Above the Clouds Released

We've just released our white paper: "Above the Clouds: A Berkeley View of Cloud Computing."

Executive summary:

Cloud Computing, the long-held dream of computing as a utility, has the potential to transform a large part of the IT industry, making software even more attractive as a service and shaping the way IT hardware is designed and purchased. Developers with innovative ideas for new Internet services no longer require the large capital outlays in hardware to deploy their service or the human expense to operate it. They need not be concerned about over-provisioning for a service whose popularity does not meet their predictions, thus wasting costly resources, or under-provisioning for one that becomes wildly popular, thus missing potential customers and revenue. Moreover, companies with large batch-oriented tasks can get results as quickly as their programs can scale, since using 1000 servers for one hour costs no more than using one server for 1000 hours. This elasticity of resources, without paying a premium for large scale, is unprecedented in the history of IT. Cloud Computing refers to both the applications delivered as services over the Internet and the hardware and systems software in the datacenters that provide those services. The services themselves have long been referred to as Software as a Service (SaaS). The datacenter hardware and software is what we will call a Cloud. When a Cloud is made available in a pay-as-you-go manner to the general public, we call it a Public Cloud; the service being sold is Utility Computing. We use the term Private Cloud to refer to internal datacenters of a business or other organization, not made available to the general public. Thus, Cloud Computing is the sum of SaaS and Utility Computing, but does not include Private Clouds. People can be users or providers of SaaS, or users or providers of Utility Computing. We focus on SaaS Providers (Cloud Users) and Cloud Providers, which have received less attention than SaaS Users. From a hardware point of view, three aspects are new in Cloud Computing:

1. The illusion of infinite computing resources available on demand, thereby eliminating the need for Cloud Computing users to plan far ahead for provisioning.
2. The elimination of an up-front commitment by Cloud users, thereby allowing companies to start small and increase hardware resources only when there is an increase in their needs.
3. The ability to pay for use of computing resources on a short-term basis as needed (e.g., processors by the hour and storage by the day) and release them as needed, thereby rewarding conservation by letting machines and storage go when they are no longer useful.

We argue that the construction and operation of extremely large-scale, commodity-computer datacenters at low-cost locations was the key necessary enabler of Cloud Computing, for they uncovered the factors of 5 to 7 decrease in cost of electricity, network bandwidth, operations, software, and hardware available at these very large economies of scale. These factors, combined with statistical multiplexing to increase utilization compared a private cloud, meant that cloud computing could offer services below the costs of a medium-sized datacenter and yet still make a good profit. Any application needs a model of computation, a model of storage, and a model of communication. The statistical multiplexing necessary to achieve elasticity and the illusion of infinite capacity requires each of these resources to be virtualized to hide the implementation of how they are multiplexed and shared. Our view is that different utility computing offerings will be distinguished based on the level of abstraction presented to the programmer and the level of management of the resources.

Amazon EC2 is at one end of the spectrum. An EC2 instance looks much like physical hardware, and users can control nearly the entire software stack, from the kernel upwards. This low level makes it inherently difficult for Amazon to offer automatic scalability and failover, because the semantics associated with replication and other state management issues are highly application-dependent. At the other extreme of the spectrum are application domain-specific platforms such as Google AppEngine. AppEngine is targeted exclusively at traditional web applications, enforcing an application structure of clean separation between a stateless computation tier and a stateful storage tier. AppEngine's impressive automatic scaling and high-availability mechanisms, and the proprietary MegaStore data storage available to AppEngine applications, all rely on these constraints. Applications for Microsoft's Azure are written using the .NET libraries, and compiled to the Common Language Runtime, a language-independent managed environment. Thus, Azure is intermediate between application frameworks like AppEngine and hardware virtual machines like EC2. When is Utility Computing preferable to running a Private Cloud? A first case is when demand for a service varies with time. Provisioning a data center for the peak load it must sustain a few days per month leads to underutilization at other times, for example. Instead, Cloud Computing lets an organization pay by the hour for computing resources, potentially leading to cost savings even if the hourly rate to rent a machine from a cloud provider is higher than the rate to own one. A second case is when demand is unknown in advance. For example, a web startup will need to support a spike in demand when it becomes popular, followed potentially by a reduction once some of the visitors turn away. Finally, organizations that perform batch analytics can use the "cost associativity" of cloud computing to finish computations faster: using 1000 EC2 machines for 1 hour costs the same as using 1 machine for 1000 hours. For the first case of a web business with varying demand over time and revenue proportional to user hours, we have captured the tradeoff in the equation below.

The left-hand side multiplies the net revenue per user-hour by the number of user-hours, giving the expected profit from using Cloud Computing. The right-hand side performs the same calculation for a fixed-capacity datacenter by factoring in the average utilization, including nonpeak workloads, of the datacenter. Whichever side is greater represents the opportunity for higher profit.

The table below previews our ranked list of critical obstacles to growth of Cloud Computing; the full discussion is in Section 7 of our paper. The first three concern adoption, the next five affect growth, and the last two are policy and business obstacles. Each obstacle is paired with an opportunity, ranging from product development to research projects, which can overcome that obstacle.

We predict Cloud Computing will grow, so developers should take it into account. All levels should aim at horizontal scalability of virtual machines over the efficiency on a single VM. In addition:

• Applications Software needs to both scale down rapidly as well as scale up, which is a new requirement. Such software also needs a pay-for-use licensing model to match needs of Cloud Computing.
• Infrastructure Software needs to be aware that it is no longer running on bare metal but on VMs. Moreover, it needs to have billing built in from the beginning.
• Hardware Systems should be designed at the scale of a container (at least a dozen racks), which will be is the minimum purchase size. Cost of operation will match performance and cost of purchase in importance, rewarding energy proportionality such as by putting idle portions of the memory, disk, and network into low power mode. Processors should work well with VMs, flash memory should be added to the memory hierarchy, and LAN switches and WAN routers must improve in bandwidth and cost.

Table: Quick Preview of Top 10 Obstacles to and Opportunities for Growth of Cloud Computing.

	Obstacle	Opportunity
1	Availability of Service	Use Multiple Cloud Providers; Use Elasticity to Prevent DDOS
2	Data Lock-In	Standardize APIs; Compatible SW to enable Surge Computing
3	Data Confidentiality and Auditability	Deploy Encryption, VLANs, Firewalls; Geographical Data Storage
4	Data Transfer Bottlenecks	FedExing Disks; Data Backup/Archival; Higher BW Switches
5	Performance Unpredictability	Improved VM Support; Flash Memory; Gang Schedule VMs
6	Scalable Storage	Invent Scalable Store
7	Bugs in Large Distributed Systems	Invent Debugger that relies on Distributed VMs
8	Scaling Quickly	Invent Auto-Scaler that relies on ML; Snapshots for Conservation
9	Reputation Fate Sharing	Offer reputation-guarding services like those for email
10	Software Licensing	Pay-for-use licenses; Bulk use sales