White Paper. Platform9 ROI for Hybrid Clouds

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1 White Paper Platform9 ROI for Hybrid Clouds

2 Quantifying the cost savings and benefits of moving from the Amazon Web Services (AWS) public cloud to the Platform9 hybrid cloud. Abstract Deciding whether to deploy a public cloud or hybrid cloud solution for enterprise computing involves complex financial considerations that require detailed and careful analysis. The wide range of available options makes it challenging to perform accurate apples-to-apples cost comparisons between hybrid cloud deployment and public cloud solutions. In this white paper, we explain the economic benefits of deploying a web application using Platform9 Managed OpenStack a hybrid cloud solution that leverages private and public cloud resources instead of an Amazon Web Services (AWS) public cloud solution. Hybrid Clouds: Opportunities and Challenges Cloud computing was a fairly obscure concept ten years ago, but has now grown into a multi-billion-dollar market. Public cloud offerings such as AWS, Microsoft Azure and Google Cloud Platform have featured prominently in this computing trend. These services are commonly viewed as a cheaper alternative to building an internal, private cloud infrastructure. However, costs can spiral out of control for enterprises that rely completely on public cloud services on a large scale. Many organizations have started to use both private and public cloud offerings, combining them to create a hybrid cloud. These solutions leverage the flexibility and utility pricing of public cloud offerings with the control and security of a private cloud. With a hybrid cloud infrastructure, organizations can maximize the use of IT resources while introducing self-service capabilities and empowering end users. Public cloud services can continue to act as a necessary extension of the limits of a private cloud, providing the flexibility to meet occasional bursts in computing power demand. The up-front cost of hybrid environments can be higher, but in many cases the investment pays off through lower costs over time, increased productivity and more secure and controlled access to mission-critical data. By leveraging the benefits of two approaches, hybrid clouds can be an effective solution for meeting a growing company s increasing demands on IT. Despite the great potential of hybrid clouds, however, implementing any new technology poses risks and challenges. This makes quantitative evaluation of best practices for building a hybrid cloud important. Opportunities A major benefit of implementing a hybrid cloud environment is saving money. A fully private cloud requires building an infrastructure powerful enough to handle the maximum possible level of resource requirements. With a hybrid solution, organizations can build a more modest private cloud based on typical usage patterns and leverage public cloud offerings only when burst demand occurs. Hybrid clouds can also support existing organizational needs while permitting future growth. Scaling on-premises infrastructure is expensive for growing companies, and requires accurate growth predictions to be cost-effective. Hybrid cloud implementations give organizations unlimited resources on demand, providing flexibility that is a major factor driving the adoption of these solutions. Another expected benefit is enhanced organizational agility. Leveraging the public cloud during times of heavy use means that the organization will experience fewer outages and less downtime. Similarly, the public cloud offers the ability to rapidly and inexpensively develop and test new applications, allowing many options to be considered with a minimal investment until the organization decides where to host permanently. Challenges Costs can be a reason to choose a hybrid cloud strategy, but can also be a major obstacle. The public cloud may be perceived as an attractive option due to its flexibility and relatively low cost to operate, but heavy use of public cloud resources can lead to unexpectedly high bills. Building a private enterprise cloud can result in high on-going software licensing costs, depending upon the underlying server virtualization and orchestration layers these can cost many times more than the physical hardware.

3 Another major challenge is managing different public cloud services when multiple providers are used. Each has its own management and provisioning environment, and one company s is considered completely independent from the others. In an environment with multiple clouds it is essential to always have a complete picture of the total number of deployed instances, volumes and networks, and the status of each. An orchestration layer such as the OpenStack Omni project that provides the ability to track and control activities via a central point can be one possible solution to this problem. The orchestration layer itself communicates with the various cloud services through application programming interfaces (APIs). However, end-user organizations face many challenges when they attempt to deploy cloud orchestration on-premises. Platform9: A Cost-Effective Hybrid Cloud Solution Managed 24/7 monitoring Proactive Troubleshooting Zero Touch Upgrades Deploys Instantly Developers Applications Infrastructure Architect Operations Applications Application Architects AWS Figure 1. Platform9 Managed OpenStack for Hybrid Clouds Platform9 can also manage K and ware virtualized workloads running on-premises. It discovers greenfield and brownfield environments, and can be up and running in minutes without requiring professional services. Customers can use a single pane of glass to deploy workloads on public clouds during temporary spikes in traffic cloud bursting. Platform9 hybrid clouds provide extreme agility and availability. For example, some teams may prefer to run dev/test workloads on a public cloud while production environments remain on-premises. With Platform9, DevOps teams can set up the development pipeline in any way, while the public cloud can be included as an option for high availability (HA) and disaster recovery.

4 Hybrid Cloud Computing ROI Methodology We will now provide a framework for comparing the cost of a web application development solution based solely on the AWS public cloud against one utilizing the Platform9 Managed OpenStack hybrid cloud (comprising K-based private clouds and AWS public clouds for bursting). This framework will help you make informed decisions, reduce risks, and have meaningful conversations about ROI with your key stakeholders. Understanding Cloud Computing Costs To establish the cost for your enterprise s cloud computing deployment, we recommend evaluating costs for the two compared scenarios over a five-year timeframe. In our example we are using costs based on the US East - N. Virginia region. AWS Public Cloud Computing Costs The cost of using the AWS public cloud is the sum of Amazon Elastic Compute Cloud (EC2) and Elastic Block Store (EBS) shared storage costs over a five-year period: AWS EC2 costs: Costs for the required number of EC2 instances are based on AWS pricing for hourly compute capacity with no long-term commitments. Amazon EBS costs: EBS costs are based on GB-month pricing of general-purpose EBS SSD volumes for the required storage capacity over the five-year term. Platform9 Hybrid Cloud Computing Costs Platform9 Managed OpenStack hybrid cloud costs include those of the K-based private cloud and the AWS public cloud for cloud bursting. More specifically, these encompass the following: Server hardware costs: The necessary capital expenditure for server hardware for the private cloud. Storage costs: Software licensing and hardware costs for creating high-performance shared storage. Datacenter costs: Fees for data center services for the required server infrastructure, including the costs for management of colocation equipment (including network infrastructure), setting up firewalls, media and supply management, complex cable configurations, equipment testing and troubleshooting, circuit testing, and rack and stack. Platform9 software licensing costs. AWS EC2 and EBS costs for the public cloud bursting portion of the hybrid cloud. ROI Model Assumptions Now we will detail the specific configurations, cost components and dollar metrics used to perform our cost comparison between the AWS and Platform 9 solutions. AWS Public Cloud Assumptions m4.large EC2 Linux instance -.1 per Hour (US East - N. Virginia on-demand Pricing) AWS m4.large EC2 instance configuration - vcpus:threads=2:1 - vram:pram=1.5:1

5 EBS General Purpose SSD (gp2) volumes -.10 per GB-month of provisioned storage (US East - N. Virginia) Provisioned Storage: 30GB Hybrid Cloud Assumptions Server Hardware Configuration and Costs for Private Cloud Server hardware consists of SuperMicro SuperServer 2028TP-HC0R - 2U TwinPro2 units. This model supports four hot-pluggable systems (nodes) in a two-rack unit (2U) form factor, with each node supporting the following hardware: Sockets: 2 CPUs: 2x 14 Intel Xeon Processor E v4 2.40GHz RAM: 8x 16GB PC MHz DDR4 ECC RAM SSD: 2x 150GB Intel SSD DC S3520 Series 2.5 SSD SSD: 4x 800GB Intel SSD DC S-3520 Series 2.5 SSD Intel 10-Gigabit Ethernet Converged Network Adapter X520-DA2 1TB license for ScaleIO software-defined Storage The average sales price for this configuration is $12,500. Aggregate private cloud compute capacity consists of 16 of these SuperMicro SuperServers, thus providing a total of 64 nodes with the hardware described above. The EMC ScaleIO license permits creating a server-based storage area network (SAN) by combining 1 TB of each server s direct-attached storage (DAS) resources into high-performance shared block storage. Datacenter Costs for Private Cloud $60 per month per rack unit (U) AWS Costs for Cloud Bursting The AWS costs for public-cloud-only deployment (described above) are equivalent to the AWS costs for cloud bursting. Platform9 Software Licensing Costs MSRP: $4400 per server CPU socket per year. MSRP: $440 per AWS vcpu per year.

6 Cloud Computing Capacity The assumptions for computing capacity are based on typical business-critical application deployment in a mid-sized enterprise, and can be extrapolated up or down to address the needs of larger or smaller enterprises. Specifically, the ROI model assumes the following specific parameters for the required cloud computing capacity: Aggregate Number of s: 3840 s supported per dual-socket server node (having the configuration described above): 48 : AWS m4.large instance=1:1 AWS Public Cloud vs. Platform9 Hybrid Cloud ROI Analysis With our assumptions and costs in place, we are now ready to perform our comparison of the five-year ROI between the AWS public cloud and Platform9 s hybrid cloud. A summary of the analysis is shown in Table 1. As mentioned earlier, the AWS public cloud costs include EC2 and EBS costs for the total compute capacity over the five-year period. The cost of the Platform9 K/AWS option is the sum of the hybrid solution s private cloud and public cloud costs. The private cloud costs include server hardware, software-defined storage licensing, datacenter costs and Platform9 licensing. The public cloud portion s costs include EC2 and EBS costs, like the straight public cloud option, but reduced by 80% since we are assuming 80% of capacity is covered by the private cloud. Platform9 hybrid cloud scenario: 80% K-based private cloud, 20% AWS public cloud AWS Public Cloud Platform9 Hybrid Cloud AWS EC2 AWS EBS Server Hardware Datacenter Costs Platform9 Licensing AWS EC2 AWS EBS Year 1 Costs $800,000 Year 2 Costs Year 3 Costs Year 4 Costs Year 5 Costs Totals $18,164,736 $806,400 $800,000 $114,048 $6,195,200 Total Cost Savings with Platform9 % Saved $18,971,136 $10,903,475 $8,067,661 43% Table 1. Cost Comparison Between AWS Public Cloud and Platform9 K/AWS Hybrid Cloud This analysis shows that the hybrid cloud deployment based on an 80%/20% private/public split yields a cost savings of 43% over $8 million over a five-year period. As you can see, Platform9 allows businesses to reap the anticipated ROI benefits of hybrid clouds through the leveraging of AWS on an as-needed basis and scaling of workloads during traffic spikes, while mitigating the costs of high AWS subscription costs.

7 Platform9 Hybrid Cloud Case Study Summary: PubMatic Marketing Automation Software PubMatic is a leading marketing automation software company headquartered in Redwood City, California and with offices worldwide. PubMatic initially set up and managed its compute infrastructure on a public cloud. However, when its public cloud operating costs subsequently spiraled out of control, the company found that a Platform9 hybrid cloud environment met their ROI requirements. The PubMatic team initially decided to use a public cloud because it was working against the clock to launch the firm s analytics platform. However, costs quickly skyrocketed renting hundreds of instances for long timeframes led to fees that shot up from $30,000 a month to more than $400,000 a month. In addition, using the public cloud did not eliminate all of PubMatic s OpEx costs: the company still needed to employ several staffers to support resource management, network monitoring, troubleshooting and access control management. PubMatic decided to explore alternatives to a public cloud and considered a hybrid cloud strategy. PubMatic eventually settled on a hybrid cloud model largely running on the Platform9 Managed OpenStack private cloud with the public cloud for capacity spikes. This reduced its dependency on the public cloud, as well as slashing costs. The migration to a Platform9 Managed OpenStack hybrid cloud enabled PubMatic to save $6 million to $8 million of OpEx each year a total reduction in expenses of 90%. PubMatic is now able to fully support its development and QA teams without having to worry about runaway operating costs. Every organization s cloud journey is different, and there is no one-size-fits-all solution. However, the PubMatic experience shows how other companies can avoid the high costs associated with the public cloud. Conclusion Platform9 allows businesses to reap the ROI benefits of hybrid clouds by leveraging AWS on an as-needed basis during traffic spikes while mitigating high AWS subscription costs. The ROI analysis for a typical business-critical application deployment in a mid-sized enterprise shows that a Platform9 hybrid cloud delivers 43% cost savings compared to an AWS public cloud over a five-year period. The assumptions behind the ROI analysis can be extrapolated to estimate the cost savings for larger or smaller enterprises.