FInal Project - USMx CC605x Cloud Computing for Enterprises - Hugo Aquino
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The document presents a final project analyzing the potential for a company to migrate its IT infrastructure from an on-premises data center to cloud computing on AWS. It finds that moving to AWS reserved instances could save over $3.5 million versus on-premises costs over 3 years, with a payback period of 14 months. It describes the company's need to scale efficiently and lower costs to support growth. A SWOT analysis and technical feasibility checklists are recommended before fully committing to a cloud migration.
FInal Project - USMx CC605x Cloud Computing for Enterprises - Hugo Aquino
- 1. Hugo Aquino – Cloud Computing for Enterprises Final Project Presentation Course: USMx: CC605x Cloud Computing for Enterprises
- 2. Final Project Agenda • Executive Summary • Description of Cloud Computing • Basic Capabilities of the Cloud • Advantages and Disadvantages of Cloud Computing • Our scenario • Analysis of Economic Implications • IT Business Need • SWOT Analysis • Conclusion Cloud Computing for Enterprises
- 3. Final Project Executive Summary • Our organization has been experiencing high growth based on the adequate commercial and marketing strategy, so our NPS (Net Promoter Score) has increased, which is a good sympton about an adequate service delivered to our customers. • The technology must be an enabler for the business, and if the organization needs to continue growing, we have detected a high risk (financial, operational and reputational) on our internal data centers, that are running at full capacity. • We have two possibilities, one is to increase the capacity of an internal data center that implies CAPEX investment to expand infrastructure that will imply a prolonged time-to-market. The other possibility is to use a technology known as “Cloud Computing” that is based on a pay-as-you-go billing model (variable OPEX) with interesting functionalities such as scalability, flexibility and security that combined can generate value to our customers. • Definitively that our organization can continue improving its profitability by reducing IT infrastructure costs if we decide to migrate workloads to cloud computing. Cloud Computing for Enterprises
- 4. Final Project Description of Cloud Computing • Cloud Computing is a model to have access to resources (servers, databases, networking, applications, services) through an Internet/MPLS connectivity, that is billed based on the resources being used (pay-as-you-go). Cloud Computing for Enterprises
- 5. Final Project Basic Capabilities of the Cloud Cloud Computing for Enterprises
- 6. Final Project Basic Capabilities of the Cloud Cloud Computing for Enterprises Public •A cloud provider (AWS, Azure, GCP) has services available for consumption by the general public. Private •An internal department (typically called IT) has services available for consumption by other organizations within a larger organization. •OpenStack, Apache Cloud Stack are examples of. Hybrid •An organization uses both public and private cloud solutions and implements management frameworks to enable workload interoperability.
- 7. Final Project Basic Capabilities of the Cloud Cloud Computing for Enterprises Cloud Service Delivery Models
- 8. Final Project Advantages and Disadvantages of Cloud Computing Cloud Computing for Enterprises Advantages • Scalable • Flexible • Elasticity • Cost saving • Reduce time-to-market • Security • Unlimited storage capacity Disadvantages • Lose control • Service disruptions • Privacy • Depends on internet connectivity • Hybrid security model • Stored data might no be secure
- 9. Final Project Current IT infrastructure scenario Category Item Amount Specifications Computing Non-DB Server 200 Cores: 8 RAM: 64 GB OS: Linux Database DB Server 10 Cores: 16 RAM: 128 GB DB: Oracle SE 10 Cores: 16 RAM: 128 GB DB: MySQL Storage Object 200 TB 25% infrequently accessed NAS 500 TB NA SAN 1000 TB NA Cloud Computing for Enterprises
- 10. Final Project IT current scenario – AWS: TCO calculator For DB Oracle, we´ll asume the use of our perpetual on-premises licenses For Hypervisor, we´ll asume the use of VMware Cloud Computing for Enterprises
- 11. Final Project Analysis of Economic Implications Category On-Premises Virtual environment Cloud Computing with AWS Item Value Percentage Item Value Percentage Time period Years 3 NA Years 3 NA Compute Hardware $ 2,248,889 61.68% EC2 instace costs (reserved) $ 2,149,716 48.14%Software $ 1,903,530 Database software license cost $ 144,420 Operating costs $ 997,344 CloudWatch $ 360 sub-total $ 5,149,763 sub-total $ 2,294,496 Storage Raw capacity (including IOPS) $ 1,904,640 32.84% EBS costs $ 907,663 44.92% Backup $ 524,400 AWS Business Support (EBS) $ 60,713 Overhead (excluding storage admin) $ 260,123 EFS costs $ 1,057,536 Storage admin $ 52,473 AWS Business Support (EFS) $ 75,808 NA NA S3 costs $ 31,467 NA NA AWS Business Support (S3) $ 2,105 NA NA Standard - Infrequent access costs $ 5,724 NA NA AWS Business Support (Standard - Infrequent Access) $ 383 sub-total $ 2,741,636 sub-total $ 2,141,399 Network Hardware and Software $ 326,089 4.62% Data transfer costs $ 36,559 0.77%Bandwidth costs $ 60,000 sub-total $ 386,089 sub-total $ 36,559 IT Labor IT Admin costs (VMs/servers) $ 35,640 0.85% EC2 Admin costs $ 19,440 6.17%IT DBA labor costs $ 35,640 RDS Admin costs $ 16,200 NA NA AWS Support (Business) $ 258,565 sub-total $ 71,280 sub-total $ 294,205 Total Total $ 8,348,768 100.00% Total $ 4,766,659 100.00%
- 12. Final Project Analysis of Economic Implications Cloud Computing for Enterprises • Cloud computing: • Analysis #1 - Reserved instances compute model is 3.5M USD cheaper than On-Premises with a 14 months payback period. • Analysis # 2 – On- demand instances compute model is 330K USD more expensive than On- premise. • The AWS EC2 reserved instances model is the only cloud model that generates savings. Financial Analysis Scenario Category Item Year 1 Year 2 Year 3 Cloud Computing alternative One-time expenses Compute (reserved instances) $ 2,149,716 $ - $ - Recurring expenses Database software license $ 48,140 $ 48,140 $ 48,140 Cloud Watch $ 120 $ 120 $ 120 Storage $ 713,800 $ 713,800 $ 713,800 Data Transfers $ 12,186 $ 12,186 $ 12,186 IT Labor $ 98,068 $ 98,068 $ 98,068 Total costs By year $ 3,022,030 $ 872,314 $ 872,314 Total $ 4,766,659 TCO/year $ 1,588,886 Benefits On-premise Compute $ 1,716,588 $ 1,716,588 $ 1,716,588 Storage $ 913,879 $ 913,879 $ 913,879 Network $ 128,696 $ 128,696 $ 128,696 IT Labor $ 23,760 $ 23,760 $ 23,760 sub-total $ 2,782,923 $ 2,782,923 $ 2,782,923 Total $ 8,348,768 Cashflow Net cashflow -$ 239,108 $ 1,910,608 $ 1,910,608 Cumulate Net cashflow -$ 239,108 $ 1,671,501 $ 3,582,109 Payback Full years where cumulate cash flow is negative 1 Absolute value of the last cumulate cash flow negative $ 239,108 Next cash flow value $ 1,671,501 Period (years) 1.14 IRR 788.95%
- 13. Final Project IT Business Need Cloud Computing for Enterprises • Our organization has to continue growing in the medium and long term, generating profitability in a highly competitive environment by keeping costs as low as possible. • The technology plays an important role because is the business enabler, and if we find a way to support the growth without taking care of the infrastructure that is needed to be acquired (CAPEX) with a flexible service provision schema (auto-scaling based on thresholds exceeded), join with an availability distributed in several regions, and most important by paying only for what we are using (variable OPEX), definitely that Cloud Computing is the way to go. • On Cloud Computing, there are several players, such as: Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform (GCP), etc., and according to Gartner,´s Magic Quadrant (July 2019), AWS has been the leader by 9 consecutive years being the option that we are recommending because its position as market leader. • Therefore, if we migrate our current infrastructure that runs On-Premises to the AWS Cloud Computing by using a model of reserved instances, this action will bring us benefits in a 3 years TCO analysis. The On-Premises TCO is 8.35M USD, while the Cloud computing TCO is 4.77M USD with a payback period of 14 months.
- 14. Final Project SWOT Analysis Strengths Weaknesses • Data sharing • Scalable storage space • Enhance availability of data and services • Development of OS-independent applications • Improved performance of services • Reliability of data and services • Pay-per usage • Flexible and resilient in disaster recovery • SLA guarantees the services from the cloud service providers (CSP) to client • Interoperability (communications between the cloud) • Open standards • No precise method to select/find CSP • Paradigm swing at present occupational and IT departments • No easy Migration to another CSP • High-speed Internet/MPLS connection essential to connect to cloud • Modification on maintenance model Opportunities Threats • Overcoming latency limitations • Improving bandwidth utilization • Dynamic network monitoring • Technical issues resolution • Adaptive to future needs • Cloud provides an excellent back-end for mobile applications • Expansion and growth • Security issues (privacy, authentication, malware, confidenciality, third party, data integrity, los of data) • Management of data • Data ownership • Migration from one CSP to another is difficult • Vendor shutdown • Natural calamities Cloud Computing for Enterprises
- 15. Final Project Conclusion • Cloud computing is an interesting alternative that enables: reduced time-to-market, scalability, and a way to drive agility and innovation. • Cloud computing can generate savings after an adequate components/services analysis done. • A new mindset is needed inside IT to accelerate the Cloud computing adoption, because on Cloud, the roles, and tasks are integrated in comparison to On-Premise. • Not all the applications can be migrated to Cloud computing, a checklist has to be applied to evaluate the technical feasibility with the functional and non-functional requirements in mind. Cloud Computing for Enterprises
- 16. Final Project Thanks Cloud Computing for Enterprises