Welcome!

@DevOpsSummit Authors: Yeshim Deniz, Stefana Muller, Elizabeth White, Liz McMillan, Pat Romanski

Related Topics: @DevOpsSummit, @CloudExpo

@DevOpsSummit: Blog Feed Post

Financial Sense of #PaaS By @JPMorgenthal | @DevOpsSummit [#DevOps]

Hosted PaaS is definitely the least expensive option for deploying this application architecture

Making Financial Sense of PaaS

Part I

As a consultant one of the common artifacts I’m frequently asked for is a cost estimate for a statement of work. Needless to say being the “cloud guy” these requests often revolve around estimates for delivery on a public cloud platform. I’d like say there is a high-degree of science behind these estimates, but the truth is that without a completed physical and logical architecture estimates are exactly that, an estimate. Pay for use definitely introduces an opportunity to get very fine-grained in costing, but it also requires a much more detailed understanding of the application than was required to do costing for a standalone equivalent.

Being a huge supporter of Platform-as-a-Service (PaaS), specifically, container-based PaaS, such as CloudFoundry and Heroku, I decided to apply my pricing experience to hacking up an estimate for delivering a mobile application inclusive of development through operations. The goal for me was to see if my own assertions that PaaS actually reduced both development and operating costs could be supported. My results were verified by both and independent consulting peer and a provider of PaaS.

The estimate I put together is for a new mobile application. I estimated that it would take three months to deliver into production. The application is comprised of three distinct elements: the mobile application, the mobile back end application—written in Java—and the integration with existing applications to exchange data. The approaches for implementation evaluated consisted of a spectrum of options ranging from On-Premise N-tier application to hosted PaaS. In this case, I am using the term On-Premise to represent running in a privately-hosted, privately-operated environment (e.g. corporate data center). Moreover, the options include using both licensed and open source software alternatives. This application must support 500 concurrent users initially and will grow by 25% annually. For pricing estimates the following products were used as examples:

  • Licensed N-Tier: WebSphere Application Server, Oracle, Mule
  • Open Source N-Tier: Apache/Tomcat, MySQL, Mule
  • On-Premise PaaS (licensed): Stackato, MySQL
  • On-Premise PaaS (OS): CloudFoundry Community, MySQL
  • Hosted PaaS: BlueMix or Azure Web

Before posting the numbers, I will tell you I surprised myself at the costs for building and operating a single mobile application, even for the least expensive option. I believe this should certainly be eye-opening for any CFO and should definitely spur an audit of their current application portfolio. Also, there’s probably a number of ways to argue against the numbers depending upon how your business is organized and how it delivers IT services. That said, these numbers are representative of a majority of mid- to large-scale enterprise IT practices. I am keenly aware of how numbers can be played with to justify supporting a particular outcome. I have been in the position of having to illustrate break-even for AWS versus privately-hosted converged infrastructure and I can make either option look better than the other by simply tweaking certain assumptions. That said, I’m sure I didn’t account for every minutia in this analysis.

Since the labor is a major cost factor in the analysis, it’s important to understand the assumptions that went into computing these costs. First, each labor category was factored based on the amount of time they would need to spend supporting delivery of this application. Since IT Operations continuously operates the application, there is a cost for initial deployment and then maintenance and support of the environment, where required, such as patching and updates. It was assumed development would be involved in the initial development and some bug fixes as required throughout the year. The Application Infrastructure Specialist role is responsible for configuring and deploying supporting services, such as database, messaging, identity management, etc.

And the answer is ….

Hosted PaaS is definitely the least expensive option for deploying this application architecture. The next least expensive option is double the cost for deploying on Hosted PaaS, which would be acceptable if the business received double the benefit, which it does not. Other than businesses just not being ready to build and operate on Hosted PaaS—or being in an industry that is still struggling with compliance and regulatory issues that might ensue for using public cloud—there is no financial justification that makes sense for continuing to build applications and hosting them in an on-premise environment.

What do you think? Am I in the ballpark? Missed by a mile? Please share your opinions.

More Stories By JP Morgenthal

JP Morgenthal is a veteran IT solutions executive and Distinguished Engineer with CSC. He has been delivering IT services to business leaders for the past 30 years and is a recognized thought-leader in applying emerging technology for business growth and innovation. JP's strengths center around transformation and modernization leveraging next generation platforms and technologies. He has held technical executive roles in multiple businesses including: CTO, Chief Architect and Founder/CEO. Areas of expertise for JP include strategy, architecture, application development, infrastructure and operations, cloud computing, DevOps, and integration. JP is a published author with four trade publications with his most recent being “Cloud Computing: Assessing the Risks”. JP holds both a Masters and Bachelors of Science in Computer Science from Hofstra University.

@DevOpsSummit Stories
Nicolas Fierro is CEO of MIMIR Blockchain Solutions. He is a programmer, technologist, and operations dev who has worked with Ethereum and blockchain since 2014. His knowledge in blockchain dates to when he performed dev ops services to the Ethereum Foundation as one the privileged few developers to work with the original core team in Switzerland.
Traditional IT, great for stable systems of record, is struggling to cope with newer, agile systems of engagement requirements coming straight from the business. In his session at 18th Cloud Expo, William Morrish, General Manager of Product Sales at Interoute, will outline ways of exploiting new architectures to enable both systems and building them to support your existing platforms, with an eye for the future. Technologies such as Docker and the hyper-convergence of computing, networking and storage creates a platform for consolidation, migration and enabling digital transformation.
As Cybric's Chief Technology Officer, Mike D. Kail is responsible for the strategic vision and technical direction of the platform. Prior to founding Cybric, Mike was Yahoo's CIO and SVP of Infrastructure, where he led the IT and Data Center functions for the company. He has more than 24 years of IT Operations experience with a focus on highly-scalable architectures.
An edge gateway is an essential piece of infrastructure for large scale cloud-based services. In his session at 17th Cloud Expo, Mikey Cohen, Manager, Edge Gateway at Netflix, detailed the purpose, benefits and use cases for an edge gateway to provide security, traffic management and cloud cross region resiliency. He discussed how a gateway can be used to enhance continuous deployment and help testing of new service versions and get service insights and more. Philosophical and architectural approaches to what belongs in a gateway vs what should be in services were also discussed. Real examples of how gateway services are used in front of nearly all of Netflix's consumer facing traffic showed how gateway infrastructure is used in real highly available, massive scale services.
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.