Episode #2: Cloud Computing

Computers now have primary control of critical vehicle functions.

Welcome to the IBM Keep It Simple Technology Podcast, where each episode we discuss technology, but in a simple way. We keep the explanations simple, but what we spend our time on is emphasizing what this technology means to you and how you can best utilize this technology for you and your business. Your host, as always, Thomas Anglero.

Welcome to the Keep It Simple Technology Talk Show. Uh, once again on this episode of the talk show, we have the brother from another mother, uh, CTO of IBM in Norway. Ladies and gentlemen, Luke Fredenberg. Luke, say hello to everybody.

Hi everybody.

You got to work on your hi's. Are you married? Are you still married?

I'm still married, yes.

Did she accept those hi's? Yes. All right, I gotta talk to her after this talk show. Uh, and this is, and I am Thomas Anglero, Director of Innovation for IBM. Um, on this episode of our talk show Luke, I want to focus on, you know, let's look at the facts. Today is Thursday, March 19th, 2020, and people are still working from home and they'll probably be working from home for some time. And one of the things that I keep hearing from a lot of leaders around is that, what the hell is this cloud computing thing, right? So I thought on this Keep It Simple technology talk show, it would be perfect for us to really break down and keep it to some simplicity in what is cloud computing, where did it come from, what is it, how does it benefit me, and why should I even care, right? And if we could cover all those things, I think this is gonna be great for everybody so that when everybody gets back to work, everybody will be more informed. Sounds like a good plan.

Yeah, that's fine.

Fantastic. Then let's, let's go back to the very beginning. Let's, well, let me ask you, Luke, um, What is your definition of cloud computing?

I would say it's just another way of consuming— that's a difficult word— but using IT services. So instead of having those services in your own data center or in your own house or place, you actually rent service, IT-based services, from somebody else. And usually it's then, it's internet enabled, so you can do this from your web browser and get access to compute, as we call it, so servers that are running your programs. You can get access to data storage, so data, and you can get access to solutions, applications, services that that give you functionality that you need to process the data that you have.

Let's break all that stuff down because that's technically correct, but now let's keep it even more simple, right? So let's, let's really break all that down. This is what most people hear. So in, in the very lame— layman, not lame, but layman's terminology, what is cloud computing? That's nothing but another computer server, correct?

Yeah, it's, it's basically you get access to a server which you haven't bought yourself. You're using somebody else's server and are just paying by the hour, basically as a service. So as a service, AAS, is something that usually is very much connected to concept of cloud computing.

Right. So let's, let's, let's start drawing pictures in people's heads. Initially, everybody had, um, let's talk about when I said people, uh, companies, they all had their own infrastructure. They had their own PCs and servers, right? And they had it in their closet or their computer room, or if they were a bigger company, they pretty much had it in their basement, right? Yep. That's where we all started. And so That is what the way IT was hosted. It was hosted locally. That's called locally hosted IT. Yeah. But in the cloud computing world, all that really means is if that's Company A we just described, they have this stuff locally. Company B doesn't have the funds or they don't want, or they maybe don't even have a basement and they don't want to build their own infrastructure. But Company A has extra computer space in the basement. So Company B can say, hey, can, can I rent or utilize your computers instead of me buying my own? And that is a form of cloud computing, is it not?

Yeah, as long as you then reuse the infrastructure that Company A already has. If Company B says, I want to rent space and then put in my own infrastructure in your data center or in your basement, then that's usually a form of outsourcing or outtasking, or you rent space. But in essence, it's still the same thing. So it's early cloud computing if you reuse the servers from Company A and pay by the hour or pay by day or something like that, or even pay by the number of compute cycles or the amount of data that you use on on those servers.

Exactly. And then thank you for that clarification, because that's really, really important. It's only cloud computing when you are utilizing somebody else's existing services. That's, that's really important. So in a very simplest description, cloud computing is just using a server. And on that server is services that you don't own, but that you're renting from someone else. That is probably the basic, the simplest description of what cloud computing is.

And one of the most important, I think, side effects of this business model is that you only pay for what you use.

Exactly.

Rather than paying for the infrastructure and then only utilize it 10 or 15% of the time.

And let's spend a little time with that because that's really important. So you, um, your company, and I think it is smart and, and, and the trend today and the reason why cloud computing is talked about all the time is because it is expensive to buy a new data warehouse infrastructure in your basement from scratch. I mean, that's really capital intensive, right?

Mm-hmm.

It's a lot cheaper to rent, um, somebody else's server and pay on usage. Exactly what you were talking about. So let's break down what does it mean to pay on usage and compare it to the traditional way. The traditional way, you gotta buy, well, first of all, you have to have a space. That space has to have proper electricity going into that. So whether you're using the server or not, you're paying that electric bill to keep that thing on. And most likely you also have to air condition that space and keep it extremely cold. And that's whether or not anybody, let's say, visits your website, you have this running cost that's really expensive. In the cloud computing world, you're renting or you're buying access to somebody else's server. And if no one ever goes to your website and the computer's asleep, basically because nothing's happening, there is no cost, correct?

Correct.

Okay.

Yeah. The only thing you could say is when you actually use the server in that data center owned by Company A, you're only paying a, a part of that investment of storage or data center cooling and all that stuff, the infrastructure you need to, to keep the data center running. You're only paying a bite size of that, which is correlated with the amount of usage that you have. So if you only use it for 10 hours, you only pay for 10 hours of cooling for that single server rather than paying for the whole cooling of the whole data center for those 10 hours.

Exactly. And when we're talking about paying for it, right, let's, let's get to your wonderful example of 10 hours. When we're talking about paying for it for 10 hours, it could be incredibly low, low, low prices. We're talking about a few cents per, per CPU cycle. There's, there's all these different agreements, but the cost are incredibly low. Let's give credit to where credit is due. Even though the concept of putting a server in somebody else's premise of property has been around for decades, in the era of cloud computing, Amazon definitely is the king. I mean, they really evangelized the whole movement. So let's give credit to them. But now there's— excuse me— there's all many different providers. IBM is there, one of the leaders as well. You have Google, you have Microsoft, all these wonderful players who do it differently. But the, the trick is that the cost, because you have all these big players who set up all this infrastructure all over the world, and there's small players as well, you're only paying for what you use. And Amazon and all these competitors driven the price down because they're so competitive that it is incredibly cheap to only pay for 10 hours of usage versus that whole capital cost payment, right?

And there's one more advantage of, as a, as Company B investing in cloud computing, and that's getting access to the innovation that is embedded in the cloud computing platforms of the vendors that are supplying these services to the marketplace. Again, if you have Company A, they do a large investment, build a data center, buy infrastructure and they write that infrastructure off in 3, 4, 5 years' time. So in that period, you are using that investment and you don't do any updates or innovations on that infrastructure because you've made that investment upfront and you want to get payback for that investment. When you, when you do cloud computing, these vendors like IBM, like Google, Amazon, the others, Microsoft, they all innovate those platforms all the time because of the competition they have with each other. So when you as Company B access cloud computing from these vendors, you are basically also accessing that innovation that is ongoing all the time rather than being stuck with an infrastructure that you paid for and need to use for 4 or 5 years to get payback. All that investment.

Excellent. And let's, let's break that down and keep it simple, because what you're saying is, again, fantastic, Luke. And that is that when— let's use IBM as an example. When you use IBM's cloud computing platform— and interrupt me if I'm wrong— if you use IBM's cloud computing platform, IBM's platform, if you did it yourself, you just you know, you have a server, you have a hard drive, and you happy it's up and running with an internet connection and IP address. Yay. But if you use IBM's cloud computing platform, IBM has invested billions. All the technology is in there. So the server sitting next to your server could be an IoT server with all of IBM's services, APIs, all available to you right next to your server. And so if you want to access that innovation, that technology, those capabilities is already there. You don't have to license it. You don't have to get into a contractual agreement. You, we still have to license the service and stuff like that, but you don't have to install it from scratch. You don't have to be in a basement putting in the DVD like the old days and try to install this stuff yourself. All this stuff is available to you and usually through a very simple interface where you just sort of check off the boxes of the different services you need. That are already built on this cloud computing platform. So you're not only lowering your costs from an infrastructure point of view, but in terms of the access to innovation that you have by checking off a box, it's some orders of magnitude faster, greater for your company. Am I right, Luc?

Yeah, that's quite correct. And obviously there's innovation going on on the infrastructure side, there's innovation going on on the network side. There's innovation going on on the middleware side, the innovation going on on the service side, so the functional services on how you store your data, all those services that are available. And I think that we are up in 170, 180 different services on the IBM Cloud now. And they are— we get new services all the time, but also the services themselves are updated and innovated. All the time as well. So when you access that service, you know that you get the latest and greatest of, let's say, API Management or API Connect, or you get the latest and greatest in security or how you store your data on storage, etc., etc. So there's loads of different services and they are updated and maintained separately so they keep up to date and are innovated all the time.

And you nailed it again. And I think this is a point worthy of repeating and is really, really important because this is one of the biggest benefits to reason why cloud computing— everybody is going cloud computing and why you're going cloud computing. And that is because when you put, when you put your service or your company accessing somebody else's cloud like IBM, Microsoft, Google, Amazon, whatever, you're accessing their innovation. It's there and is available to you and your company. Quickly. I mean, like right now you have access to this company's decades of innovation. There are billions and billions of dollars of investment immediately versus the existing model where a lot of companies just have their stuff in their basement and they're gonna innovate from that. They can't click, check off a box and have innovation. You can when you're on somebody's cloud. And I think that's one of the biggest benefits to cloud computing and why it's not just hype. It actually is the key to quick innovation. And let's say you choose an innovative service that maybe doesn't generate you money because you're on a cloud computing platform. You say, hey, we tried that, it didn't work, but there's all these other services you could try. Boom, right? Learn, learn, learn fast, fail fast, and move on to something else, right?

And one of the great things is that you get this access to innovation, access to all these Fantastic technologies, irrespective if you are a big company that used to have that access because they had lots of money to buy their own data centers and have large teams doing the innovation for them. But now with this cloud computing concept, and you are only paying for what you use, small and medium-sized businesses— and actually it's a, it's a large driver for startups because they get access to all this great technology off the bat and very, for a very low entry fee. So it's in, in most cases, in basically all the cloud providers already have access to their cloud services for free, so-called freemium way of accessing, being able basically to, to try and buy, uh, to test out services, maybe even create a small solution, and then when you are satisfied with it, you can scale it up, you can start paying for it for the usage, etc., etc. So it means that it also sparks industry innovation, it sparks new companies being established.

Exactly.

Access to great amount of technologies that, that were not, uh, available before. 10 years ago.

Exactly. And one point I wanna hit on now, and you led perfectly to it before we end this episode, is let's look at this scenario and you're gonna see where exactly where I'm leading you to. Someone's listening to this episode and they're an existing company. They go, yo, these two guys are great. They're not only handsome, but they're also really smart. Okay. Gave us a pat on our backs and And, and this person belongs to a company, like you were saying a moment ago, like 10 years ago, they have a company that's invested, made a hardware investment from 20, 30 years ago. So they have an existing basement or infrastructure and they're going, does this mean that I have to move all my data and my stuff to the cloud? And that investment that I've made, I'm not going to utilize it. What's the cost of that? We're not talking about that, right? So this is leading to the discussion about private clouds, public cloud, hybrid cloud, right? And I think these three terms— and remember, this is the Keep It Simple Technology Talk Show. We want to simplify that so people understand when they hear, you know, about cloud computing, what are these different clouds? And this example of an existing company who has all these servers somewhere, you know, but they want to try cloud computing. I want to make sure that they're not intimidated. So what recommendation would you give to me, the CEO? I have my existing infrastructure, but I want to innovate. I want to try some of these new services. What are my options, Luke?

So, so always, I think the, the, the move to cloud, which, or the journey to cloud as we call it in IBM, it only makes sense if it makes business sense for you as a company. So when you have made a recent investment in your own data center, in technology, in hardware, for example, then obviously you want to stick with that investment and get the payback for that investment. At the same time, you want to get access to the innovation. You want to build new solutions, maybe in a different way, what we call cloud native. With microservices, which is a term of basically creating very small pieces of function that can be put together and become an application or a system. You can do both, and we— you can connect them to each other. So when you have—

hold on a second, before you confuse everything, hold on, Luke, because I know where you're going. So what you just told me in simpler, simpler terms is I can keep my existing infrastructure my existing investment, I don't have to shut anything off. And I could connect it to a cloud computing provider, correct?

Yep.

And they could work together in symbiosis, right? And in harmony and complement each other, correct?

Yes. And at the same time, when it makes sense for you, you can start moving workloads that you have in your own data center and move them over to the cloud when it's technology technological possible, when it makes sense from a business perspective for you, etc., etc. So you can basically define yourself when you want to be in your own data center, when it makes sense to keep, for example, because of regulation, you don't want to move your data out of your data center or something like that. But at the same time, you can other workloads, you can say, well, it's much better served running them on the cloud, because then we can start innovating faster with those solutions. So it's a decision that you can make yourself and not know one size fits all. So it's different from company to company.

Exactly.

That's why we in IBM subscribe to the idea of a hybrid multi-cloud, where you can do on-premise, your own data center, combined with private clouds and combined with public cloud. At the same time, you should be able to choose from which vendor you want to buy what services and basically decide that over time. So you can change your mind, you can buy service from IBM one year and then move to Google the next year and back again when it makes business sense for you. And we have created an architecture that allows you to do that.

Okay, let's break down what you said, because it's really important that people understand all the nuances, because once they understand that picture, then they'll get where all the great benefits is. So let's break down the word private cloud. What is a private cloud?

A private cloud is basically running a platform technology platform, more or less as a service, you can do it as a service, you can also implement it yourself. But you have all the, all the platform and middleware technologies available to you running in your own data center. So you can get all the innovation and the flexibility that you can get from the cloud, but you can also implement that in your own data center.

So the private cloud is my own private data center, right?

And, and you get access to the cloud technologies, but it's in your data center and it's only you that are using it. That's why it's called private and not public.

Exactly. And the public cloud is everybody else is sharing those same resources and innovation, correct?

Correct.

And an example of the public cloud is like what you were saying a moment ago, the IBMs, the Amazon, the Googles, the Microsoft, correct?

Yeah.

Okay. And then what is the hybrid cloud?

A hybrid cloud is basically a combination of both where you integrate both legacy, so i.e. Your own data center.

The one I have in my basement that I've been spending a fortune on for 30 years, correct, right?

Then maybe you have some area in the data center that you have created, where you have created a setup, a private cloud, and you want to connect that with a public cloud setup, a service that you're using from or developing on a public cloud in Microsoft, but at the same time You want to use Office 365 from Microsoft and you want to use Salesforce as a service. So you can combine different types of services in a hybrid setting.

Fantastic. Now let me paint a picture in everybody's head before we end this wonderful episode. I am the CEO of that company, right? 30-year investment in the basement. I buy a new server and then that new server is dedicated— is it going to be my new private cloud? So it's sitting there in the basement next to all my old equipment., and I have it, and it's my dedicated server, and it has services and everything like it's in the cloud. So I've set up a brand new cloud, private cloud, right next to my other servers. But then I'm gonna connect that box in my old basement to one of these cloud computing providers, or maybe multiples of those cloud. I'm gonna connect it to Google and Microsoft and IBM all at the same time, cuz I wanna access all their innovations. So in that example, we have my private cloud, which is my new server I just set up in my old basement, connected to the public cloud, which is all the different providers. And because I've connected both of them together, I've also made a hybrid cloud, correct?

Hybrid. And what we make the decision between hybrid and multi— hybrid is basically where do you run your application or your data, and multi means basically who is running it for you. Is it Microsoft? Is it IBM? Is it Google?

Exactly. So in actuality, none of this is really— it's a bit confusing, but I hope we explained it in a simple way that you understand at the lowest level, we're just talking about servers that are placed different places around the world, hosted by different wonderful providers who give you access to their innovation. And by accessing their innovation, you're able to benefit your company increase your innovation time to market. And also, when things get over, come back to normal from these difficult times we're in now, all these providers, especially IBM, are there really to help your company to get back on your feet and excel into the future. Any last words you want to say to the wonderful audience, Luc?

Oh, I think if you look at what we are experiencing now in this corona age, The fact that we're all working from home basically shows the value of cloud computing because cloud computing makes it possible for us to sit at home and do the same stuff as what we were doing at our office.

Exactly. Ladies and gentlemen, thank you for your time. Once again, if you want to reach out to us, you could contact Luc Vredenburg, is his last name. He is the Flying Dutchman. He looks like me and doesn't look like me, but that's an inside And my name is Thomas Anglero, and we are so happy that you spent the time with us. We look forward to hopefully enlighten you in the next episode. And until then, stay safe, stay healthy, and all love. Take care. Speak to you again later, Luke. Take care.

Bye-bye.