Cloud Computing

Top-Down vs. Bottom-Up Cloud Strategy: Two Ways – One Goal

Along with the steady growth of the cloud the question for appropriate cloud uses cases rises. After companies like Pinterest, Airbnb, Foursquare, Wooga, Netflix and many others have shown how cloud infrastructure and platforms can be used to create new or even disruptive business models, more and more CEOs and CIOs would like to benefit from the cloud characteristics. The issue: established companies run many legacy enterprise applications that cannot be moved into the cloud based on its existing form. For many decision makers this raises the question whether they should follow a top-down or bottom-up strategy.

Cloud Strategy: Top-Down vs. Bottom-Up

An IT strategy has the duty to support the corporate strategy at the best. Thus, in line with the increasing digitalization of society and economy the value proposition and meaning of IT significantly rises. This means that the impact of IT on the corporate strategy will become more important in the future. Assuming that cloud infrastructure, platforms and services are the technological fundament of the digital transformation, it is consequent that the cloud strategy has a direct impact on the IT strategy.

This raises the question how far cloud services are able to support the corporate strategy whether direct or indirect. It is not mandatory that this is reflecting in numbers. If a company – for instance – is able to let its employees work more flexible – based on a software-as-a-service (SaaS) solution – than it has done something for the productivity, which has a positive effect on the company. However, it is important to understand that cloud infrastructure and platforms just serve as a foundation on which companies get the capabilities to create innovation. The cloud is just a vehicle.

Two approaches can be used to get a better understanding about the impact of cloud computing on the corporate strategy:

  • Top-Down Cloud Strategy
    During the top-down approach the possibilities of cloud computing are analyzed and a concrete use case is defined. So an innovation or idea is created that is enabled based on cloud computing. On this basis the cloud strategy is created.
  • Bottom-Up Cloud Strategy
    During the bottom-up approach an existing use case is implemented regarding the possibilities of cloud computing. This means it is analyzed how the cloud can help to support the needs of the use case. Thereof the respective cloud strategy is extrapolated.

Mainly the top-down approach comes up with new business models or disruptive ideas. The development is done on the green field within the cloud and mostly belongs to innovators. The bottom-up approach follows the goal to move an existing system or application into the cloud or redevelop it there. In this case it is mostly about to keep an existing IT resource alive or in best case to optimize it.

Bottom-Up: Migration of Enterprise Applications

Existing companies prefer to follow a bottom-up strategy in order to quickly benefit from the cloud capabilities. However, the devil is in the details. Legacy or classical enterprise applications are not developed to run on a distributed infrastructure – thus a cloud infrastructure. This means that it is not natural for them to scale out and they are only able to scale up at the utmost by using e.g. several Java threads on one single system. If this system fails also the application is not available anymore. Every application that should run in the cloud thus also has to follow the characteristics of the cloud and needs to be developed for this purpose. The challenge: Companies still lack of appropriate staff with the right cloud skills. In addition, companies are intensively discussing “Data Gravity”. This is about the inertia respectively the difficulty of moving data. Either because of the size of the data volume or because of a legal condition that requires to store the data in the own environment.

Vendors have recognized the lack of knowledge as well as the “Data Gravity” and try to support the bottom-up strategy with new solutions. Based on the “NetApp Private Storage” NetApp allows companies to balance the “Data Gravity” between public cloud services and the own control level. Companies have to fulfill several governance and compliance policies and thus have to keep their data under control. One solution is to let the cloud services access the data in a hybrid cloud model without moving them. Thus in this scenario the data is not directly stored in the cloud of the provider. Instead the cloud services are accessing the data via a direct connection when processing them. NetApp enables this scenario in cooperation with Amazon Web Services. For example, Amazon EC2 instances can be used to process the data that is stored in an Equinix colocation data center – the connection is established via AWS Direct Connect.

Another challenge with not cloud ready enterprise applications in the public cloud is the data level – when the data should leave the cloud of a provider. The reason is that cloud native storage types (object storage, block storage) are not compatible with common on-premise storage communication protocols (iSCSI, NFS, CIFS). In cooperation with Amazon Web Services, NetApp Cloud ONTAP tries to find a remedy. As some kind of NAS storage the data is stored on an Amazon Elastic Block Storage (EBS) SSD. In this case Cloud ONTAP serves as a storage controller and ensures the access of not cloud ready enterprise applications to the data. Due to the compatibility to common communication protocols the data can be moved easier.

VMware vCloud Air targets at companies with existing enterprise applications. The vCloud AIR public cloud platform based on the vSphere technology and is compatible to on-premise vSphere environments. So existing workloads and virtual machines can be moved back and forth between VMware’s public cloud and a virtualized on-premise infrastructure.

ProfitBricks tries to support companies with its Live Vertical Scaling concept. In this case a single server can be vertically extended with further resources – like amount of CPU cores or RAM – without rebooting the server. Thus the performance of a running virtual server can be enhanced without making changes to the application. The best foundation for this is a LAMP stack (Linux, Apache, MySQL, PHP) since e.g. a MySQL database recognizes new resources without any adjustments and a reboot of the host system and is able to use the added performance immediately. To make this possible ProfitBricks did modifications at operating system and hypervisor (KVM) level – that are transparent for the user. The customers only have to use the provided reference operating system image that includes the Live Vertical Scaling functionality.

A random bottom-up use case of enterprise applications in the public cloud can be find at Amazon Web Services. However, this example also shows that the meaning of system integrators in the cloud is rising.

  • Amazon Web Services & Kempinski Hotels
    The hotel chain Kempinski Hotels has migrated the majority of its core applications and departments among others finance, accounting and training to the Amazon cloud infrastructure. Together with system integrator Cloudreach a VPN connection was established between the own data center in Genf and the Amazon cloud over which the 81 hotels worldwide are now provided. Furthermore, Kempinski plans to completely shut down the own data center to move 100 percent of its IT infrastructure to the public cloud.

Top-Down: Greenfield Approach

In contrast to just keep enterprise applications the Greenfield approach follows the top-down strategy. In this case an application or a business model is developed from scratch and the system is matched to the requirements and characteristics of the cloud. In this context we are talking about a cloud native application that is considering the scalability and high-availability from the beginning. The application is able to independently start additional virtual machines if more performance is necessary (scalability) respectively to shut them down when they are not needed anymore. It is the same when a virtual machine fails. In this case the application also independently takes care that another virtual machine is starting as a substitute (high-availability). Thus, the application is able to work on any virtual machine of a cloud infrastructure. One reason is that any machine can fail at any time and a substitute needs to be started. In addition, also the data that are processed by an application are not stored at a single location anymore but are stored distributed over the cloud.

Startups and innovative companies are aware of this complexity what the following uses cases display.

  • Amazon Web Services & Netflix
    Netflix is one of the lighthouse projects on the Amazon cloud. The streaming provider is using each characteristics of the cloud what is reflected by the high availability as well as the performance of the platform. As one of the pioneers on the Amazon infrastructure Netflix has developed its own tools – Netflix Simian Army – from the very beginning to master the complexity.

However, the recent past has shown that innovative business models not necessarily have to be implemented on a public cloud and that the greenfield approach not only belongs to startups.

  • T-Systems & Runtastic
    Runtastic is an apps provider for persistence, strength & toning, health & wellness as well as fitness and helps users to reach their health and fitness goals. The company has a massive growth. After 100.000 downloads in 2010 and 50 million downloads in 2013, the number of downloads reached over 110 million until today. Furthermore, Runtastic counts 50 million users worldwide. Basically the numbers speak for an ideal public cloud scenario. However, due to technical reasons Runtastic decided for T-Systems and runs its infrastructure in two data centers in a colocation IaaS hybrid model.
  • Claranet & Leica
    Last year camera manufacturer Leica has launched “Leica Fotopark”, an online photo service to manage, edit as well as print and share photos. Managed cloud provider Claranet is responsible for the development and operations of the infrastructure. “Leica Fotopark” is running on a scale out environment based on a converged infrastructure and a software defined storage. The agile operations model is based on the DevOps concept.

Greenfield vs. Enterprise Applications: The Bottom-Line

Whether a company decides for the top-down or bottom-up cloud strategy depends on its individual situation and the current state of knowledge. The fact is that both variants help to let the IT infrastructure, IT organization and the whole company become more agile and scalable. However, only a top-down approach leads to innovation and new business models. Nevertheless, one has to consider that e.g. for the development and operations of the Netflix platform an excellent understanding for cloud architectures is necessary, which is still few and far between on the current market.

Regardless of their strategy and especially with regard to the Internet of Things (IoT) and the essential Digital Infrastructure Fabric (DIF) companies should focus on a cloud infrastructure. Those offer the ideal preconditions for the backend operations of IoT solutions as well as the exchange for sensors, embedded systems and mobile applications. In addition, a few providers support with ready micro services to simplify the development and to accelerate the time to market. Furthermore, a worldwide spanning infrastructure of datacenters offers a global scalability and helps to expand to new countries quick.

By Rene Buest

Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies.

Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn.