Welcome!

@CloudExpo Authors: Elizabeth White, Pat Romanski, Liz McMillan, Mano Marks, Rajesh Ramchandani

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
Hardware virtualization and cloud computing allowed us to increase resource utilization and increase our flexibility to respond to business demand. Docker Containers are the next quantum leap - Are they?! Databases always represented an additional set of challenges unique to running workloads requiring a maximum of I/O, network, CPU resources combined with data locality.
Due of the rise of Hadoop, many enterprises are now deploying their first small clusters of 10 to 20 servers. At this small scale, the complexity of operating the cluster looks and feels like general data center servers. It is not until the clusters scale, as they inevitably do, when the pain caused by the exponential complexity becomes apparent. We've seen this problem occur time and time again. In his session at Big Data Expo, Greg Bruno, Vice President of Engineering and co-founder of StackIQ...
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
Security, data privacy, reliability, and regulatory compliance are critical factors when evaluating whether to move business applications from in-house, client-hosted environments to a cloud platform. Quality assurance plays a vital role in ensuring that the appropriate level of risk assessment, verification, and validation takes place to ensure business continuity during the migration to a new cloud platform.
"Tintri was started in 2008 with the express purpose of building a storage appliance that is ideal for virtualized environments. We support a lot of different hypervisor platforms from VMware to OpenStack to Hyper-V," explained Dan Florea, Director of Product Management at Tintri, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
One of the hottest areas in cloud right now is DRaaS and related offerings. In his session at 16th Cloud Expo, Dale Levesque, Disaster Recovery Product Manager with Windstream's Cloud and Data Center Marketing team, will discuss the benefits of the cloud model, which far outweigh the traditional approach, and how enterprises need to ensure that their needs are properly being met.
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
In their general session at 16th Cloud Expo, Michael Piccininni, Global Account Manager - Cloud SP at EMC Corporation, and Mike Dietze, Regional Director at Windstream Hosted Solutions, reviewed next generation cloud services, including the Windstream-EMC Tier Storage solutions, and discussed how to increase efficiencies, improve service delivery and enhance corporate cloud solution development. Michael Piccininni is Global Account Manager – Cloud SP at EMC Corporation. He has been engaged in t...
You have great SaaS business app ideas. You want to turn your idea quickly into a functional and engaging proof of concept. You need to be able to modify it to meet customers' needs, and you need to deliver a complete and secure SaaS application. How could you achieve all the above and yet avoid unforeseen IT requirements that add unnecessary cost and complexity? You also want your app to be responsive in any device at any time. In his session at 19th Cloud Expo, Mark Allen, General Manager of...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus o...
Big Data engines are powering a lot of service businesses right now. Data is collected from users from wearable technologies, web behaviors, purchase behavior as well as several arbitrary data points we’d never think of. The demand for faster and bigger engines to crunch and serve up the data to services is growing exponentially. You see a LOT of correlation between “Cloud” and “Big Data” but on Big Data and “Hybrid,” where hybrid hosting is the sanest approach to the Big Data Infrastructure pro...
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at Logz.io, will explore the value of Kibana 4 for log analysis and will give a real live, hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He will examine three use cases: IT operations, business intelligence, and security and compliance. This is a hands-on session that will require participants to bring their own laptops, and we will provide the rest.
"We're bringing out a new application monitoring system to the DevOps space. It manages large enterprise applications that are distributed throughout a node in many enterprises and we manage them as one collective," explained Kevin Barnes, President of eCube Systems, in this SYS-CON.tv interview at DevOps at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
In his General Session at 16th Cloud Expo, David Shacochis, host of The Hybrid IT Files podcast and Vice President at CenturyLink, investigated three key trends of the “gigabit economy" though the story of a Fortune 500 communications company in transformation. Narrating how multi-modal hybrid IT, service automation, and agile delivery all intersect, he will cover the role of storytelling and empathy in achieving strategic alignment between the enterprise and its information technology.
Buzzword alert: Microservices and IoT at a DevOps conference? What could possibly go wrong? In this Power Panel at DevOps Summit, moderated by Jason Bloomberg, the leading expert on architecting agility for the enterprise and president of Intellyx, panelists peeled away the buzz and discuss the important architectural principles behind implementing IoT solutions for the enterprise. As remote IoT devices and sensors become increasingly intelligent, they become part of our distributed cloud enviro...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
@DevOpsSummit at Cloud taking place June 6-8, 2017, at Javits Center, New York City, is co-located with the 20th International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long developm...
A look across the tech landscape at the disruptive technologies that are increasing in prominence and speculate as to which will be most impactful for communications – namely, AI and Cloud Computing. In his session at 20th Cloud Expo, Curtis Peterson, VP of Operations at RingCentral, will highlight the current challenges of these transformative technologies and share strategies for preparing your organization for these changes. This “view from the top” will outline the latest trends and developm...