Three weeks without a blog post makes me feel guilty. Thank goodness I'm genetically incapable of feeling guilt for more than about 10 seconds.

In 2010 GCS is expanding our cloud service offerings in online file storage, backup, email, application hosting, platform hosting, and infrastructure hosting. Our first type of offering is a web based file server. While researching the possibilities only one vendor met all of our requirements, Egnyte. Their On Demand File Server provides an simple web interface to access files, mapped network drive using WebDav, a ton of storage and other advanced features. Key among these features is their Local Cloud product. Internet connection speeds are still too slow to move large files from cloud storage to local use on a regular basis. Egnyte's Local Cloud products allows you to work locally and have those changes synchronized to the cloud. When you later access change the document in the cloud, it syncs changes back to the local storage.

With prices starting at $75 for 1TB of storage, this product looks incredibly enticing. In true "eating our own dog food" fashion, we're in the midst of an internal deployment after a successful round of testing.  More to come soon! Happy New Year!

With the recent release of Microsoft Exchange 2010, most of our client base is faced with yet another upgrade. Exchange 2010 offers three compelling features that should justify the upgrade. The addition of email archival functionality is a long-awaited tool typically performed by expensive third-party add-ons. A hybrid model of mailbox storage allows both on-premise and cloud-based mailboxes. This eases the transition to the cloud while maintaing large, slow mailboxes in a high performing environment. Improvements to the failover functionality make highly available email much easier for small and mid-market clients.

Many clients and prospects have no email archival strategy at this time. Compliance with federal and industry standards such as Sarbanes Oxley represent only one benefit. Email is the primary communication tool used by business today. Promises are made, orders placed, complaints lodged and bad behavior recorded. Storing this data in an easily accessible manner ensures that committments are upheld and risks mitigated.

Adding a variable cost element to your email system without sacrificing the superior performance, storage and customization of an on-premise Exchange server is desired by many companies. A recent prospect has a few hundred seasonal employees with mailboxes and another few dozen year round staff. The year round staff average nearly 5GB per mailbox. By splitting this storage up between on-premise and cloud the prospect can elimate mailbox costs during the slow season. This can be accomplished in Exchange 2007 as well but is more elegant in Exchange 2010.

The disaster recovery improvements in Exchange 2010 allow easier failover and failback during outages. Many of our clients have embraced virtualization for hardware redundancy. Exchange 2010 allows for equally graceful level of software and data redundancy.

When considering a hosted or cloud provider, ask the 10 simple questions below to further your analysis.

Data Center: Are your servers stored in a data center? Please describe your power, data and cooling redundancies?

Compliance: Are you compliant with PCI and SAS 70 standards?

Longevity: What happens in the event your business fails? How do we recover our data? How do we use it, once recovered?

Backup Systems: How do you backup the data? How often is it stored offsite? How is it backed up onsite?

Architecture: Do you utilize virtualization with shared storage?

Reliability: Do you offer a Service Level Agreement? How much credit do we receive when you are down? At what amount of downtime do I receive the credit?

Performance: How does our user count compare to your largest client and to your total user count?

Bandwidth: Approximately how much bandwidth per user is required at our office?

Ownership: Do you own the equipment and licenses on which you're hosted?

Support: What are your support departments hours of operation? How is after hours support provided?

This is a quick start but should start separating the real providers from the pretenders.

We've long been fans of Sonicwall firewalls at GCS. Advanced features, easy web-based configuration, low failure rates and low cost make it a very compelling option for many clients. With the rollout of the new product lines Sonicwall offers the Enhanced Firmware features (most notably WAN Failover and Load Balancing) as a standard item on every product. My small office clients can now get WAN failover in a device for less than $400. This is a real cloud enabler. For a few grand you get WAN failover plus a High Availability configuration on your firewalls.

Today Avaya released a KB article describing how to configure Sonicwalls to prioritize voice traffic between sites. With the rise in popularity of MPLS and managed routers, we are seeing far more Ethernet handoffs than T1 handoffs these days. The Sonicwall NSA 240 is a great device to terminate that MPLS circuit and appropriately manage the traffic.

The co-founder and CEO of Oracle carries a lot of weight in many tech circles. An event last night at Silicon Valley's renowned Churchill Club saw Ellison again downplay the importance of "cloud computing." This is not the first time Ellison has been so bold. His point is consistent - cloud computing encompasses a wide variety of solutions that are already in use.

It feels like cloud computing has accelerated in deployment so quickly for this very reason. Solutions that were previously hosted, managed, Saas, etc are now grouped together under a "cloud" moniker. The real opportunity, that has preceded "cloud" systems, is the shift from fixed costs to variable costs in IT budgets. For many organizations this improves their flexibility tremendously.

When should I recommend Cloud solutions to my clients? I don't know. Today I'm going to start figuring it out. I'm going to compare an on-premise build with a cloud based solution for a hypothetical 50 employee organization. Allow me to skip a lot of details and say it will provide roughly equivalent features and security. Anything required in both solutions was a wash and therefore ignored. What you're left with is mostly a lot hardware (servers, SANs, firewalls, switches for iSCSI, etc), deployment services and hardware-level support.

NOTE: All pricing is retail and rounded. Individual proposals may vary. A greenfield is assumed - no data migration. Everything that was common to both solutions was excluded so this may represent a small portion of the overall project. 

Cloud Offering:

In the cloud we'll procure 20Ghz of processor capacity, 50GB RAM, 3 TBs storage with 10 Mbps of bandwidth to host 15-18 Virtual Machines. Onsite backup for 1.5 TBs. This will run about $10,000 per month.

On-Premise Offering:

On-premise will provide provide about 60Ghz (over 24 cores), 96GB RAM, 3TB direct attached storage for backup, 3TB iSCSI SAN. We'll plan on hosting 25-30 VMs on this platform. You'll get this for about $160,000 including 200 hours for installation and configuration. See my build here. Note we dropped 25% of capacity for high-availability.

To even the playing field we have to factor in datacenter costs for the On-Premise Offering. I see a rack, 10Mbps of bandwidth, and 40A of power. Say $3000 per month?

Conclusion:

Let's compare 3 years of costs. In the cloud you're out $360,000. At home, including the data center costs, you're looking at $268,000. The $92,000 delta has to cover the hardware support and maintenance for 3 years. There is some difference in capacity and reliability. I hope it helps your evaluation to say that the cloud offering, in this case, is 35% more expensive.

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In today's post on the CIO.com blog, Michael Hugos raises several interesting points about transitioning IT asset costs from fixed costs to variable costs. He boldly predicts that doing so will herald a rapid economic expansion. Though I'm not willing to go so far as he is, I am a big proponent of emphasizing variable costs. The justification is simple dollars and cents.

Even in small organizations IT asset acquisition is well into the tens or hundreds of thousands of dollars per year.  Dollar for dollar it is hard to beat rolling your own virtualized environment.  Do-it-yourself, if you're able, is the cheapest method. There are several mitigating factors to this:

1) The competition for those budgeted dollars is diverse. Instead of spending $100,000 this year on assets, what if you spent $35,000 on cloud-based offers and moved $65k into a marketing program, new sales reps or other projects that increase top line revenues.

2) The opportunity cost of building and maintaining that system interferes with other IT projects. By migrating routine and time-consuming tasks into optimized environments that are designed for those tasks IT departments can focus on projects that require highly specialized knowledge.

3) New cloud offerings from Terremark, Amazon and 3Tera (among others) are radically altering the scale at which IT exists in small and mid-sized businesses. The cost savings that come from purchasing a small piece of a big pie are significant when compared to your home baked pie.

Many organizations would do well to investigate methods that take IT assets off the books and put those capital dollars into more revenue generating tasks. In any economy that is just good sense.

I needed to find a home for seven wayward servers. The prospective owner had decided to stop owning hardware just as the project to deploy these severs was underway. My job seemed easy enough - replicate a basic Microsoft stack (Exchange, MOSS, SQL, Dynamics GP) for a fixed monthly fee in a land far, far away. I've been closely following the development of hosted/managed/cloud systems for years, have built numerous virtualized environments and I have a very health monthly data center bill. Still the last few days has opened my eyes to the breadth of the cloud's offers. In the end this dynamic market, with a vast pool of options, won over a skeptic like me.

I want to put that last statement into the proper context. I own a value-added-reseller business that has generated millions of dollars in revenue selling hardware and licenses. Last year almost 40% of our revenue was equipment resold from vendors such as HP, Dell, Cisco, Sonicwall and more. I suspect that in the next few years that number will dwindle substantially.

After extensive deliberation I have come up with one singular reason to embrace the 'cloud' that applies to IT departments as well as VARs. We all have better things to do. The time spent procuring, installing and supporting hardware and software detracts from time spent integrating, training and customizing. What if a typical IT project directed a bigger part of the budget at these services? Businesses will derive more value from the technology. The employees will use more of the functionality. The system will work better with the other technology around it. It will more closely match business processes.

Far from competing against the services offered by most IT departments and VARs, cloud computing offers the opportunity to expand these organizations. Those that successfully transition their skill sets can expect to see revenues and budgets increase as businesses receive more consistent performance from existing systems and lower costs to add new systems. This transition will not occur overnight, but in next decade we will see fewer and fewer servers in offices, more servers in the clouds. Think hard about investments in on-premise equipment. There are compelling options out there.

A recent project has forced me to analyze two cloud computing providers - Terremark and Rackspace. In this post I'll discuss my analysis of the two services and use a recently completed Private Cloud project to provide cost comparison.

Terremark's Enterprise Cloud service fit the needs of my client best. This is a fully virtualized environment that completely divorces the client from hardware concerns. The Enterprise Cloud enables rapid deployment of Virtual Machines. All management services from the OS up and managed by the client.  It consists of HP ProLiant servers with a 3Par SAN. Redundant firewalls and load balancers are included in every package. All equipment is shared. Virtualization is performed using VMWare ESX 3.5. Server management occurs through a web application and includes many tasks that you would find in VMWare's management tools. Terremark offers packages at fixed Ghz and GB or RAM (entry is 5Ghz and 10GB RAM). You then add storage, backup and bandwidth. There is no incremental charge per VM, only for the resources it consumes.

Rackspace's Platform Hosting takes a different approach. They supply a mix of dedicated and shared resources to create a similar environment. Firewalls, load balancers and servers are dedicated. SAN resources are shared. Rackspace allows access to the VMware infrastructure tools so all functionality is exposed. Rackspace's price plans vary based on hardware redundancy and resources required.

Some interesting points:

• Terremark offers technical support 12 hours per day. Rackspace's support is 24/7/365.
• Terremark is hardened to withstand a CAT 5 hurricane. Good thing since they are based in Miami.
• Pricing favored Terremark by 25-30% when comparing environments with similar features.
• Network configuration is limited at Terremark. There is a maximum of 4 VLANs.
• Both solutions offer use of existing licenses or their hosted licenses
• Neither were excited about voice applications due to QoS concerns.
• Rackspace does not offer a backup service in the Platform Hosting option. Backup will require a dedicated server and regular offsite downloads.
• Rackspace included 6 TB of download and unlimited upload in their base plan. They claim it was the equivalent of 20Mbps sustained for the entire month.

Honestly I'm afraid I have to end this blog post by changing the name to a braindump. I am beginning a 30 day demo with Terremark immediately. I will continue to assess the two providers and post the information here. Look for follow up posts soon.