Welcome!

@CloudExpo Authors: Xenia von Wedel, Destiny Bertucci, Elizabeth White, Kevin Jackson, Liz McMillan

Related Topics: @CloudExpo, Containers Expo Blog

@CloudExpo: Article

Five Capacity Management Challenges for Private Clouds

Capacity management enables cloud operators to maximize compute cycles delivered to a customer at the lowest possible cost

Organizations that are seeking to deploy cloud-based business models for their infrastructure face unique capacity management challenges. This article will review these challenges to enable cloud providers, either public or private, to avoid the pitfalls of improper capacity management.  While the article discusses both types of clouds, the needs of private cloud providers will be especially highlighted due to the unique challenges they face with this business model.

IT Becomes a Business within a Business
For years, we have been hearing "IT must behave more like a business." A hypervisor's ability to deliver utility computing moves this vision closer to reality. Using hypervisors to deploy an infrastructure cloud fundamentally changes the relationship between IT and their customers. Application portability combined with competing cloud offerings from companies like Amazon change the dynamic between application owners and corporate IT. If end users can't explicitly move their applications between cloud providers, they can at least compare prices and service levels between providers. Right or wrong, Amazon S3 becomes a measuring stick in price, performance and service for IT organizations.

To deliver an Amazon S3 experience requires significant retooling in IT processes. Capacity management is one of the areas requiring retooling. Virtualization alone causes changes to capacity management (for more information, see http://www.vkernel.com/solutions/capacity-planning). But virtualization deployed as an infrastructure cloud adds nuances to the capacity management problem. Capacity management for cloud providers is unique for the following five reasons:

  • Capacity monitoring in addition to planning
  • Chargeback is mandatory
  • Efficiency drives return on assets
  • Tenant reporting requirements are unique
  • Optimization is a value add

Variable Demand Drives Criticality of Capacity Monitoring
Cloud deployments of virtualization technology introduce many operational changes for IT administrators. The first is a change in the amount of control IT has over the loads deployed on their hardware. With cloud deployments, either public or private, end users deploy applications using self-service portals as they see fit, load them as they desire and consume resources at whatever pace they need.

Hence, unlike the careful P2V sizing process undertaken for the first wave of virtualization where applications are sized, scheduled and deployed in a methodical manner, clouds have no careful sizing or timing that the cloud operator is aware of. Applications of unknown sizes appear, consume resources, and may just as quickly disappear. Without adequate capacity, these applications will fail to perform to customer expectations. Without real-time capacity monitoring, application deployment can dramatically impact other applications.

Hence capacity planning, a well-thought-out process for making sure there is sufficient capacity en masse, must be supplemented with capacity monitoring. Capacity monitoring is a real-time process that takes raw performance and utilization data and transforms it into actionable information concerning system-level capacity requirements. Without capacity monitoring, system administrators are left to interpret real-time utilization metrics from individual virtual machines. VKernel's research has shown that properly monitoring capacity in real time involves collecting over 20 metrics per VM at least 10 times per hour, and keeping this information for at least 30 days. A 100 VM environment would require about 17 million data points to accurately monitor capacity in the environment. This capacity monitoring, however, is a must-have to augment standard capacity planning and prevent performance issues from impacting the cloud.

Chargeback Matters
For any cloud where resources can be deployed in a self-service fashion, charging back for resources becomes a necessity. Without a method to chargeback or show back, self-service clouds would quickly find themselves at capacity since resources are essentially free.

But chargeback is a tricky area. For commercial cloud and private cloud operators, charging back for allocated resources is fairly straightforward. But, since the private chargeback operator is simply shifting costs insides the company and not impacting the bottom line, the motivations for chargeback are different. The public cloud operator is indifferent to allocated resources and utilized resources. If the public cloud operator is charging for an allocated resource pool, they make money. In fact, the higher the ratio between allocated and utilized, the more over allocation of resources is possible and the higher the profit margins. For private cloud operators, however, the goal is to actually lower the costs for the company. Hence, the private cloud operator wants the allocated resource usage to be very close to actual usage to drive resource efficiency. Highlighting the difference between actual resource usage and allocated resource usage shows internal business units the amount of corporate resources they are wasting. This motivation can then be used to right size environments and reduce overall IT spend.

While chargeback is important, cloud operators need to be mindful of what they charge. For public operators, there are competitive pressures. For private operators, charging provides a way to directly compare internal IT costs vs. external costs such as Amazon.

Is a simple $/CPU comparison between internal clouds and Amazon a fair comparison? Does Amazon contain the same level of compliance? Of control? Is the company comfortable with data outside the company firewall?

More important, chargeback for private cloud operators is primarily a means to minimize the difference between allocated and utilized resources to drive up efficiencies and VM densities. Chargeback or showback becomes a control mechanism as opposed to an actual financial transfer mechanism. Hence the rate of chargeback is not as important as the difference between allocated and actual usage.

Even here, the challenges for private cloud operators are greater. Let's assume a private cloud operator hosts 200 internal customers. Assume each of these internal customers is wasting 50% of their resource allocation. On an individual basis, the absolute value of the wasted resources may be insignificant. But across all 200 customers, the magnitude of the IT spend could be quite large. The greater good theory for IT would require that IT actually reduce resource usage for all the internal customers to claim additional savings for the company despite what the internal customers want. Private cloud operators must operate not only for their internal customers' needs, but also for the company's needs.

Setting rates for chargeback is the final tricky area for cloud operators. For a public cloud operator, the rate needs to be competitive, provide some profit margin and match customer's value. Easy enough. But what about private cloud operators? Once again, being a private operator makes things difficult. What are the rates for chargeback for a private cloud operator? Is the goal to set rates to make an internal profit when 50% of the VMs slots are filled? 75%? But if the internal cost center is making a profit, is that the right thing to do from a budgeting standpoint? Is the goal cost reclamation or efficiency?

The net of this is that for cloud operators, chargeback is critical. For private cloud operators, chargeback's purpose needs to be clearly defined to align IT not only with their customer's goals, but also the broader corporate goals.

Capacity Planning Impacts Revenue and Cost
Customers expecting to use a cloud service have high expectations with regards to time to deploy a service. For public clouds, this expectation will be a nearly instant deployment after the service request. Private cloud operators may not have quite an instantaneous expectation for their customers. Either way, the "acceptable" wait time of several weeks to deploy a new server is gone. Immediate is the word, not days.

To enable this immediate capability, sufficient capacity must be on hand to deploy new virtual machines based on both steady state and unexpected increases in demands. To meet this accelerated time duration, a high degree of capacity planning must take place to predict future capacity needs ahead of demand and allow for the slower process of procuring and installing physical servers, networks and storage.

It's easy to meet rapid deployment expectations by over procuring hardware. The danger here is that over procurement impacts cash flows and profitability for a cloud. Having large amounts of depreciating assets sitting around is not a sound business strategy. If these assets are plugged in and configured, the added power costs worsen an already bad situation. Under procuring hardware is just as bad since cloud operators will be unable to meet customer needs should their systems not have available capacity. Hence the goal is to have a solid understanding of consumption and then apply a safety factor to allow for unexpected demand.

Understanding capacity needs across the entire IT infrastructure is important. But it's just as important to understand where there are available VM slots for the best placement of VMs from a performance and a capacity standpoint. Utilizing available VM slot reporting ensures the performance of the running VMs and increases the VM density per host, which is critical to achieving a high return on assets.

Capacity planning is critical to cloud operators to generate a high return on assets while also meeting customer demand for near instantaneous deployment requests.

Tenant Reporting
With a standard virtualized environment, the IT organization may report on environment status to a few senior IT leaders. Not so with an infrastructure cloud. For public clouds and private clouds, there is a greater expectation of visibility into the environment. Reporting for cloud tenants could involve availability, resource allocation, resource utilization, current charges, and pricing plan. The amount of information revealed to a customer could depend on the business philosophy or type of cloud. For a private cloud, revealing differences between allocated resources and utilized resources and the savings a customer could achieve by reducing their resources allocation makes sense for a company trying to save money. For a public cloud provider, however, suggesting ways to reduce resource allocations may not be in the provider's interest.

Beyond questions around what type of information to provide is the manner in which information is provided. For public cloud operators, online portals are most likely the reporting distribution mechanism of choice. For private clouds, however, information needs to flow seamlessly into the enterprises existing reporting infrastructure. This could involve connections with SharePoint, with IT service management frameworks, internal portals, or simple email distribution of reports on an ongoing basis.

Optimization Is a Value Add
Many times, when virtual machines are first deployed, they are over allocated CPU, memory and storage. In a cloud deployment, this over allocation does not cost the cloud operator revenue. In fact, just the opposite occurs. The cloud operator deploys the requested resources, but despite not being used, the cloud operator still collects the revenue. As discussed earlier, the cloud operator can decide whether to reveal this to the tenant or not.

While the cloud operator may not care about wasted resources to an application, the end customer does as does the firm's CFO. Decreasing requested CPU, memory and storage reduces monthly tenant costs. Hence, optimization becomes an optional value-add service for the provider to offer tenants to reduce spending. This would be the equivalent of your cell phone company contacting you to suggest a lower monthly plan. While it lowers the monthly revenue of the cloud operator, it dramatically improves customer loyalty.

Conclusion
Because of the increased need for chargeback, monitoring, capacity planning, and reporting, capacity management takes on added urgency for cloud operators. Capacity management performed correctly enables cloud operators to maximize compute cycles delivered to a customer at the lowest possible cost and, thus, capacity management is a key building block for any cloud implementation.

More Stories By Bryan Semple

Bryan Semple is Chief Marketing Officer at VKernel. A 15+ year high-tech veteran, he has spent the last 8 years working in server and storage companies focused on virtualization technologies. He comes to VKernel from NetApp where he was the general manager of the storage virtualization business unit. Under his leadership, the group experienced record growth, expanded engineering operations to India, and built global awareness for NetApp’s industry leading storage virtualization solutions.

Prior to NetApp, Bryan was VP of Marketing at Onaro where he established the company as a leader in storage management software and built the marketing processes that supported the company’s profitability and successful acquisition by NetApp in 2008. Before Onaro, he was the VP of Product Marketing and Strategy at server blade virtualization pioneer Egenera. At Egenera, he worked with early adopters of infrastructure and server virtualization technologies in the financial services industry as the company scaled from one to several hundred customers.

Bryan holds a BS in Systems Engineering from the US Naval Academy and an MBA from Stanford University.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@CloudExpo Stories
"Storpool does only block-level storage so we do one thing extremely well. The growth in data is what drives the move to software-defined technologies in general and software-defined storage," explained Boyan Ivanov, CEO and co-founder at StorPool, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
As DevOps methodologies expand their reach across the enterprise, organizations face the daunting challenge of adapting related cloud strategies to ensure optimal alignment, from managing complexity to ensuring proper governance. How can culture, automation, legacy apps and even budget be reexamined to enable this ongoing shift within the modern software factory? In her Day 2 Keynote at @DevOpsSummit at 21st Cloud Expo, Aruna Ravichandran, VP, DevOps Solutions Marketing, CA Technologies, was jo...
As Marc Andreessen says software is eating the world. Everything is rapidly moving toward being software-defined – from our phones and cars through our washing machines to the datacenter. However, there are larger challenges when implementing software defined on a larger scale - when building software defined infrastructure. In his session at 16th Cloud Expo, Boyan Ivanov, CEO of StorPool, provided some practical insights on what, how and why when implementing "software-defined" in the datacent...
Blockchain. A day doesn’t seem to go by without seeing articles and discussions about the technology. According to PwC executive Seamus Cushley, approximately $1.4B has been invested in blockchain just last year. In Gartner’s recent hype cycle for emerging technologies, blockchain is approaching the peak. It is considered by Gartner as one of the ‘Key platform-enabling technologies to track.’ While there is a lot of ‘hype vs reality’ discussions going on, there is no arguing that blockchain is b...
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across business networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost as well as advance trade. Are you curious about how Blockchain is built for business? In her session at 21st Cloud Expo, René Bostic, Technical VP of the IBM Cloud Unit in North America, discussed the b...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
Is advanced scheduling in Kubernetes achievable?Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, answered these questions and demonstrated techniques for implementing advanced scheduling. For example, using spot instances and co...
The use of containers by developers -- and now increasingly IT operators -- has grown from infatuation to deep and abiding love. But as with any long-term affair, the honeymoon soon leads to needing to live well together ... and maybe even getting some relationship help along the way. And so it goes with container orchestration and automation solutions, which are rapidly emerging as the means to maintain the bliss between rapid container adoption and broad container use among multiple cloud host...
The cloud era has reached the stage where it is no longer a question of whether a company should migrate, but when. Enterprises have embraced the outsourcing of where their various applications are stored and who manages them, saving significant investment along the way. Plus, the cloud has become a defining competitive edge. Companies that fail to successfully adapt risk failure. The media, of course, continues to extol the virtues of the cloud, including how easy it is to get there. Migrating...
Imagine if you will, a retail floor so densely packed with sensors that they can pick up the movements of insects scurrying across a store aisle. Or a component of a piece of factory equipment so well-instrumented that its digital twin provides resolution down to the micrometer.
The need for greater agility and scalability necessitated the digital transformation in the form of following equation: monolithic to microservices to serverless architecture (FaaS). To keep up with the cut-throat competition, the organisations need to update their technology stack to make software development their differentiating factor. Thus microservices architecture emerged as a potential method to provide development teams with greater flexibility and other advantages, such as the abili...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
Product connectivity goes hand and hand these days with increased use of personal data. New IoT devices are becoming more personalized than ever before. In his session at 22nd Cloud Expo | DXWorld Expo, Nicolas Fierro, CEO of MIMIR Blockchain Solutions, will discuss how in order to protect your data and privacy, IoT applications need to embrace Blockchain technology for a new level of product security never before seen - or needed.
Leading companies, from the Global Fortune 500 to the smallest companies, are adopting hybrid cloud as the path to business advantage. Hybrid cloud depends on cloud services and on-premises infrastructure working in unison. Successful implementations require new levels of data mobility, enabled by an automated and seamless flow across on-premises and cloud resources. In his general session at 21st Cloud Expo, Greg Tevis, an IBM Storage Software Technical Strategist and Customer Solution Architec...
Nordstrom is transforming the way that they do business and the cloud is the key to enabling speed and hyper personalized customer experiences. In his session at 21st Cloud Expo, Ken Schow, VP of Engineering at Nordstrom, discussed some of the key learnings and common pitfalls of large enterprises moving to the cloud. This includes strategies around choosing a cloud provider(s), architecture, and lessons learned. In addition, he covered some of the best practices for structured team migration an...
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application p...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
In his session at 21st Cloud Expo, Raju Shreewastava, founder of Big Data Trunk, provided a fun and simple way to introduce Machine Leaning to anyone and everyone. He solved a machine learning problem and demonstrated an easy way to be able to do machine learning without even coding. Raju Shreewastava is the founder of Big Data Trunk (www.BigDataTrunk.com), a Big Data Training and consulting firm with offices in the United States. He previously led the data warehouse/business intelligence and B...
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...