Cloud storage strategies that make sense

By Cat Yong

While we’ve been talking about cloud computing for some years already, businesses in Malaysia at least, tend to balk before taking the plunge. During Seagate’s recent breakfast meeting in Kuala Lumpur moderated by Questex Asia’s Bureau Chief in Southeast Asia , IT heads around the table seemed to agree that virtualisation seems more attractive instead.

For example, MISC’s Hood Abu Bakar often gets asked if his organisation has cloud computing, to which he responds that it doesn’t, acknowledging that what he actually has is virtualisation.

Heitech Managed Services’ Wan Zailani admitted that potential customers could be enticed with virtualisation as a first step in the cloud implementation journey, which typically takes 3 years to complete.

This is somewhat echoed by fellow outsourcing cum telecommunications service provider, Maxis Berhad’s Fitri Abdullah, although his hook for potentials, are that they could try it with a service provider first before doing it themselves.

Pick your cloud

When it comes to storage, Iskandar Investment’s Andy Chan pointed out that outsourcers can leverage economies of scale to offer better cost efficiencies, while Bank Simpanan Nasional’s Alain Boey opined that public cloud is not an option for regulated in industries like financial services.

Other considerations when deciding whether to outsource or build their own infrastructure include local bandwidth  issues, cost efficiencies and the assurance that their data won’t be compromised in the event that they switch providers.

Below are excerpts of the discussion:

The cloud journey 
Victor Ng: What are your views about the cloud computing journey and the obstacles, especially in the area of cost reduction?

Fitri Abdullah: We started providing cloud services over a year ago, mainly targeting all the SMEs, with IaaS and SaaS. The internal team had pressing needs for internet-facing apps, began to use them, and saw the benefits of how within 10 minutes, 8 CPUs became 16 CPUs.

Now, we are building out the cloud infrastructure for Maxis’ internal usage. In terms of cost reduction,
I’m not so sure, but we see benefits of speed-to-market and agility.

Hood Abu Bakar: Private cloud is nothing new. Larger companies have the option to [procure more] hardware and ensure head room for future growth, so there is no real benefit for the larger companies right now to [embark on cloud computing with service providers]. While the time to market is a whole lot faster, the development of apps takes longer than three months; that’s the time it takes to get a piece of hardware into the data center.

So, getting compute capability is not as big an issue as developing applications for it. There are also concerns around security, but a lot of people are fairly confident of service providers, especially if they are certified. My worry is [that when I terminate the service agreement], what will happen to my data?

We haven’t seen any case scenarios and I’m not sure if there is a legal precedent on how to do this.

Andy Chan: The thing with mobility is that it moves so fast you really don’t have the luxury of properly planning for it. Cloud automatically becomes one of the solutions that we need to look at.

But being a Malaysian company, we need to ensure that our data is stored in data centers here. Storing information in the cloud is no longer a luxury. Come end of 2013, people are probably going to be on Windows 8 tablets. Then, we won’t really have a choice. But a secure encrypted way of cloning documents is needed.

Connectivity and bandwidth
Alain Boey: Cost would be incurred in educating the IT team itself. Bandwidth will always be a challenge. Cheaper bandwidth could help a lot.

Wan Zailani Wan Ismail: Cloud computing is a major concern. The government is aiming for Malaysia to be a data centre hub. But how do we offer good interactive services to the local market and the region when our bandwidth costs are not low? Another cost is electricity – so how can we ensure there are cost savings for the end user? We see organisations needing a test and development environment but there is low confidence that the whole infrastructure is ready for a big production system or for a banking system.

Hood: We tried to do test and development on the cloud, but the cost is not attractive. Much of what goes on the cloud is consumer or utility-based [applications] like email. The problem is that you have to integrate systems. You want to build things on top of youremail – like workflow and ERP — which are all interconnected.

Be it on the cloud or in your own data center with a third-party service provider, or however, the connectivity must be there. This makes the whole system more complex and more difficult to manage; it splits applications apart.

Fitri: Enterprises would probably go to the cloud because of Internet-facing applications. That would be the motivation to work with service providers because [as a telco], we will bundle cloud [applications] together with bandwidth. A service provider can help organisations to manage traffic during high-peak periods and offer security.

Secondly, banks have their core systems. A service provider can turn on 30 CPUs for them, when there is disaster, and banks don’t need to worry about OS, patch levels or buy the whole computing infrastructure for a disaster recovery centre.

Andy: When committing something to the cloud, encryption exponentially expands your data, and if your bandwidth cannot support it, the latency will hamper mobility and agility.

Hood: In our case, we place whatever apps with a lot of data that goes back and forth as close to the user as possible. We have engineering drawings, which are relatively big in size, so it would take up a lot of bandwidth [to send them across] the cloud. And we do not have connectivity in some locations, i.e. Pasir Gudang or Melaka.

Mobility
Victor: The thing with mobility is, with all the users and devices out there, you don’t want applications to be just accessible from your server, on-premise, behind your firewall. That defeats the purpose of mobility. Does this affect or reduce the cost of going to the cloud?

Andy: Considering the cost of retraining— the engineers, the staff — I definitely advocate outsourcing as much as possible. Cloud services can potentially provide cost savings. With healthy competition, cost will come down, bandwidth included. I don’t see many major cost concerns actually for the next few years.

Alain: When it comes to mobility for our sales agents, issues we face, for example, are what operating systems to use, and what applications to support. At end of the day, it all boils down to cost, but that can be overcome.

Cloud storage
Wan: The challenge we have is customers requiring tremendous amounts of additional storage. Then comes the issue of throughput in data processing. With the processor here and the data somewhere on the internet, that slows performance down a lot.

Victor: Do you see storage being one of the considerations for whether to go to the cloud and what to bring in-house? Would it change the way storage architecture is designed or how storage is acquired? Does it make a major difference to the TCO?

Wan: Cloud storage in Malaysia is not widely adopted] yet. Storage technologies like thin provisioning are exploited more on-site or on premise, for example. With cloud, storage seems secondary to compute and memory, which seem to be bigger requirements. On private clouds, you would optimise storage technologies, but on public clouds, storage is just a [standard] commodity.

Andy: As far as possible, we look at limiting purchase of additional storage. I want to see what we can do more efficiently, and what can be put on the cloud, and this is where security and encryption come in.

If I were to buy a SAN, I’d need to spread [capital expenditure] over 3 years. If I migrate data to and consume storage from the cloud, I can tap on the most cost-efficient solutions,which gives me a better timeline to maximising my assets. Cloud providers can commit to doing storage on a larger scale. It is hoped that market competition will force them to improve cost efficiency. I’m looking to tap into that.

Wan: We do have different tiers of storage capability. For example, apps that do not require very high performance, such as archiving, would be put into cheaper storage. High-end storage will be for real-time data processing.

Andy: With replication, logs, back up and recovery, how can I be confident that storage on the cloud is erased when I move to another provider?

Hood: I need to have confidence that I can access my data on the cloud, and when I leave the service, it will be erased. If I am hosting and managing storage, then I am looking at how to manage it as easily and as efficiently as possible.

If I pay someone to host it, I’d want the service provider to worry about that in stead. So, we’d assess whether it’s more cost effective for us to do it or for someone else to do it.

Andy: It’s safe to say that no matter where you have your storage, your service level agreement, expectations and demands of the back-end service remain the same. It boils down to cost considerations.

The whole thing has to be looked at also from a service perspective, so when we sign a contract with an outsourcing partner, we look at the whole service package. On the operations side, we demand the same kind of high-level service [as in an on-premise environment], such as for backup or recovery, or to see the logs.

Other factors for a service provider would be uptime, availability, the various levels of storage efficiency and maintaining the efficiency rate.

Hood: [The outsourcing vendor tends to] lose money the first year, because they have to invest. But margins will kick in [when utilisation of the service increases]. Organisations are always striving to increase value. 

So, in my contracts, I make sure there is a clause stating that the service provider either decreases cost to me every year by a certain amount, or improves their service level to a certain level, for each subsequent year.

So, that’s an incentive for them to improve.

Business analytics
Fitri: Many companies have a lot of data to transform into information and insights. As a result, there will be demand for bigger storage and analytics. Clearly, every organisation has customer information files, but the organisation probably does not have a 360-degree view of the customer to serve them the best they can.

From 2013 to 2020, I think a lot more focus will be on deriving business insights and making sense of the overwhelming information.

Hood: We have a system to read all our [enquiry] emails and websites, and summarise them into structured format for the marketing people to predict trends and where the market demand will be.


(This article first appeared in Networks Asia)