tv [untitled] September 23, 2012 11:00pm-11:30pm PDT
adopt these technologies and do so in a way that is safe and secure? that, for me, is the challenge of cloud. >> very nice. that leaves just into gina because she grapples with these problems every day. >> let me start by saying i feel far more at ease now in this prestigious venue after hearing "help" and "stocks -- "hell and "sucks." i can speak far more clearly to you now. in very humble being with these folks because these folks are architects. architects of technology and architect of cloud computing technology in and of itself, so i am humbled to be here with these gentlemen. i can speak from a -- i am release a purveyor of the technology that they implemented.
i can speak from my role with the city and county of san francisco and how we are leveraging cloud and the benefits we are deriving from the cloud and why we made the choices therein. certainly, as tim alluded to, the choice to go to the cloud was primarily cost-driven, economically driven, no question. but also, we began to see that the city business, the city government was changing and the role of the city government was changing. the constituents in the city and county are very savvy, savvy computer users. san francisco is a gateway to silicon valley. for the constituents within the city and kept -- so the constituents demand more change, more availability, more accessibility. so while the public sector is renowned for being slow and moving slow, slow to adopt the
change and slow to implement change, the constituents of the city and county of san francisco demanded more. we had to be able to deliver services in a speedier manner and more cost effective manner, while still embracing many of the legacy systems and staff and processes throughout the city. san francisco is a very unique city in terms of we embrace history. we embrace legacy. we embrace our cable cars. we embrace our wonderful victorians that we have here, our history is very important to us, that legacy. but we also do a complete 180. we have awareness of technology. so many technological advantages started here.
we have to embrace that as a city. so why do we leverage cloud? one, obviously, from an economical position. a second, because we are able to deliver services more quickly. we have a challenge with our staffing and resources, as you mentioned, but we have to embrace that legacy staff. we cannot merely replace them, as you pointed out. we have to embrace that legacy staff and repurchased them in other areas that we can benefit the city better with those folks. so our decision to recently go to a more enterprise version of cloud computing was leveraging e-mail in the crowd -- that was a major decision. ground-breaking decision for the city and county, but one that we feel will better prepare us for the future and better enable us to implement other technologies to help move the city forward and to help lift the technical
maturity within the city. that is what we are charged to do. as an i.t. organization within the city, and to your comment earlier, it is something we face everyday, a challenge we face every day. leveraging legacy. respecting legacy, yet implementing technology to meet the needs of the business of the city and the needs of the constituents within the city. >> thank you. having a question for you or -- when you say cloud, there are multiple model ser -- models. let me simplify them. one is instead of building your own data center which companies would do 10 years ago and build your own computer room at generators and air conditioning, you use an outsourced professional data center. that is one move to the court, which is one move to the crowd. the second model, which you have actually used to set up a mass
of private club, where you can now provision servers on demand for your constituents within the city. in the context of a government with the compliance issues and security issues and mission critical services which you overlay, that is quite an achievement. so that is the second model which you have embarked on. the third model is clearly the public crown. he made a decision to move some of your data to a public cloud -- e-mail. if you talk about the decision process which led to selecting each of them, your concerns, your challenges, and the economics behind each of those models, i think it would be very beneficial. >> a cake, well, our decision to leverage services and move to echolocation a facility in the city was pretty simple. that was pretty much a cost decision as well. the decision to build a brand
new data center from the ground up versus leverage the services of a pre-fabricated co-location center, that is already outfitted with all the heating and air-conditioning and cooling facility that we need -- power, electricity. after weighing the costs of such, it was an easy choice and the most cost-effective choice to seek out the services of a co location site for the city and county primary data center. our former datacenter -- we look at ways to properly renovate and upgrade the facility there. from a cost perspective, it was not a benefit to the city, and we did not think it was a very use of the city's taxpayers funds, so we felt that it was best to research a co-location facility in the city, and we're
very pleased with our decision to go that route. because one, we did not have to -- we no longer had the responsibility of managing a facility. we could repurchase or repo august that, those efforts that we had with our staff performing those services before -- we could be purpose those folks into other areas of the organization, teaching them a new skill set. we no longer had the burden, frankly, of a facility management. we no longer had to stress our resources in any of the facility-based type of management responsibilities. so that was a clear economic choice for us. our decision to go to an enterprise mail solution was -- there were certainly a long term cost associated with that. but our decision to go to
microsoft cloud solution was based on several factors. one of which being availability, reliability, and performance of microsoft, the availability to have the actual e-mail application hosted in the cloud, took that burden off of our staffing resources. we have limited resources in the city to manage our user base. the yearly staffing costs and staffing time and resources in managing the e-mail application on side and on premise -- on- site and on premise, and our staffing provisions due to city budget cuts and deficits and reductions in force each year, we were less able to maintain
the quality of service from an e-mail support perspective. so we did not want to impinge or degrade the level of e-mail service or the quality of service we were providing the city and county, so we had to look for a solution that would allow us to maintain a quality of service, maintain the availability and reliability of e-mail in the city and county, and also to get us all on one single solution for the city and county. prior to our decision to move to the crowd, many of our agencies were under disparate e-mail systems, so we were not able to effectively communicate. all 25,000 of us were communicating in different areas in different ways, and we wanted to be more collaborative. we wanted to be able to communicate in a more uniform manner, and we felt that a single solution in the cloud was the best option for us.
>> thank you. i'm going to go to attain because cloud is often called technology. i've heard him call it a business model. he has written a very popular vote which compares all the different business models. tell us why you feel that way. >> actually, i'm going to make a comment before that. a lot of people discuss whether or not corporations are going to use the cloud. i actually did a thing -- i had to do a talk about a year-and-a- half ago to 40 of the largest company cio's on the planet. i said the list because i knew who was going to be in the room, to all of my buddies, and ask who of those were customers. so i abrogated all of the data. anybody want to guess? out of 40 of the largest companies in the world, how many of the were using one or more of
these -- there was about seven different applications, all delivered out of clout, -- cloud. that's over. best guess, not over. 38 out of 40. of the largest companies in the world. using one or more of these. when we debate the question of will corporations use the cloud, i would say they already have. we clearly are still in the early adoption days. i rattle off some very interesting stories right now of companies you know right now who are using lots of interesting computing and storage cloud services as well. i just wanted to get people to start to think. companies are moving this way. there is a bay area company -- i will not name names, but the cfo walk into the cio's office and said, "no more capital expenditure." the reason why i talk about this as a business model is -- and,
by the way, i would be happy to send any of you guys a copy of this book. or if you want epub versions, we can do that. i will not to the lecture on all seven business models, but i have tried to break down what happened in the entire software business into seven for the metal business models that are very different economically. the reason why i talk about cloud computing being in business model -- i'm going square to the story of computer and storage and say that amazon -- i will pick on brother amazon -- amazon's innovation was not technology. it was not technology. they have to use virtualization technology to enable what they are doing, but their innovation was not virtualization. for the old people in the room, ibm did this in 1972, right? their innovation was 12 cents an hour. 12 cents an hour. and transparently.
we could go right now and look it up. you can buy it for 12 cents an hour. that ability to sell you -- and they are not the only ones. other people are starting to do this. so transparent, by the way. but that innovation to give you computer for 12 cents an hour. that is a business innovation. they were economically not possible before. let me give you a simple example. some of you may not know this. a couple of years ago, and they may not want to talk about this, but 350,000 people could not file their taxes on tax day. not very good. you may not know this, but the number one day for ecards on the planet is valentine's day. by a long shot. hallmark processes more on valentine's day. this is because you do not send a valentine on february 13, and
he certainly did not send one on february 15. long gone. last interesting case for you to think about -- two years ago, super bowl sunday, doctors and dinners both men giant multimillion-dollar super bowl ad campaigns drive people to their web sites. what you do not know is one minute after the doctors at man -- multimillion-dollar advertising campaign, the website fell down. you did not want to be the i.t. guy there, right? furthermore, is widely believed that the problem that it was found on the denise site a week before. for those of you not technical in the room, i will tell you, the problem could have been solved technologically, meaning you could generated synthetically a ton of load coming from multiple sites around united states to simulate every case i just told you about. you technologically could have done that.
economically, it would have cost you an arm and leg to do this. which is why nobody did it. today, a whole host of guys are saying, would you like 10,000 computers for three days to generate a ton of synthetic load and hit all these giant websites? you could have that you only have to buy it for three days because they have delivered -- amazon among others has done this. you want to beat a student of this, it to be a student of business models. they have a concept called reserve pricing, meaning if you think you're going to use it for a year, they a little but up front, and they will take the hourly rate down. then they have a fascinating thing called spot pricing, which means that every hour, we can
all go bid on whatever excess capacity there is. each you are the high bidder, you get it. there are a lot of interesting applications for this, by the way. this innovation and business model has not stopped. they have let this thing, but it is not over. that, to me, is the holy grail. this technology is going to enable people to build business models which you have never seen an economically allow things to happen which we have never seen. is that a short answer or long? >> that was just right. thank you. >> my next question leads into that with simon. you have developed some core virtual is asian technology. you have seen it be used in private clubs, in the enterprise setting, in public clouds. how do you see customers reacting to both private and public clouds, the challenges, the opportunities? >> [inaudible] because of the scary things out
there, and because they have real humans who are scared of letting go of control. again, it is not so much a technology challenge as a human process challenge. it is really scary to let go of this thing you have been charged with looking after. it could be a regulatory environment, but it could just be that your job is built around regulate -- making this thing work. so we have a skill set issue, too. in general, they are building protocols for security reasons and a bunch of other things. in general, it is absolutely in existing i.t. people's interests to build a private club because they get to keep their jobs. so they are off doing that. but the broader concern that is articulate it is one of security and control. and the public clout is been generally branded by the enterprise segment as being untrustworthy unless it is backed by a particular promise to have some major brand like
microsoft or google or whatever. what has been lacking has been standards related to a customer of visibility to reason about the cloud. but we have some good anecdotal evidence that people will focus on a cloud for a living will do a far better job than you would ever if you were building your own i.t. system. a good way to think about this would be if you look back on wikileaks and what followed, it turned out they were hosting on amazon, and when amazon pulled that, anonymous launched an attack on a bunch of different web sites. everybody who was running their own data center was down in a heartbeat. so statement one -- if you are running your own thing, you will be taken out much more easily than if you are running as part of a much larger aggregated whole world that provider can defend the property much more
rigorously. and goodness me, they care about defending it. but more importantly, through automation, you get to get an assurance that data is less accessible. so people will say to me that if they build a private cloud and surround it with people, they are much more secure. that is patently false because people tripped over cables and things fail. but people also have usb cheese and walk off with your data, and this is highly known. again, the data should never have been there and the guy should not have been able to download it. that is a human problem. a failure human systems. there is alerting and people not looking at a human log. humans are bound to make mistakes. when we leave it to humans, humans are inclined to believe -- inclined to seek fun. when we look at the security angle, security designers always
believe that users are prepared to trade security for functionality or just for fun. you know what -- i tell you what -- if you get a user advancing -- if you give a user a dancing paper or something like that, they will click on it every time. problem is we are gullible and render our enterprises are vulnerable to attack. human nature of most of the attacks are actual so's your engineering. so, again, the challenge is the your private cloud might be well-fortified. in general, attacks come in to the data center generally on the basis of compromise clients. so in the google attack, for example, someone click on a poisonous explores six url -- a poisonous internet explorer 6 url.
the next set beyond getting out of the infrastructure business is to get into the business of trusting a vendor who already owns the facilities and builds servers and is reinstalled with everything to make them automated. let's call that a host of private club. the model talk about some dances called hybrid club. we already have this setup, and we have a hybrid club were some of it is run by somebody else, and that is there clearly were the enterprise is aiming for next. in general, the enterprise has to adopt the cloud. the moment you want to access an application running outside your parameter, it is not clear what the users identity is. enterprise is exploding both at the front and the back. i mean we all want to sit in starbucks and work, so the enterprise network is no longer there. we're all accessing stuff over the public internet.
and then at the back, the enterprises adopting these clouds services, whether it be private computing for the challenge is at the back, the enterprise has a vested interest based on identity. so i, sitting in starbucks, want to go to -- was just a salesforce that, -- let's just say salesforce.com. whose identity am i doing that under? the whole problem is that security is tighter i'd be. the moment you step out of the enterprise boundary, the identity is up for grabs. so extending the enterprise boundary, extending security, extending the enterprise into the cloud is a major challenge. they have to extend not only identity management, but also all the requirements for security and clients and those sorts of things. so the adoption of various cloud services notwithstanding, it is
growing at pace. there are major changes still technologically to get it done. so the enterprise use public clouds as untrustworthy, and reliable, and scary, and yet, every single enterprise employee uses it. on the enterprise client, and all their own. and of 40 walks in with their own network nowadays, and the process enterprise data on the rise, and they probably -- it probably drag it into something like dropbox. tim mentioned an interesting statistic of how many people said they were using cloud. the only thing that is interesting is cio's who do not know that they are using every form a cloud that is available. this is the charge again. if the employee wants to be productive, a well-intended employee wants to be productive, just to send an e- mail to a colleague, and bounces off, so they drag it in dropbox and send it publicly, and
suddenly all your data is in the cloud whether you like it or not, and the cio has no clue. the consumerization challenge is the challenge for adoption of the cloud. broadly, from an automation perspective, it is the case that for the omission build you a much more reliable concept. i happen to be a passionate fan of the models being built because their entire business depends on doing a good job. so you can bet they will have far more highly incentivize people, but fewer people, and lots more software. so i appreciate that perspective. as a practical reality, we see customers come to us every day. >> one of the very nice things is you can move consumption from this model to a consumption model, which is really important here that is a key change.
that you no longer have to buy stuff and stand it up and pay for software licenses. you can simply read them. that is a phenomenal change because you're the consumption- based. >> which has been my final question to all three panelists, which is where of the future of cloud computing going? will this be an instant gratification engine where, as you mentioned, the power of the internet is at the hands of a particular individual, or is this a way of life? >> i think it is a way of life. we are on the second year of the 20-year wave. i think 20 years is conservative. i think this is what we are moving to really as an information technology initiative. this is what the future holds now for us. i believe that the time of infrastructure management and procurement of infrastructure, that time is surely waning.
it is waiting today. if you look at some of the budget models and some of the forecasts of some of the perennial infrastructure companies. they will all tell you that sales of their pc's and servers have decreased significantly just within this two-year time, so if we are making this type of progress and growth just in the past two or three years, what happens year 5? what happens year 10? i think to your earlier point, many of the common, everyday services and tasks we do every day will become -- will all be in the cloud. so much of it is today already, but i think much more. i think one thing that will continue -- it will actually reach into the home more than it already has. i think that is where the next advent of this will be. it is already pervasive in business. i think it will in some way --
into the home -- reach into the home, to the consumer, touch the consumer within their home. >> i predict that employees will be bringing their own devices. just as you bring a 10 in to write, you'll bring in your voice, and it will be an expectation that employers will stop writing enterprise devices in the not too distant future, simply because there is no reason for them to do that. then, from the adoption of cloud computing perspective, for sure, it is growing fast. it is growing incredibly fast. there are a couple of things i can say with absolute confidence. there will be more lines of cobol by the time we leave this room than when we stepped into it. [laughter] legacy businesses are great businesses, and they live for a long time. they live as a factor of human time, not as a matter of technology. technology can do the coolest stuff on the planet.
is what humans do with technology that matters. so there will be more windows.net programs and all of that. the legacy will remain. what is driving public cloud today is predominantly consumer experience. that is growing incredibly fast. of course, we are all getting new devices all the time. a fundamental change as these new devices, and is instead of having to maintain their own copy of windows the way they always used to, at&t is doing that for them now. it is brilliant. that is why they get out of owning it. because they do not have to service that thing on the device. consumerization is really helping i.t. and i think can really help move the whole computing experience forward, while preserving a way for people to access legacy applications that can be cloud- ified as well. >> i'm going to go right turn on the spirit let me start with
something for you to think about. 80% of the u.s. economy is a service economy, right? we do not manufacture anything. we do not grow anything. we are a service economy. you probably heard this. probably every one of you in this room is in the service economy. you probably are not growing or manufacturing anything. the question i would put in front of you is what the hell is a service business? what is a service economy? right? is it answering the phone nicely? is that a service business? is it flipping burgers burgersin-n0out? i get to say that around here, right? i would contend you that a service business is a business which delivers information that is personal and relevant to you. information that is personal and relevant to you. whether that means i go down to mark hopkins or wherever and talk to the concierge, and i really would like to find a cheap chinese restaurant that i can walk to that is less than