Finding Opportunity in the Cloud: Infrastructure-as-a-Service

In our first post in the Finding Opportunity in the Cloud series, we defined what “The Cloud” is. Now that we know what cloud is, we’ll dig into the types of cloud services.

There are three types of cloud service, each meeting the specific requirements of different types of business problems. The first type of cloud service we’ll  look at is Infrastructure-as-a-services IaaS.

With IaaS, you pay to use someone else’s servers, computers, storage, bandwidth, and physical data-center space. When you buy IaaS, you only get the infrastructure and sometimes the server operating systems (like Linux or Windows Server). There are no applications, like Microsoft Office or Salesforce, running on the servers. You must build or buy the software you want running on the infrastructure you are leasing.

Some of the biggest companies you know, like Netflix, Geico, and Coca-Cola rely on IaaS to run their businesses. Amazon alone claims to have over 1,000,000 IaaS customers.

 

Who are the vendors?

Some examples of IaaS vendors include Amazon Web Services (AWS), Microsoft Azure, Google Compute Engine, and IBM Cloud Computing. Not too long ago there were a plethora of IaaS vendors including local data-center and hosting companies. Now, most of the cloud vendors are reselling the services of either Microsoft, Amazon, or Google.

 

When does IaaS make business sense?

The companies providing IaaS services buy A LOT of servers, storage, memory, physical space, cooling, electricity, etc. Which means they get them much cheaper than you can. They also have software development teams that build tools making managing the infrastructure much easier. These tools can enable you to start a server, add or remove memory or storage to your server in real-time as usage increases or decreases, then shut the server down when you are finished. Getting access to more resources or turning resources off can be done using the management tools and you only pay for what you use when the server is running. This pay-only-for-what-you-use feature, ease of management, and ability to quickly add and remove resources are the main reasons for using IaaS. IaaS makes sense if you have a large number of servers or have development teams building custom software and don’t want your IT team to waste time building, deploying, and maintaining the servers.

 

Example Business Case: 

The servers supporting T-Mobile’s 2015 Superbowl commercial needed to scale from zero interactions before the game to potentially millions of interactions when the ad aired at halftime. Building that kind of infrastructure -and hiring the people required to build and maintain the infrastructure- would have cost tens of millions of dollars in sunk cost. T-Mobile used AWS and was able to scale up to hundreds of servers during peak usage then shut the whole thing down when the ad campaign was over.

In the next post in this series, we’ll explore the business case for Platform-as-a-Service, PaaS.