The People's Republic of Cloud Computing

I just got back from an action packed week of meetings in Shanghai, China. Shanghai is one of the more exciting cities I've visited recently as they prepare for the World Expo in May as well as the upcoming Chinese New Year festivities. As a city Shanghai is a bustling modern metropolis. A city that in a little over thirty years has gone from a small village to mega city of more then 30 million people. In talking with the people I met in Shanghai I quickly came to realize that like myself, most people in Shanghai were not originally from there, most had recently moved there from other areas of China for "economic opportunities" the city now offers. Looking around the city you'll notice a level of wealth on par or better than most western cities. In a nutshell the reason I found myself in Shanghai was for the very reason the Chinese are now pouring into the the city, the opportunity to capitalize on the new Chinese dream.

As many of you know I've been a big proponent of Cloud Computing in the PRC for quite some time. Not withstanding that China is among the fast growing and largest economies on the globe, China has a significant data center hosting ecosystem made up of a small group of very large state sponsored telecom organizations which makes selling [hosted] Cloud services in this market a challenge to say the least. Fortunately for me their overwhelming need to equip a new and rapidly growing underlying network infrastructure is a huge opportunity, something that myself and Enomaly seem uniquely qualified to offer.

Unlike other markets around the globe the Chinese hosting business lacks any sort of small or middle tier of hosting providers, yet the country has upwards of 40 million small businesses. In my discussions with several of the largest Chinese telecom providers the opportunity is simple, to help a equip these emerging small businesses to become part of the larger global information / internet environment. Yet another driver for the use of cloud based infrastructure in China is the the rapid development found in the data center real estate market. Like the booming real-estate market itself, data center space and capacity is growing at an exponential rate. All this new space means new capacity, capacity that needs to be managed in an adaptive, energy efficient and continually evolving way. Something that cloud computing is ideal for. Also, with the development of a country wide wireless Internet infrastructure, it seems that cloud computing will play a major role in how people access applications and information in China.

How do you say Cloud Computing in Chinese you ask? 雲計算 yún jì suàn -- The reason I mention this is because to do business in China today, you must first understand the way the Chinese do business. Culture is an extremely important part of all aspects of the business environment. As for Enomaly in China. We now count several of the largest Chinese Banks, Power/Energy utilities, Regional Telecoms and even a local police force as ECP customers. What is interesting is we seem to have found ourselves a sought after niche in the Chinese market. A particular niche that has been overlooked by most in the technology world -- that of cloud enablement. Some of the reasons are simple others are more complex but it mostly comes down to market access. Things like culture, language and relationships play a hugh role in how business is done here.

To be honest, we were extremely lucky in that we found a major partner in Intel who provided us with on the ground support and introductions to some of the largest players in China. Without the know how and help of the Intel China team I doubt we would have had the opportunities that we now enjoy as a small company in this very large market. So my suggestion to any upstart trying to gain a foot hold in the Chinese market is to first find an established player with a local team. And second, do not build you're own data centers, local IT policies really don't make running your own data center a reasonable option. Of those who have tried they typically do so under the rationale of "Disaster Recovery" which limits your ability to act as a production hosting facility.

In closing, when it comes to doing business in the PRC, the sky is the limit, keep watching you'll see some exciting Enomaly related news in the very near future.

Enomaly & Intel Participate in New Cloud Builder Program

It's been a little quiet on the blog front lately because of my crazy travel schedule. I'm currently in Shanghai on business and have had limited access to the my favorite social media tools while I've been in the Peoples Republic.  Today I have some exciting news, something that's been a long time in the making. As many of you know over the last few years we've been working very closely with the team at Intel on various cloud and virtualization related efforts. In terms of a technology partner, they have been ideal both in going the extra mile technically allowing us access to their world class technical team around the globe (in places including China, India, Korea, Japan, Taiwan U.S) as well as market access to both their customers and partners. Intel was among the first to full understand the opportunity in enabling a truly secure virtualized cloud computing environments for service providers and Telco's. I'm happy to announce that Enomaly has joined  the Intel® Cloud Builder Program to enable ease and scale of cloud deployments.

The purpose of the Intel® Cloud Builder Program enables easier deployment of cloud solutions. The program provides a starting point to setup, deploy and manage a cloud infrastructure.  The primary goal is to simplify the effort to deploy cloud-based solutions for service providers, hosters and enterprise customers looking to use cloud architectures. The program provides tools and best practices for cloud service providers to create a cloud environment based on a defined software and hardware stack. 

Our participation in the Intel Cloud Builder Program aligns closely with our other efforts to enable Service Providers to deliver enterprise-class cloud computing services to their customers. Our work with the Intel Cloud Builder Program will help to accelerate our efforts to deliver a massively-scalable, highly-available, high-security cloud platform to our customers.

A proven cloud computing technology platform, Enomaly's Service Provider Edition and High Assurance Edition provide a strong platform with which service providers can deliver revenue generating cloud services to their customers.  Simple and easy to use by end-users, Enomaly provides a feature rich, customizable platform that will enable its Service Provider customers to gain competitive advantage in this fast moving market. 

According to Billy Cox, director Cloud Computing Strategy, Intel Corporation; "Enomaly is one of the important industry influencers, Intel and Enomaly are working together with the goal to reduce the implementation time for our customers. Enomaly's participation in Intel® Cloud Builder Program can help enterprises and service providers move to cloud computing more easily."     

I'm looking forward to continuing to work closely with Billy, Jake and the rest of the Intel team. Thanks again for believing in us. 

About Enomaly

Enomaly is a global leader in the fast-growing Cloud Computing space.  Enomaly empowers service providers (carriers, hosting companies, and others) to deliver revenue- generating infrastructure on demand (Infrastructure as a Service, or IaaS) services to their customers.  Enomaly's Elastic Computing Platform, first released in 2004, was the world's first IaaS platform, and is used today in over 1000 working installations. 

For more information, please visit www.enomaly.com 

For more information on Intel® Cloud Builder program, please visit here. 

All names referred to are trademarks or registered trademarks of their respective owners.   

Calculating Cloud Service Provider ROI

Bit of a buzz this morning around the new Cisco IaaS ROI and Configuration Guidance Tool which was launched last week. My comment on twitter was that it was overly complex. Although some interpreted my remark as a slight against Cisco (You know who you are) it was actually a broader remark about the complexities of determining a service providers rate of return (ROI) when deploying your own revenue generating cloud services.

In a nutshell that's the problem facing many data center and hosting providers looking to offer utility style IaaS products & services to their customers. To put it lightly, currently it's an overly complicated endeavor. To be competitive today means competing against Amazon Web Services. They've in a very real sense set the bar and the bar has been set extremely low. Not only does Amazon continue to produce new products and services at an amazing speed and consistency, they also continue to innovate on their cost model with latest improvements including Spot pricing and reserve instances. This means that AWS can offer their IaaS sometimes at less then a cent or two an hour while [mostly likely] continuing to turn a profit. Combined with these economic pressures are the competitive pressures to differentiate your service offering from that of your competitors. For example bundling additional software and services on top.

Cisco's ROI tool does a good job of shedding light on the complexities in defining cloud infrastructure focused business models. It outlines components such as operational costs like Labor, Power, Maintenance as well as capital costs including Data Center Build out (Construction), system integration, storage and compute. For me by far the most interesting part of the calculator is the compute related options. They've broken them down into 3 basic VM categories (Power, Average, and Light)

I also found the proposed scale (number of servers, customers etc) in which the ROI tool was built quite telling about the market Cisco is going after with minimum capital expenditures in the 12 - 15 million dollar range for a Cisco based IaaS deployment with smaller deployments actually returning negative ROI results.

The unfortunate part of the ROI tool is that you can't completely remove all the required fields. The tool forces you to include Cisco based pricing for it's calculations. Which does makes sense, it's a Cisco sales tool after all. Although it would be interesting to be able to insert your own hardware and software costs such as VMware Vs Enomaly ECP or HP servers Vs Cisco. If they add those capabilities, this might very well be the best IaaS calculator I've seen.

Another interesting aspect of this calculator is along with other related Cisco Service provider announcements they have effectively come to the same conclusion we at Enomaly (and others) reached about the current market opportunity for IaaS. Simply that in the short term, the real market, the money to be made within the cloud computing infrastructure enablement sector is with Cloud Service providers (Data Centers, Web Hosts, etc) looking to augment their existing service portfolio in an attempt to remain competitive.

Enomaly Named in List of Coolest Cloud Platforms by CRN

Enomaly got a little love today from Channelweb. The magazine named Enomaly in a list of the 20 Coolest Cloud Platform Vendors. The list includes a who's who of the Cloud Space including Amazon EC2, Appistry, AT&T, GoGrid, Google, Microsoft, RackSpace, Salesforce.com, Terremark, VMware and others.

ChannelWeb had this to say about the emerging Cloud Space, "Without the platform, there really wouldn't be much in the cloud, now would there? To some, cloud computing platforms have been affectionately called Platform-as-a-Service, or PaaS (not to be confused with that Easter Egg coloring kit of the same name). Cloud computing platforms facilitate and ease the deployment of applications into the cloud, limiting the cost and complexity by cutting the need to buy and manage hardware and software. As cloud computing continues to gather steam and more VARs and their clients are looking to design, develop, test, deploy and host apps in the cloud, a robust, flexible platform has become a must-have. With that in mind, we present the 20 coolest cloud computing platform vendors. See the complete list here.

Thank you!

CloudCamp Haiti Recap and Audio / Video Posted

We had a great turnout for CloudCamp Haiti earlier today with great presentations from Dennis Quan of IBM, Sam Ramji of Sonoasystems (Formerly of Microsoft) Simon Wardley of Canonical and Judith Hurwitz, Author of Cloud Computing for Dummies as well great questions from our call in style radio show.

I'd also like to thank all our corporate supporters including our logo sponsors, Cloud-Cast, Cloud Connect, CloudRight, CloudSoft, Curtin University of Technology, Enomaly, Enstratus, OpenQRM, OpsCode, RightScale, Soasta.

To recap, all toll we raised close to $5,000. It's unbelievable to see how the cloud community came together for this important relief effort. I would also like to thank John Willis who took my simple twitter post, "I wish I could do more for Haiti", and ran with it. As well I'd like to thank Dave Nielsen who's tireless efforts were completely amazing. Just to think we went from an idea last Thursday to a complete and well attended CloudCampHaiti in less then a week is astounding. I am honoured and humbled. Thank you from the bottom of my heart!

Just a reminder you can still donate here. or here, or here.

So without further ado here are the links to Video (MOV 400mb) and Audio (MP3) portions of CloudCamp Haiti. The clips run about 4 hours in length. (Audio/Video provided by @cfetter founder of Intillium.com)

My TV Debut on BNN

My TV Debut on Business News Network (BNN)

Headline : January 18, 2010 : Cloud Computing - Companies in the Sector

"Cloud computing" is a term that's popping up everywhere. It has its enthusiasts, but some say the recent Google hacking incident could raise questions about the security of cloud computing. So what is cloud computing and why does it matter? BNN speaks to Reuven Cohen, founder and chief technology officer, Enomaly Inc., Mike McDerment, CEO, Freshbooks.com and Sebastian Ruest, vice president research, IDC Canada.

See Video here > Part 1. Part 2.

Enomaly ECP 3.0.4 Service Provider Edition Released

Enomaly is proud to announce the latest release of ECP Service Provider Edition. This version brings the following improvements and new features:

Cloning: Any powered-off machine can now be cloned, giving end-users the ability to scale out multiple copies of a pre-configured VM. This feature is important for many scenarios, including VM snapshot backups and VDI cloud solutions.

VM Tagging: Any number of tags can be added to a VM which will automatically create VM groups beyond the usual Running, Powered Off, Paused groups. This will allow users to easily organize VMs by function, by type, or in other ways important to them.

HA improvements: We've updated the HA engine to allow for new features, such as cloning and to increase the reliability of failure detection conditions on higher latency networks.

KVM updates: We've integrated additional 3rd party patches into the installer process to increase the functionality of the KVM hypervisor environment.

Contact us to get access to a free evaluation version

Oversubscribing the Cloud

There's been a bit of a debate raging over whether or not Amazon EC2 has been oversubscribed and is suffering from performance problems because it. The discussion started when Alan Williamson wrote a blog post on Tuesday that said he was experiencing growing performance problems while running a large EC2 deployment for one of his customers. The post accused Amazon of oversubscribing their environment which in turn meant he needed to buy larger instances to maintain the same level of performance in turn increasing his client’s costs.

The debate hits at the heart of complexities involved in trying to deploy cost effective, revenue generating, public use infrastructure as a service platforms. I've been saying this for a while -- one of the hardest parts creating a public cloud service is estimating your customers demand while trying to remain competitive, which really means having prices that are on par or better then Amazon EC2.

Amazon was quick to respond saying “We do not have over-capacity issues. -- When customers report a problem they are having, we take it very seriously. Sometimes this means working with customers to tweak their configurations or it could mean making modifications in our services to assure maximum performance.”

The problem with Amazon's vague response is it does very little to address a potentially major issue. In a sense they're saying we'll help you (if you're big enough) while providing no real insight into how their cloud is built, deployed or run. They do imply there are issues, but not relating to over-capacity, it's the fault of how their customers are deploying on EC2, not how their cloud itself is deployed or run. On one hand Amazon has stated they don't have "over-capacity issues", but on the other hand they are far from saying that they don't oversubscribe their environment. Let's be realistic, how else do you expect Amazon to achieve their ridiculously low price points? The very fact they can offer EC2 at such a low cost is to me indirect proof they do oversubscribe their environment. And hell, why not oversubscribe? In fact I'll go as far as to say that it is a good thing.

Amazon isn't alone in using oversubscribing or overbooking techniques for their service. The concept is common within a variety of industries where multiple users share a common resource. These resources can range from hotel rooms, to airline seats to more technical commodities such as bandwidth, storage, shared servers or even energy. The oversubscription model is dependent on the ratio of the allocated commodity which in turn is estimated on a per user / usage basis. The key is to have a well defined model which accounts for a standard deviation (or how much variation there is from the "average" usage). This typically guarantees the quality of a service for a particular user. Underlying the oversubscription model is the fact that statistically few users will attempt to utilize their full allotment of resources simultaneously. This allows you to offer more resources then you actually have available. The concept applies well to public cloud infrastructure environments, and probably is the most important aspect of any competitive pricing model.

But there are problems with the oversubscription model. The problem occurs because there seems to be a non-linear relationship between the amount of capacity versus the amount of customer demand you have. Or to put it another way, just adding more servers as customer demand increases doesn't necessarily automatically guarantee the same level of service across your cloud deployment, something Amazon's recent dramatic growth & performance issues seems to prove.

This brings us to the concept of a quota's. Have you ever wondered why when you sign up for a "unlimited" cloud infrastructure service such as EC2, you are given an initial allotment of servers? For Ec2 it's something like 20 instances. The reason is simple, the hardest part of an oversubscription model is in capacity planning. That is the use of a quota system is an extremely important aspect in any cloud capacity / resource planning you will be doing when launching and running your own public cloud service.

As an example, for the Enomaly ECP our quota system was developed to provide a predetermined level of deviation across a real or hypothetical pool of customers. Yes, it was developed to allow our hosting / cloud service provider customers to oversubscribe their environments. But it also allows for a variety of pricing & costing schemes to be implemented. Models such as tiers of usage, quality of service tiers, and even the ability to provide additional quota increases for "good behavior", like when you receive an automatic increase to your credit limit on your credit card. Without this type of quota functionality, it is practically impossible to adequately run a revenue positive public cloud service.

So the real question we need to ask Amazon is -- are their oversubscription models keeping up with the growth and scale of the underlying platform? Prove it.

PR: Enomaly Launches Cloud Computing Partner Program

Toronto, Ontario – January 15, 2010 – Enomaly, a global leader in Cloud Computing, today announced the launch of the Enomaly Partner Program to enhance the delivery of comprehensive cloud computing solutions to service providers (carriers, hosting companies, and others). The Enomaly partner program encompasses strategic partnerships with leading hardware technology vendors, cloud computing and storage technology companies as well as a global network of systems integrators and service providers who can provide local support and services to the numerous Enomaly customers in Asia, Europe as well as North America.

“The Enomaly Partner Program is a major initiative to attract and support the remarkable number of international technology companies that are recognizing the value of cloud computing and Enomaly’s leadership role in it,” said Justin Groen, vice president of Sales at Enomaly. “As Hosting Companies, Telcos and other service providers deploy our technology in their environments in Asia, Europe, the U.S. and Canada, our partner program will enable technology partners, sales channels and support services to complement Enomaly’s offering and deliver a total solution in all geographic markets.”

A proven cloud computing technology platform, Enomaly’s Service Provider Edition and High Assurance Edition provide a strong platform with which service providers can deliver cloud services to their customers. Simple and easy to use by end-users, Enomaly provides a feature rich, customizable platform that will enable its Service Provider customers to gain competitive advantage in this fast moving market.

Enomaly is a global leader in the fast-growing Cloud Computing space . Enomaly empowers service providers (carriers, hosting companies, and others) to deliver revenue- generating infrastructure on demand (Infrastructure as a Service, or IaaS) services to their customers. Enomaly's Elastic Computing Platform, first released in 2004, was the world's first IaaS platform, and is used today in over 1000 live installations.

CloudCamp Haiti (Fundraiser) Jan 20, 2010

About CloudCamp Haiti (virtual unconference):

CloudCamp Haiti is a virtual unconference held as a public webinar. CloudCamp-in-the-Cloud builds upon the popular CloudCamp format by providing a free and open place for the introduction and advancement of cloud computing. For this event, we are raising funds to donate to the aid effort in Haiti.

Using an online meeting format attendees can exchange ideas, knowledge and information in a creative and supporting environment, advancing the current state of cloud computing and related technologies.

Please help us spread the word, twitter, facebook, IM, tell your neighbours and friends. Hashtag #CloudCampHaiti or copy and paste this post on to your blog.

Registration: http://cloudcamp-haiti-2010.eventbrite.com/

Date/Time:
- Jan 20th 11:00am - 2:00pm Eastern Standard Time (EST)

Location:
- Online (GotoMeeting)

Get involved:
If you are interesting in getting involved as a presenter contact John Willis (john.willis AT zabovo.com) If you are interested in sponsoring contact Dave Nielsen (dave AT platformd.com).

Agenda:

11:00am - 11:30am - Sign in and registration (Main Room)
11:30am - 11:45am - Introductions & Overview (Main Room)
11:45am - 12:30pm - Lightning Talks (Main Room)

Lightning Talks - TBD

12:30pm - 1:00pm Unpanel Choosen by attendee’s of CloudCamp Haiti (Main Room)
1:00pm - 2:00pm Break Out Sessions - Round 1

1. Unconference Room #1: main gotomeeting room (TBD)
2. Unconference Room #2: 2nd gotomeeting room (TBD)

2:00pm - 2:30pm CloudCamp Haiti Wrap up (Back in “Main Room”)

Organizers:
- John Willis
- Reuven Cohen
- Dave Nielsen

Interested in sponsoring?

GoogleHack Proves People are Easier to Hack then Networks

By now most of you have probably heard about the GoogleHack in China. Yesterday Google's Chief Legal Officer David Drummond wrote in a blog post that indicated the accounts of dozens of Gmail users in the U.S., Europe and China who are advocates of human rights in China were routinely accessed by third parties. Drummond said that these accounts were compromised through phishing scams or malware, not through holes in Google's computing infrastructure.

And as expected there are headlines saying that this proves that "The Cloud" isn't secure and CAN'T BE TRUSTED. I'm here to tell you it is the opposite. The GoogleHack proves the Cloud is More Secure then Traditional Desktop Software, not less.

First let's look at the actual hack. Although not a lot is known -- what is known is it's probably part of a program known as "GhostNet". The exploit uses emails which are sent to target organizations that contain contextually relevant information. This is more generally referred to as a "Social Engineering hack" which is the act of manipulating people into performing actions or divulging confidential information, rather than by breaking in or using technical hacking techniques. Basically a person opens an email that contains malicious attachments, that when opened, delivers a Trojan horse on to the system's OS. This Trojan connects back to a control server, usually located in China, to receive commands. The infected computer will then execute the command specified by the control server. Occasionally, the command specified by the control server will cause the infected computer to download and install a Trojan known as Gh0st Rat that allows attackers to gain complete, real-time control of computers. Such a computer can be controlled or inspected by attackers, and even has the ability to turn on camera and audio-recording functions, if present, of infected computers, enabling monitors to perform surveillance on windows based machines.

Let's put this hack into perspective. What this hack really proves is that people are easier to hack then networks. The weakest link are the people who are stupid enough to open an attachment they don't recognize, even if it appeared to be from someone they trusted. That's the beauty of social engineering based hacks. The email appears to be from your mother, father, friend or colleague. The lesson we must learn is one of education, don't open attachments you don't recognize. And two, OS based Trojans are still a major treat.

And yes, for the most part the cloud is still safe at least from these sorts of hacks. The real issue with cloud security is the threat from that in which you don't know. Was my infrastructure compromised? Is my hypervisor secure? Has my operating system changed? Those are the real problems that need a technical solution. The rest is just educating the computing public to risks of social engineering related exploits.

Redux: Cloud Computing For a Cause

Originally posted December 2008.
---------
Yesterday I had a great conversation with Romanus Berg of Ashoka, the world's largest network of social entrepreneurs and a long time customer of Enomaly. In the conversation we discussed some of the opportunities that cloud computing may offer as a social empowerment tool in emerging economies.

In case you've never head of Ashoka, founded by Bill Drayton it was one of the first groups to popularize the concept of Social Entrepreneurship. The core foundation of social entrepreneurship is found within businesses that recognizes a social problem and uses entrepreneurial principles to organize, create, and manage a venture to make social change. Whereas a business entrepreneur typically measures performance in profit and return, a social entrepreneur assesses success in terms of the impact s/he has on society.

Ashoka acts as a kind of people aggregator, finding the diamonds in the rough. Those 1 in a million that effect major changes within their local society. Ashoka believes that we are in the midst of a rare, fundamental structural change in society: citizens and citizen groups are beginning to operate with the same entrepreneurial and competitive skill that has driven business ahead over the last three centuries. People all around the world are no longer sitting passively idle; they are beginning to see that change can happen and that they can make it happen.

During the conversation it became clear the both Romanus and I shared a similar vision for cloud computing not just a method of increasing IT productivity but as an empowerment tool for "under-enabled" people. People that up until recently have never had the opportunities that modern information technology has afforded the western world.

This concept of a socially conscience cloud stuck a cord with me. In many emerging economies technology in particular can skip whole generations. For example the move in China to mobile phones, skipping past more traditional forms of telephony. Similarly cloud computing may represent a major opportunity to bring both knowledge as well as modern computing technology through the use of low cost, wireless networks and mobile devices connected to regionalized clouds.

Cloud Computing as a socially conscience enterprise may not just be limited to emerging economies but may also enable the latest eco-trend of green technology. Global cloud computing represents the opportunity to make adjustments based on your carbon footprint. Imaging being able to adjust your computing energy consumption levels based on which provider of electricity is using the best and greenest sources.

Like Ashoka, I believe we are in midst of a rare, fundamental structural change. At the end of the day, cloud computing is about choice, mix in a social consciousness and we start to see one of the bigger socio-technological revolutions of our time, the information revolution.

Interest in Cloud Computing Up 3,233% Since 2007

Lately it seems that no matter where I go someone is telling me they've heard about cloud computing, from Newspapers to TV, it seems to be everywhere. I'm not talking about techies or the clouderati. I'm talking about your mother, your sister or brother, I'm talking about regular people you meet at dinner parties -- the everyday Joe.

If you are a frequent reader of my blog, you'll know I enjoy looking at trends. A particularly good analytics tool is found at Google's Insights for Search Tool. The site analyzes a portion of worldwide Google web searches from all Google domains to compute how many searches have been done for the terms you've entered, relative to the total number of searches done on Google over time. The site also allows the underlying characteristics of the data sets to be compared, for example against a broader industry. In our case, I compared Cloud Computing and a few other related terms against the broader "Computers & Electronics" industry to how much interest there was for cloud computing. (See Graph Below or original link)

A Few of the more interesting points.
1. The overall interest in Computers & Electronics is down about 46%
2. Interest in Cloud Computing peaked in November up an astounding 3,233% from 0 in October 2007
3. Interest in SaaS and Virtualization also remains very strong.

Pork Bellies, Bandwidth and Cloud Computing

In May 1999 Enron announced to the world that it was creating a new market for trading Bandwidth. A wired article from 2001 noted that it seemed to many that the then energy giant had found a new pot of virtual gold. Enron and a broader group of their experienced traders believed it was only a matter of time before bandwidth (as well as other virtual resources) would be bought and sold in much the same way that commodities markets trade everything from petroleum to pork bellies. Now, more then 10 years later this transition has yet to occur. In this post I will examine why the idea of trading bandwidth never took off and see if today might be the ideal time to try again.

Looking back at the previous attempts to create virtual commodities exchanges including Enron's failed attempt, it now appears that it was indeed a great opportunity, but just about a decade too early. In the case of Enron, they had a right vision, but suffered from the now obvious fact that it was born from an overwhelming greed. In other words, the right idea but the wrong people at the wrong time.

Today with the emergence of cloud computing looking at these past failures such as the failed bandwidth markets and as well as the successes of the energy markets of 1990's may represent a case study in how to we might go about creating a successful commodity compute marketplace.

One of the first problems in getting bandwidth trading off the ground was timing. The bursting of the dotcom bubble meant that there was a significant disconnect between an over supply of bandwidth versus the demand for it. Basically there weren't enough companies who wanted to buy and too many selling. Making the market go in one direction, down. This discouraged both buys and sellers from getting involved. The key to an active market and ecosystem is growth.

Secondly, as the wired article points out, the telecom firms that owned the fiber optic networks didn't like the idea of selling their services as a commodity. Some made the case that "not all networks perform equally well." Basically there were no measurement standards and therefore no easy way to determine the good from the bad. In addition, most telecom firms preferred to negotiate prices with customers, rather than be stuck with a one-size-fits-all pricing scheme. In a sense they would rather lose on the excess capacity and make up the difference by charging more for the capacity that was actually used. In contrast, the benefit to a commodity style approach, you may charge less overall but make more money because you have a higher utilization of your resources (volume).

Another major problem was at that time the adoption of broadband was at its infancy. Most Internet users in 1999 we're still using dial up connections. Compounding things was other than a few notable exceptions (Napster) the majority of web applications were static and light weight. Mobile apps, streaming media, social web applications, realtime web and cloud computing (Internet centric computing) had yet to be widely accepted. Fast forward to today and these applications have become the key drivers to a recent explosion of rich user generated content and the ever increasing need for realtime compute capacity to process it all.

Thanks in part to the increasing popularity of cloud computing, the idea of just-in-time compute capacity has helped lower some of barriers that limited the previous bandwidth markets from flourishing. For many the concept of distributed batch processing and compute elasticity have become critical parts of modern business IT strategies. These kind of flexible and elastic compute usage models are ideally suited to that of a spot market for commodity compute capacity (provided via a method that is quoted for immediate (spot) settlement for both payment and delivery. Also the announcement last month that Amazon Web Services would start offering excess EC2 capacity using a spot market approach has also helped legitimized the concept. The notion of selling your excess compute capacity now has a poster child (AWS), this may lead to increased acceptance of selling excess compute resources using a commodities approach. This is in much the same way that Amazon EC2 has encouraged companies to use cloud like strategies within their internal systems (private clouds). In a very real way, AWS is blazing a path for the broader industry.

I see tremendous opportunities for the trading of excess Cloud Computing resources or compute capacity and believe the most viable market example may be that of the energy marketplace. The energy market is similar to bandwidth and compute capacity in that the commodities are variable, transient and don't store well. The concept of selling excess capacity in cloud centric data centers may also make sense in that cloud providers must have significant additional capacity on hand just in case of demand spikes.

As I've said before, unused compute capacity = lost revenue. It's better to sell your excess then to have it disappear. For a lot of larger players such as Telecoms and large content providers this means un-utilized compute capacity is making you nothing. The notion of a public spot market may help address this problem.

The great example for a compute centric market may be based on that of the electricity wholesale markets. Like compute capacity, electricity is difficult to store because of it's transient nature. It needs to be available on demand, and unpredictable demand spikes may occur. Using the energy trading market as a model provides an existing proven context that may translate well into compute centric environments, not mention there are wide variety of trading platforms already built that may be easily modified to address the needs of a compute exchange market.

One of the more common energy trading models uses a automated central scheduler to balance supply and demand and calculate the market price. Another model is that of conducting auctions in various time scales, i.e. auctions for yearly and daily provision of power, with additional spot market that resolves the need for accommodating short-term demand spikes.

Before a widely accepted commodity compute trading market may form and begin trading, governments may also need to provide a common regulatory framework as well as standards and liability controls. Otherwise the market will be doomed to serve as a novelty or worst yet, limited to academic use only.

So what's next? First a trading organization must form, preferably in a transparent not for profit context, so to help avoid future Enron type scenarios. I'd also say the capital to develop such a trading platform, the will of the industry to help make this happen and some standard processes for the measurement of the cloud capacity itself. So will this happen? Certainly, but question of when is still up for debate.

Is Cloud Computing Actually Environmentally Friendly?

As we end 2009 and prepare for the next decade there seems to be a nagging question, a question that I have to say, I frequently answer without any concrete proof. A question that seems to be becoming more important then ever. The question is simple yet profound in its implications as a global citizen, is cloud computing actually environmentally friendly?

First, I will admit, I am among the group of cloud advocates who routinely claim that cloud computing is green, I say this without any proof or evidence to support my statement. I make this claim as part of my broader pitch to use Cloud Computing, I say this as a sales and marketing guy, but not as an advocate. As an advocate I'd like to have some empirical data to support my position. Believe me, I've searched, and I've searched -- although there are piles of forecasts about the potential market for cloud computing, said to be in the billions, little exists to support the green / eco-friendly argument.

On the face of it, a major incentive to move to cloud computing is that it appears to be more environmentally friendly compared to traditional data center operational / deployment models. The general consensus says that reducing the number of hardware components and replacing them with remote cloud computing systems reduces energy costs for running hardware and cooling as well as reduces your carbon foot print while higher DC consolidation / optimization will conserve energy. But a major problem still remains, where is the proof?

The problem is there is no uniform way to measure this supposed efficiency. None of the major cloud companies are providing utilization data, so it is not possible to know just how efficient cloud computing actually is -- other then it sounds & feels more green.

The problem is measuring the hypothetical. What is the hypothetical footprint of a startup that may have chosen to built their own data center versus using someone elses? Things like transportation, development, construction, management, etc are very difficult to measure and arguably still create vast amounts of CO2, yet are generally not taken into consideration. Also the power sources can have dramatically different CO2 footprints, say a coal source Vs wind or Nuclear.

Then there is the question of consumption, we now have the ability to run our applications on thousands of servers, but previously this wasn't even possible. To say it another way, we can potentially use several years worth of energy in literary a few hours, where previously this wasn't even an option. So in direct contrast, hypothetically we're using more resources, not less. On the flip side, if we bought those thousand servers and had them running (under utilized) the power usage would be significantly higher. But then again, buying those servers would have been out reach for most, so it's not a fair comparison. There we are -- back, at where we started. You may use 80% less energy per unit, but have 1000% more capacity which at the end of the day means you're using more, not less energy.

I'm not alone in this thinking, more broadly, the the International Organization for Standardization (ISO) considers the label "Environmentally Friendly" to be too vague to be meaningful because there is no single international standard for this concept. Although there are a few emerging Data Center Energy Efficiency Initiatives, notably by the EPA in the United States through their Energy Star program. The EPA programs are working to identify ways in which energy efficiency can be measured, documented, and implemented in data centers and the equipment they house, especially servers. This may be the foundation for potential cloud "eco-friendliness", but until cloud computing providers step up and provide the data, it does little to resolve the question.

Let me be clear, it's not that I'm saying Cloud Computing isn't green, I'm sure that if you were to compare a traditional data center deployment to a near exact replication in the cloud you'd find the cloud to be more efficent, but the problem is there currently is no way to justify this statement without some kind of data to support it.

If you know of some hard data, please free to pass it along.

My 2010 New Year’s Resolutions

As we end 2009 and head into 2010 I thought I'd take a moment to publicly state some of my goals & resolutions for the upcoming year. You'll notice that most of these goals are business focused, but alas, lately I've been very business focused with Enomaly and my various other schemes.

5. Keep Giving Back. For anyone who knows me, knows that I am a doer. From CloudCamps, to Cloud Interop, from Advisory boards to mentorships. I will continue to give back whenever and where-ever I can. If there is an itch, I will do my best to scratch it.

4. Keep pushing myself. Lately, I've come to the realization that my only limit, is the limitation of my imagination and in that I will continue to push the boundaries of my own limitations. Whether it's ideas or ambition, house work or being a Dad. I will strive to be the very best man I can.

3. Make More Friends. As someone who works as much as I do, there seems to be a fine line -- scratch that, actually, no line between work life and social life. Although I enjoy going out for drinks with random people in random cities. I believe that having close friends, the kinds that you can count on is important. I will work harder at being a better friend to my current ones and make some new friendships along the way. I will do this without being too creepy about it ;)

2. Make more money. I'm not sure if you're supposed to include this type of goal, but unlike wishing on a star, which probably should be selfless, as an entrepreneur I think you must focus on the obvious reason you started your business in the first place, to make money. If Enomaly was a sports team I would characterize 2009 as a rebuilding year, where we focused on developing both our product line as well as our network of partners and customers around the globe. In direct contrast, 2010 will be the year all this hard work pays off. I resolve to make as much money as possible in the most moral, ethical and environmentally friendly ways possible.

1. Spend more time with my family. Yes, this may seem obvious for some, but for someone who has spent the previous 12 months traveling across the globe covering more then 100,000+ miles it's also the most important of all. Keeping in mind my son was born January 6th 2009 and I have another on the way due this June, I must do my best to find that work / life balance. And yes, it's easier said then done.

Examining Economies of Scope

There has been a lot of discussion lately around the benefits of so called "economies of scale" found in the cloud. This scale has been described as a main driver for those choosing to use remote cloud computing services and infrastructure rather then using your own. The discussion usually points to the "fact" that these companies have greater economic scale that smaller companies can't match. A scale that dictates that only the largest companies can afford the capital expense required to the build out the massive global data center footprints required to adequately compete as multi-faceted cloud providers. I'm here today to propose another reason why these companies may have a unique advantage, and it's not only scale, but it's also scope, more specifically, Economies of scope.

According to Wikipedia, "Economies of scope are conceptually similar to economies of scale. Whereas economies of scale primarily refer to efficiencies associated with supply-side changes, such as increasing or decreasing the scale of production, of a single product type, economies of scope refer to efficiencies primarily associated with demand-side changes, such as increasing or decreasing the scope of marketing and distribution, of different types of products. "

So my hypothesis is that beyond just the money these companies bring to bear, they also bring the power of a large and well developed sales & marketing channel. In effect they can bundle a variety of applications and services to a well established network of customers and partners. Regardless if your product is better, if your brand, marketing and sales channels are strong enough you can sell anything. (Microsoft owns the Desktop, Google Owns the Net, both have key advantages) If one of your product lines falls out of fashion the company will, most likely, be able to continue operating because of diversification. It's been one of Google's key advantages, they can try out a million product directions, because they have the customer visibility and money (thanks for search world ads) to do so in the hope that one of these random products will revolutionize both their business and hopefully the world.

This may also be why often a product sold to Oracle, IBM, Google or Microsoft is more successful then one left independent. Of course there are aways exceptions to these rules. These very market leaders themselves at one point were all new entrants in the market and had to endure to overcome the incumbent players. But as a generally rule of thumb it certainly seems to give the incumbent a huge advantage. So the key to success may just be to be to outlast your competitors and continually try new things.

Just a random thought.

Introducing the Private Partner Cloud

I'm currently in Seoul South Korea for a variety of meetings with SK government and technology industry folks. Yesterday I had a very interesting meeting with the largest South Korean mobile provider. During the meeting they described a great potential use case for telecom focused IaaS cloud offerings. Basically what they've done is created an on demand compute infrastructure specifically for their network of mobile application developers. The service is offered free of charge to their partners and provides all the tools necessary for the development, testing and deployment of mobile applications specifically tailored to their particular mobile network environment. This may be one of the best use cases for semi-private cloud I've heard of.

In a sense they're subsidizing the infrastructure costs for mobile application developers they work with. They are basically covering the costs associated with the more routine aspects of mobile app development while also empowering a new and broader group of potential partners by providing a quick and easy way to develop applications for their environment. Another advantage is in gaining a greater pool of potential network specific applications & developers. Very smart.

For me this use of a private partner cloud represents a great example of the opportunities for offering free cloud based IaaS services specifically for your partners, suppliers and best customers. The free to partners model for cloud computing may be the next logical step for cloud computing. Large technology companies like Microsoft, Intel, IBM, Oracle and others may start using these partner clouds as part of their channel and developer programs. If you develop for our platform, we'll give you everything you need to do so, free of charge. This could include everything from compute to storage, development to deployment.

Spot on, Amazon Commoditizes The Cloud

The consensus found in the more traditional areas of commerce is the longer your products are sitting in your warehouses the less money you're making off them. (This is also known as carrying costs) Over the years retail focused companies such as Walmart and Amazon have strived to keep these carrying costs to a minimum by implementing various just-in-time (JIT) inventory strategies. (A technique that was first used by Henry Ford at the Ford Motor Company in the early 20th century).

The philosophy of JIT is simple: inventory is waste. The idea behind a JIT strategy is to improve a business's return on investment by reducing the associated carrying costs associated with under utilized assets, this could be a toaster sitting in a warehouse or a hosting company's unused server. The Data Center business is in a lot of ways is very similar, the more unused rack space the less you are making. Cloud centric data centers make this problem even worse, not only do you need to have excess data center space, you now need to have physical hardware in place, just in case your demand spikes. For a lot of larger players this means un-utilized compute capacity is making you nothing.

The folks at Amazon Web Services have come up with a very interesting approach to solve the problem of DC carrying costs by implementing a spot pricing scheme for unused EC2 instances. In case you're not familiar with the concept, wikipedia describes the spot price of a commodity as the price that is quoted for immediate (spot) settlement (payment and delivery). In securities, the term cash price is more often used.

The new service is called Spot Instances and allows you to bid for one or more EC2 instances at the price you are willing to pay and more importantly the minimum price AWS is willing to accept. The Spot Instance request consists of a number of parameters including the maximum bid that you are willing to pay per hour, the EC2 Region where you need the instances, the number and type of instances you want to run, and the AMI that you want to launch if your bid is successful. It's a kind of cross between an arbitrage, auction and on demand web service.

The concept of spot pricing does have some challenges. Depending on the item being traded, spot prices can indicate market expectations of future price movements in different ways. For a security or non-perishable commodity (e.g., gold, Compute Capacity), the spot price reflects market expectations of future price movements. It will cost more in December because there is more demand, then it will in July, so you buy at July prices and Sell it in December. In theory, the difference in spot and forward prices should be equal to the finance charges, plus any earnings due to the holder of the security, according to the cost of carry model. In finance this is known as arbitrage -- the practice of taking advantage of a price differential between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. It's complicated, let's just say this is how Enron made it's money.

This new spot pricing approach may open the door to EC2 capacity squatters who buy up all the excess compute capacity and in turn sell it to at a higher cost, but still lower then the market cost for a traditional EC2 instance. This would be a practical approach for the costly larger instance types.

The potential for misuse does seem to be something Amazon has already put some thought into saying in a recent blog post. "As requests come in and unused capacity becomes available, we'll evaluate the open bids for each Region and compute a new Spot Price for each instance type. After that we'll terminate any Spot Instances with bids below the Spot Price, and launch instances for requests with bids higher than or at the new Spot Price. The instances will be billed at the then-current Spot Price regardless of the actual bid, which can mean a substantial potential cost savings versus the bid amount." To me this says they will have a preference toward higher bids.

The post goes on to outline; "From an architectural point of view, because EC2 will terminate instances whose bid price becomes lower than the Spot Price, you'll want to regularly checkpoint work in progress. (Meaning you may lose your EC2 instances if a better rate comes along) Many types of work are suitable for this incremental, background processing model including web crawling, data analysis, and data transformation (e.g. media transcoding). It wouldn't make much sense to run a highly available application such as a web server or a database on a Spot Instance, though."

So what does Spot pricing mean to the IaaS world? For one, we may for the first time start to see compute capacity treated in the same way traditional commodities are with the emergence of an active secondary market for compute capacity. Very exciting times, lets just hope we don't see another Enron.

Check out the new EC2 spot instance service here >

2010 Predictions - Cloudy with a Chance of Convergence

I'm off to Seoul, South Korea next week, but before I leave I wanted to give you a little holiday gift, yes, the gift of my prognostication.

Before I do, as anyone who routinely reads my blog will understand, all I pretty much do is attempt predict the future.

As an entrepreneur that has always been a key part of my successes & failures. (That and I also seem to be an eternal optimist) Generally my view of the future is not shaped by selecting any particular point in time but instead done from what I see from my ever changing vantage point in the present.

Before I dive into my predictions, I first must give you my ideology. It is my belief that before you can predict the future, you must first understand the past. In turn by understanding the past you are able to visualize your ideal future and more importantly the way to get there. The future is not predetermined, but rather guided by the decisions we as global collective make today. (Cheesy, but hey -- I'm predicting the future.)

Anytime Data - Real Time, Anytime and Anywhere
As we continue our long march into the world of Cloud Computing and Internet centric applications in 2010 I believe that real time information (data) will be the most important asset any business large or small can have. With the sudden influx of Cloud resources those who learn to tap into this wealth of data and do so the most efficiently will ultimately succeed.

The one thing that Moore's Law and software development has taught us over the last 30 years is the more compute resource we have available the more we use. I see this holding true, except now we're not limited to any single CPU or Data Center. The future of computing will be about the speed in which we can make decisions (data analysis). This will be enabled by on an endless supply of real time information being gathered by a worldwide network consisting of both human and automated sources. The world has become one giant computer network with the Internet the glue that holds it together.

Emergent Clouds
As I've written about previously, I believe that the biggest technological business opportunities are not found in the established western countries, but instead are found in the new crop of upstart economies in regions such as Asia, South America and even Africa. The primary reason being these emerging economies have large population bases and more importantly they don't have the legacy infrastructure that most Western economies suffer from. These regions offer in a very real sense a greenfield opportunity. These (fast growing) emerging economies have an opportunity to choose the latest & best technology solutions without regard for how it may effect legacy systems -- since there really isn't any. In 2010 as we emerge from the recession I believe that we'll start to see these regions quickly become the brightest, biggest and fastest growth opportunities. Help equip these economies and you'll equip yourself for a profitable future.

Technological Convergence
Lately I've come to understand that beyond just being a buzzword, for me Cloud Computing has come to represent the convergence of many technologies. A kind of technological evolution where many existing IT systems, processes and applications have come together -- brought about by the Internet as both an operational as well as a delivery model.

This may be obvious to some, but in 2010 I see the use of Cloud Computing continuing to be developed and utilized in many different more radical contexts. Things we've never thought possible are now being made possible by the rapid advancements being brought about by near limitless access to compute resources. Any one individual in any one basement is now able to compete with the largest companies. What we're seeing for the first time are the barriers to large scale, compute intensive innovation being made available to all. It won't be those with the most money who win, but instead those with the best ideas.

Open Cloud Services & Co-operative Community Clouds

Now that I'm back and have had chance to recuperate from from my trip to Israel I thought I'd share a few of the more interesting ideas to come out of the conversations I've had. In particular were several comments that Alistair Croll made at CloudCamp Tel Aviv about the potential opportunities for what he described as "Free / Open Cloud Services" as well as an idea I had around the potential of so called "Cooperative Community Clouds".

First in regards to Open Cloud Services, basically the concept goes like this; as we move away from the traditional client/server based models of the past to more web centric / service oriented opportunities of the future, we will see open source shift from application centric (source code) toward free open services and information. Cloud providers will essentially give away access in return for greater adopt of their platforms / services, increased customer acquisition and to accelerated creation of data and information. Basically the same reasons companies open source their applications today, just applied in a cloud context.

His comments really did get me thinking and reminded me of a potentially huge but generally overlooked opportunity for Cloud Computing. What I'm talking about is that of the "Community Cloud" or "Cloud Cooperative" which may be a potential avenue to enable these types of free or shared cloud services.

For those of you unfamiliar with the Community cloud concept, NIST defines it as "a cloud infrastructure that is shared by several organizations and supports a specific community that has shared concerns (e.g., mission, security requirements, policy, and compliance considerations). It may be managed by the organizations or a third party and may exist on premise or off premise."

For me the concept of a community cloud represents an opportunity to create shared pools of compute resources which could be made freely available among a diverse but related group of contributors. This could be for compliance reasons such as HIPAA in the US, geographical or economic rationale. The idea of a community cloud is a logical offshoot of the more traditional aspects of a co-operative (Co-op), a concept that dates back as long as human have been organizing for mutual benefit (expressed today as "profit-sharing" and "surplus sharing" arrangements). Historically Coop's were organized as cooperative structures, allocating jobs and resources among each other. The concept of a cloud co-op seems fairly well suited for the smaller cloud hosting & service providers who are now forced to compete with global multi-billion dollar cloud competitors. In a sense a Cloud Co-op provides the power to group many smaller independent cloud operators together creating a much stronger organization then any single contributor could hope accomplish on their own.

For example a group of European cloud providers could all agree to pool their resources and seamlessly offer capacity to each other. In someways this is already happening within the broader research realms such as the various grid & HPC organizations (i.e CERN). The key difference is applying this model to for profit businesses who need to compete against the larger players.

Back to the idea of open services, I agree we very well may be moving toward the free (as in beer) model for cloud providers as a method of customer adoption in the same way free software has helped in the adoption of traditional software. Although a major issue still remains. The biggest problem in providing free cloud resources, like in most other areas of open source is how to eventually monitize it. Right now it seems the quickest route to the monitization of free is to sell (your business, and your users) to some larger organization, making it their problem. Open source is a great tool in an established market (MYSQL Vs Oracle, etc), but in an emerging market it has the potential to cause more harm then good potentially driving the price to zero. Which in the long run isn't sustainable. But on the flip side, near zero cost capacity does open a wide range of other potential applications and usages for things we probably haven't even consider yet. I call it the twitter business model, build it, grow it, then figure out a way to monitize it.

My 48 Hours in The Israel Defense Forces

Stepping off the airplane last Tuesday at Tel Aviv's Ben Gurion Airport I knew I was in for a memorable business trip. As I left the airplane I was greeted by a young female Israeli government official who seemed to recognize me by sight. This was to be my first indication of what was to become a very interesting few days in Israel.

Before I go into the details of my trip, I first need to give you some background which lead to my bizarre series of events. Although I was born in Haifa, a city in North Israel, I had left the country in 1982 at the age of 4, moving with my parents to Canada. Over the nearly 30 or so years since I left I have been lucky enough to travel all over world with generally little in the way of problems. Regardless of where I travel I've always use my Canadian passport, generally the Canadian passport provides me with a warm welcome regardless of the country I'm visiting. As an individual I've always identified myself both professionally and personally as a Canadian. When I speak, I like many other Canadians throw in the casual "eh" at the end of sentences, and Americans routinely make fun of my "outs" and "abouts". I'm told they sound funny. So for all practical purposes, I am Canadian.

But because of where I was born, in the back of my mind I knew I was technically an Israeli citizen but never gave it much thought. Being born in Israel to a Swiss mother and Canadian father gave me a unique gift. This unusual "gift" is that of having three citizenships. Two of which, Israel and Switzerland require military service. Since leaving Israel at the age of 4 I have never had the opportunity to go back, not so much as a conscience decision as much as I never really had any reason to visit -- albeit for business or otherwise. But unlike Israel I have been to Switzerland many times over years and even have an active Swiss passport (which I rarely use). During my many trips to Switzerland, I have never been asked about military duty, so I falsely assumed the same would be true in Israel. Making what transpired all the more surprising.

Back to my arrival in Israel, at first I thought "Wow, Avner and the folks from the Israeli Association of Grid Technologies (IGT) who had invited to speak at their annual summit really go all out. I hadn't even gone through passport control and I'm already being greeted with a warm welcome". Well it turns out the welcome wasn't as warm as I thought. Next thing I know I'm being escorted to a secret label-less backroom at the airport. At this point I was told to wait. So for about two hours I waited as occasionally attractive young Israeli women with large machine guns would come in saying something to me in Hebrew, which I don't speak. After awhile they realized I didn't speak Hebrew and said "What kind of Israeli doesn't speak Hebrew" To which I responded, "A Canadian" They then ask me a series of questions. (Who my parents were, where I was born etc. Which they already knew)

The next part caught me by surprise, remember this is supposed to be a short (72hour) trip to Israel. A young woman tells me that as an Israeli citizen I have two conditions before I can leave: First I can't leave the country without permission from the dept of Interior and must get an Israeli passport. When I asked how long she tells me several weeks. Then the best part, secondly I must report for my Israeli military service in a place called Tiberias not far from Jordan and Syria on western shore of the Sea of Galilee as soon as possible. When I said again that I was just visiting, the official indicated that I was now officially in the Israeli defense forces (IDF).

I was now on my own in a country where I didn't speak the language and certainly didn't identify myself with. I was on my own effectively drafted into one of the most well funded and active defense forces on the planet. To give you some background on the Israel Defense Forces (IDF), in 2008 Israel spent $16.2 billion on its armed forces, making it the country with the biggest ratio of defense spending to GDP as a percentage of the budget of all developed countries.($2,300 per person). Also all male citizens are required to serve three years in the IDF with exceptions made only on religious, physical or psychological grounds. Arguably the IDF is one of the most politically charged defense forces on the globe, not exactly how I envisioned spending my next three years.

It wasn't that I was afraid of being in the army, so much as the thought of potentially being away from my family in what most certainly felt like a strange foreign land. With an 11 month old baby at home and my wife and I expecting another I focused on how to get out of this most awkward predicament I suddenly found myself in. So now instead of focusing my attention on the business meetings and presentations I was supposed to have over the next few days I would have to focus on what felt like getting back my freedom. Luckly my new Israeli friends and business partners stepped up to help me out.

Some of the biggest help came from an Israeli business partner (who asked not to be named). When I eventually emerged that evening from the holding area in the Airport, he was there waiting for me and sprung into action. Within minutes he had called senior contacts within the Israeli Government, contacts that would eventually include the Deputy Prime Minster of Israel as well as various other high ranking officials. He then detailed a strategy that would have me visit both the Dept of the Interior as well as the biggest Army base in the country.

While my business partner was calling everyone he knew, the second day of my trip I attendeed the conference as much as I could. After all I was in Tel Aviv for the World Cloud Computing Summit and a CloudCamp Tel Aviv which ended up being both successes having great turn outs. Needless to say there is a tremendous amount of interest in cloud computing in Israel with several hosting companies announcing they would be offering cloud related products and services. But alas, this aspect of my trip was greatly overshadowed by my worries of being conscripted into the military as well as not being able to leave the country. Anyone who follows my twitter account could easily see I was somewhat stressed over the situation. But thanks to the huge outpouring of support from the Israeli's I met, my situation would soon be resolved with the greatest of efficiency. Literally dozens of people made phone calls and provided me with advice. It seemed that if you had a friend in the IDF, they would call on my behalf with at one point one senior military commander noting that that I must of been a very special person because he had received no less then 10 calls about me in the previous 24 hours.

All in all it took roughly 48 hours to get my situation fully resolved. First with the issuing of an Israel passport (which was given to me 45 minutes after it was requested, a new record I'm told) as well as a visit to the largest military base in the country called Camp Rabin named for Yitzhak Rabin. The base was one of the first IDF bases and has served as the IDF headquarters since Israel's founding in 1948. Think of it like the Pentagon in the U.S.

One of things that struck me at Camp Rabin (other then it reminded me of a good unconference name) was the age of the average enlistee, somewhere between 18-21 years old, unsurprisingly all of which were heavily armed. It felt like a summer camp with guns.

After a few hours of back and forth between the IDF HQ and my outpost in Tiberias I was given my release papers. The papers were in Hebrew, but luckily my local partner who seemed to have became both my chauffeur and translator was there to help. He told me that I had been discharged from the IDF for the reason of "Old Age" and that it also said that I was free to leave the country.

Yes, one crazy business trip.

Who invented Cloud Computing? Western Union did March 30, 1965

Interesting post by Nick Carr in which he points to the supposed first published evidence of the concept of Cloud Computing. The proof comes in the document, dated March 30, 1965 which outlines a Western Union executive's ambitious plan to create "a nationwide information utility, which will enable subscribers to obtain, economically, efficiently, immediately, the required information flow to facilitate the conduct of business and other affairs." In a nutshell Western Union invented cloud computing.

Specifically, "Just as a number of local or regional companies provide both electricity and gas, independent telephone companies would be encouraged to provide both telephone and information utility services in their respective territories"

The original copy of this intriguing document resides in the Smithsonian National Museum of American History, Lemuelson Center for the Study of Invention & Innovation, in the Western Union Telegraph Company Records archival collection covering the years 1820-1995.

Here is the complete text.
1965: Western Union's Future Role-as the Nation's First Cloud Utility

Why The Cloud needs Virtualization

Lots of discussion lately about the need for virtualization in a cloud computing context. On one side you have people saying it's not necessary and adds extra complexity, on the other you have people (vendors) saying that virtualization is inherently a cloud infrastructure. Some even go as far as saying that virtualization and cloud computing are one in the same. I'm here to tell you that neither is true. My position is Virtualization Doesn't Make the Cloud, it makes the cloud better. Sure, you could manage raw servers Google style, but why? For me, it comes down two main aspects of scale, scaling up, and scaling out.

First let's look at scaling out, or to scale horizontally which basically means to add more nodes to a distributed system, such as adding a new servers or storage (which is easier). These could be in the form of physical or virtual servers. An example might be scaling out from one web server system to many dedicated slaves machines. Google has made an art form of scaling out. They have data centers around the globe geared toward this one core task - just in time hardware provisioning, but for most this is a very difficult and costly endeavour. Virtualization makes this sort of instant replication & provisioning of many virtual machines much easier.

Next is scaling up or the ability to scale vertically which means adding resources to a single server in a distributed system. Typically this involves the addition of CPUs or memory to a single virtual server in the form of Virtual CPU and RAM. Unlike a physical server, in a virtual environment you can change your virtual hardware characteristics, a physical server is what it is. You run at it's maximum potential limiting it's ability to easily scale up. If you need more scale you need more hardware or have to manually add more components to the physical server (RAM, CPU, storage, etc), which means downtime while the servers are upgraded. In virtual environment this isn't a limitation and can often be done on the fly.

Vertical scaling of existing systems also enables you to better leverage Virtualization technology because it provides more resources for the hosted Operating system and Applications that can share these resources in a multi-tenant environment. Virtualization also allows for more automated programmatic control of the system resources in correlation to the demands placed on the infrastructure or application being hosted. This is because in a virtual infrastructure you are not managing any actual physical components but instead virtual representations of them.

So it is very true that virtualization isn't a requirement of a cloud infrastructure, it just makes it a heck of lot easier to manage and scale out or up or both.

CloudCamp Seoul (December 16th)

I wanted to quickly let everyone know about an upcoming CloudCamp in Seoul December 16th. We're currently looking for a few additional sponsors to help cover some of the costs. If you're interested in helping out, please get in touch.

Registration: http://cloudcamp-seoul-09.eventbrite.com

Location:
Hotel Seoul Kyoyuk Munhwa HoeKwan
202, Yangjae-Dong, Seocho-Gu, Seoul
http://www.temf.co.kr/eng/

Agenda:
13:45PM Registration
13:55PM Introduction & Networking
14:10PM Lightning Talks (long form)- chaired by Chan-Hyun Yoon, KAIST (30 min each)
15:10PM Coffee Break
16:30PM unPanel / Breakout Discussion - chaired by Yang-Woo Kim (Dongkuk University)
17:30PM Wrap Up, Dinner & Networking
Local Organizer:
- KCSA (Korea Cloud Service Association)
- KISTI (http://www.kisti.re.kr/english/index.jsp)