Brandon WatsonDirector, Azure Services Platformbrwatson@microsoft.com www.manyniches.comtwitter.com/brandonwatson

What’s Going on in the Cloud?

Today’s Topics

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Who am I?Re-tread at MicrosoftEx-private equity guyEntrepreneur on loan to MSFT after my last exit – “wifestyle” reasonsMy last company (IMSafer) was an exit for cash

Why cloud?Continuing trend of simplifying app creation & service deliveryFurther reducing friction in creating new opportunities for businessConcentration of IT dollars

Who are we talking about today?Amazon Web Services, Google App Engine, Microsoft AzureNot VMWare, Salesforce.com or multitude of startups

Future directions?Investment whitespace and needs

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First, Some DefinitionsThere’s a lot of aaS’s out there

Infrastructure as a Service (IaaS)The ability to manage and launch virtual machines on hardware that you do not own

Platform as a Service (PaaS)A more abstracted view of the development platform, where all facilities required to support app life-cycle are available via network

Software as a Service (SaaS)The delivery of an experience to a customer, on demand, generally using the web as a delivery mechanism

Software Plus Services (S+S)Using the best of software and services to deliver the right experience to customers at the right time on the end point of their choosing

Brandon as a Service (BaaS)Rare Seattle fish, known for bloviating and biting

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Cloud Computing PlatformsMy themes for today

Functionality•How much can you do with what you have?

Familiarity•Do you instinctively know how to use it?

Scalability•How easy is it to handle more inputs and workloads?

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Cloud to the rescue!

The Trouble With BigLarge scale deployments generally get one of these two reactions

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Service Types

Amazon Web Services

Infrastructure | Payments

Elastic Compute• On-demand, resizable compute• Elasticity is not automated• Supports Linux & Windows server• Very easy to get started, and use

Simple DB• Core DB functions (index and query)• Schema-less DB, much like BigTable• Limited primitive types• Optimized for CRUD operations

S3 Storage• Simple web services for storing arbitrary

amounts and types of data• Data store is unlimited (objects to 5GB)• It’s about availability over consistency

Dev Pay•Billing as a service•Ensures authorized app access

Flexible Payment Service•Payment system built on top of AMZN’s infrastructure•Customers can use AMZN credentials for payment

Simple Queue• Service for storing and passing

messages between computers• Queue messages are durable

CloudFront•Web service for global content delivery•Targeting Akami with lower cost

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Datacenters Are SpendyBest to share that risk if possible

Source: AMZN 10Qs & 10Ks

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5 Theoretical Whys of AMZN

Why is our CapEx so high?Because we have to buy a lot of servers.

Why are we buying a lot of servers?Because we need to support the traffic needs of our business and our partners’.

Why aren’t we able to support them with fewer servers?Because traffic patterns and server utilizations require more servers.

Why do traffic and utilization patterns have an impact on number of servers?Because the traffic spikes in Nov and Dec create a need for peak load.

Why does the traffic have massive spikes in Nov and Dec?Because AMZN and all of it’s partners are in the same business – retail.

Resolution – attract customers onto your technology platform who have different patterns, and no longer are major traffic component in own system

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Amazon Web ServicesHosting++ is more expensive than you think

My last company as an exampleHosting with AMZN would have cost $4,500 / month

3 front end servers, 1 dev front end server 2 database servers, 1 dev database server 2TB of storage Bandwidth

10U of hosting cost us $750/month Hardware is cheap and getting “free-er”

Net outScalable – Scales nodes, notalgorithmsFunctional – Good UI with lotsof services available for buildingapps and servicesFamiliar – Use the server appsand OS that you already knowNo real developer DNA, andno support for partners

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Service Types

Google App Engine

Infrastructure

Compute• Highly scalable and built on top of GOOG

infra• Elasticity is automated• No concept of an OS or a virtual machine• GOOG limits the actual scalability

BigTable Storage• Entity relationship storage• Built on top of GOOG’s database for their site• No tools for data management

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5 Theoretical Whys of GOOG

Why are we making money?Because we sell advertisements against pageviews.

Why aren’t we selling more advertisements?Because there is a lack of usage of online services globally.

Why is the growth of online services stalling?Because there is a lack of content, not connectivity.

Why is there a lack of content?Because there is no cheap and easy way to build and host dynamic, big scale

applications for the web.Why is there no easy way to build dynamic, big scale applications?

Because hosting can be expensive, and setting up servers for large scale can be extremely difficult.

Resolution – release a low cost, highly scalable hosted application programming framework with a very specific target application type in mind – to create content against which to sell ads.

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Google App EngineMy First Web App

My last company as an exampleCould not have handled the load – too many transactions per secondCould not have handled any of the background processingComplete re-write of data-access layerComplete re-write to Python

Net outScalable – Rate limited by GOOG with littlevisibility into what resources are in useFunctional – Very limited by features madeavailableFamiliar – Language, framework anddatabase all new conceptsNo SLAs, but marketplace iscoming for GAPE plug-ins

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Azure Services PlatformBuild Apps & Services Using What You Know

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Service Types

Azure Services Platform

Infrastructure | Connectivity | Security

Elastic Compute• On-demand, resizable stateless application

and service hosting environment• Elasticity is automated and managed by fabric• Supports multiple programming models• Simple queue built in• Very easy to get started, and use

SQL Data Services• Core DB functions (index and query)• Relational in the cloud• Built on top of Microsoft SQL

Table/Blob Storage• Simple storage for the compute layer• Data store limited and not meant for heavy

DB• Tables and blobs for storing many data types

Service Bus• Easy connectivity thru firewalls• Passing messages between

apps and services• Queue messages are durable• Multiple connectivity options

Access Control•Standards based•Claims based authentication for connecting users to apps and services

Live Services•Easy synchronization of files, folders and applications •Access to MSFT social graph•Great developer services and monetization engine

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Azure Services PlatformBreadth and depth to deliver solutions

My last company as an exampleRuby & Rails support is “coming”Might still need a RDBMS local to Ruby code (depends on SQL Data Services issue)Message queuing would have helped immenselySQL Data Services would have solved our database sharding challengesMuch easier to connect to on-premise deployments (our B2B solution)

Net outScalable - Easier to build scalable apps and DB, and costslook like they will be lower due to utilization optimizationFunctional - Many of the core on-premise developerfeatures which customers depend on are availableFamiliar – Standards based and can leverage existingdeveloper skillsDeep support for ISVs and partners to build a business

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Ideal Cloud ScenarioDeploying on the cloud should feel like this…

WhitespaceWhat’s interesting, and what’s missing

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Essential ServicesVery hard for a startup to compete in building out a new operating system or development platform layer

Building Block ServicesDevelopers will need plug and play pieces for services they are building – PHP is a great proxy for how this could shake outBilling, data management, business intelligence, application bridges

Finished ServicesPlenty of SaaS applications are being created – estimated $20B in revenues alreadyLots of opportunity for bridging on and off-premise enterprise applications

Interesting Private CompaniesInfrastructure – AppNexus, Rackspace, GoGrid, FlexiscalePlatform Specific – Heroku, Engine Yard, Blue Box Group, JoyentConnectivity – Cloudswitch, Cohesive FT’sManagement – Rightscale, ElastraDev Services – BrowserMob, Soasta, LiebSoft