing actually saves money or not depends on specific use-cases, loads on servers, the need to adapt to peaks in demand, etc.

As a broad guideline, where you can accurately estimate demand/IT load over the lifetime of the physical kit (typically 3-4 years), it is more cost effective to buy.

Where demand/IT load is less predictable, or needs to be able to handle bursts in traffic (such as tax deadlines), the ability to rent additional capacity for just that period is much more cost effective than buying kit that sits around doing nothing for 11 months of the year.

For more background, Simon Wardley has done a lot of research on utility computing, see here for one post: http://blog.gardeviance.org/2008/03/saas-utility-and-clouds.html, particularly at the second at the end.

Anonymous said...

First sentence should read no up-front *cost* :)

David Moss said...

It's a bad mistake, Anonymous, to keep banging on about there being no up-front costs of cloud computing.

The GCSE students might fall for it but the grown-ups won't.

Of course there are up-front costs. There always are.

A prospective customer has to investigate the cloud supplier. Is the supplier competent? And reliable? What do their existing customers make of the service? The service may need to be audited. Does the supplier take backups? Where are they stored? Are they any good in an emergency? What do they know about security? Who's going to get priority when there's an emergency? Are their staff trustworthy? Which jurisdictions do they operate in? Contracts have to be negotiated. Then someone has to work out all the scripts to transfer code and data into the cloud. Or from one cloud supplier to another.

You can't seriously pretend that there are no up-front costs. It undermines the case for cloud. It makes people think you're not serious and that you believe in magic and that you're just winging it.

David Moss said...

... in the 6+ years I've been watching AWS, I've yet to see them increase a price. Once. Ever.

Induction, Anonymous! Induction! You may only have seen white swans. That doesn't mean there aren't black swans.

You have seen Amazon put prices up for their Marketplace customers. Some of those swans are looking decidedly off-white.

But you think that Marketplace is quite separate from cloud:

... you could look at the actual Cloud part of Amazon's business, rather than its Marketplace, which is completely different.

A minority report of yours.

They're not "completely different":

• Amazon make no distinction between the two in their accounts.

• If a Marketplace customer isn't doing cloud computing, who is?

• If a Marketplace customer isn't doing cloud computing, what are they doing?

• Take a look at this Wired article. Then try to explain the difference.

Anonymous said...

You might like to check out:
http://www.theregister.co.uk/2013/05/02/china_us_hacking_qinetiq_apt/

http://arstechnica.com/security/2013/05/defense-contractor-pwned-for-years-by-chinese-hackers/

;)

David Moss said...

Anonymous @ 3 May 2013 10:31, thank you for that comment, I look forward to responding later.

David Moss said...

Anonymous @ Fri 03-05-2013 10:51, thank you for your comment, too. It reached me by email but is too long at 3,384 characters for this blogging software in the cloud (Google's Blogger) to display. I have posted it here.

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