Cloud value chain - service based view

The cloud marketplace has resulted in the creation of multiple services and modes of delivery. To simplify the roles played at various levels in delivering cloud computing benefits, we can classify the them as cloud service creators, cloud service aggregators, and cloud service consumers.

Cloud service creators can be players like Amazon, Microsoft, Rackspace, and EMC, who are involved in creating cloud services and infrastructure. Heavy investments are required to create cloud services as this involves procurement of infrastructure like data center facilities, racks for housing servers, power and cooling systems, storage, network components and devices, etc.

On the other hand, service aggregators provide solutions for enterprises and allow customers to pick cloud solutions according to their specific needs and budget. Service aggregators enable enterprises to use cloud services effectively and easily. They manage and aggregate services from multiple cloud creators and provide the required services to customers.

The service consumer can buy the cloud services from service aggregators or the cloud providers, depending on the need. An aggregator will provide multiple options and higher numbers of services and will typically bundle services like support and migration, while a cloud provider will provide standard services with limited support for migration.

Here’s a closer look at each option.

Cloud Service Creator

The cloud service creator defines the services that they want to offer in the cloud computing space, which could be IaaS, PaaS, or SaaS environments. The service creators define their offerings, which cover the following:

• Service definition
• Service utility and warranty
• Service geography
• Service SLAs
• Service monitoring and management, which includes monitoring, event management, availability, capacity management, problem management, and change management capabilities.

The cloud service provider also provides APIs to connect to the request portal and catalogue so that the cloud aggregators or cloud consumers can access these from outside systems. In addition, the cloud service provider provides metering, rating, and billing so that the consumers know the charges and their breakdown, and notifications on service availability and SLAs. The complexity and scale of capacity planning for a cloud provider increases many fold since they are managing a complex and dynamic environment that typically spans multiple locations offering delivery and redundancy around the globe.

The cloud provider’s margins are directly related to the capacity utilization of the cloud services offered. They also have to make sure that enough capacity is available at locations where the services are consumed and demanded. The dynamic nature of demand and the multi-tenancy aspects make this a complex process.

The cloud service creator provides a catalogue and one or more request portals to the aggregator or deliverer, who provides significant efficiencies and value additions to services offered in the value chain. The catalogue provides a list of the templates, the associated costs, SLAs, and delivery locations.

Cloud Service Aggregator

The cloud service aggregator aggregates services from various cloud providers and provides a uniform way to order services and manage multiple underlying cloud providers. The cloud aggregator provisions tools and processes that work seamlessly across cloud providers and thus provide ease of use and the best-of-breed benefits to cloud consumers.

The cloud service aggregator acts as a single interface in multiple cloud providers and helps the cloud consumer leverage the strengths of various cloud providers. The cloud consumer can therefore use the aggregator to enable higher availability across cloud providers and use the IaaS, PaaS, and SaaS layers. This can be achieved by having an application deployed on multiple cloud platforms so that unavailability or an outage in one cloud provider’s infrastructure doesn’t impact the application—it keeps running in the other cloud provider’s environment. An example of this kind of usage is to have an application hosted and running in Microsoft Azure as well as AWS.

The cloud service aggregator also aggregates the billing and provides a single bill to the cloud consumer. The cloud service aggregator provides add-on services to the consumer. The aggregator also may provide services like migration and support of multiple cloud environments. In essence, the aggregator becomes a single interface for the customer, providing unified billing and a single point of contact for availing multiple services. Jamcracker is one of such companies that provides cloud aggregation services. The cloud service aggregator can provide unified SLAs to the cloud consumer, offering simplified management of SLAs.

The need for sourcing multiple services arises because different cloud providers provide different services, and an enterprise may need all of these services for their business. As an example, an enterprise may want to use Google for their e-mail services, AWS for IaaS, and Azure to host applications developed on the .NET platform; they may also use Salesforce.com as a SaaS platform for their sales and marketing requirements. An aggregator can combine all these services and provide them to the customer as a managed offering.

Cloud Service Consumer

Service consumers seek cloud solutions from either a service creator or service aggregator in keeping with business requirements. Besides this, they seek cloud services from creators and manage various SLAs in a multi-vendor environment as a consumer. Service consumers seek cloud solutions that are a best fit in terms of maximum resource utilization and ease of management. Service consumers also seek services enabling them to migrate infrastructure to a cloud computing model that may include cloud consulting, cloud readiness assessment (for infrastructure and applications), workload assessments, cloud migration, and so on.

The customer primarily focuses on business demand projections provided by the business teams, based on the demand data and the current capacity utilization of IT services. In this environment, the customer needs to model their requirements in terms of network bandwidth, computer power, and storage from an infrastructure and a service perspective. However, since the cloud model provides capacity on demand, the consumer is saved from guessing the capacity needs of the application to a large extent because the capacity can be ordered through the cloud as required. Sudden spikes in demand for capacity can now be accommodated since machines with more processor power or a greater number of machines can be provisioned in the cloud environment.

Without cloud computing, for applications hosted in a data center, sudden spikes in usage were often impossible to accommodate. As a result, capacity planning focused on taking the highest amount of capacity that remained underutilized for most periods. An example of such a scenario is a shopping cart application where capacity needs increase because of spikes in demand during holiday seasons. In a cloud computing scenario, more capacity can be provisioned during the holiday season for a few days rather than buying upfront capacity and provisioning it in the data center. Other examples are consumer-facing applications, which can get viral because of their unique features, and usage of social media tools, which can promote an application to millions of users in a single day. In such scenarios, a startup offering an application can easily leverage the cloud computing environment and serve the customers hitting their web site. In another example, an Oscar-winning movie can create huge interest in the community, and the web site of that movie may see substantial increased user activity in the days following the awards ceremony.

As an example, a small startup company may create an application and use only a single instance to host and test-market it. If the application becomes successful and many users start using it, the startup company can then buy additional capacity when the user base grows, rather than make an upfront investment in hardware capacity. For this reason, the cloud offers significant advantages to startup businesses with unknown growth cycles. This has revolutionized and democratized software development; a small group of individuals with the right idea and creativity can start creating an application using cloud computing to minimizing upfront investments.