Server virtualization in MicroLink

Last week I did a presentation on a Microsoft, HP and Intel seminar about how server virtualization is done in MicroLink. I had the honour of presenting the practical experience of virtualization. For me it was a good opportunity to talk to our specialists and compose a few statements about virtualization in practice. So here is our experience:
- Virtualization is good, the technology is working OK.

- The only reason not to use virtualization is licensing. Disk I/O is no longer an issue, but licensing is. For example you cannot use Oracle CPU licenses (too expensive) or Microsoft OLP licenses in a shared virtualization platform.

- As with all Enterprise IT system there are a number of technical nuances when using a "private cloud" solution. Some drivers might not work with virtualization etc. It is better not to discover all these problems yourself but to use the experience of people who have done it before. This way you can save a lot of time and many downtimes.

- Amazon should lower their data transfer rates, otherwise they will not be cheaper than IT hosters virtualization platforms, like for example our MicroLink-s V-Server.

Will Google start charging for its services?

Have you noticed how much we are using Google's services daily? The search, the maps, Gmail, Youtube, Picasa, the books and tens of others. For years now the services have been free, but have you wondered why is that so? Why does a company offer these really expensive services for free? At least for me this sounds strange. I mean Google is a company whose shares are listed on the stockmarket and doing charity is not something a shareholder expects. It is net profit and dividends that are expected by the investors. And Google is no exception.

So what is their strategy? Are they just wasting money or are they just promoting internet services as a charity? Well, this probably is not their plan. They are probably up to something a bit bigger and more serious.
Firstly they still have this really big positive cashflow from the advertising business. Secondly they have an organization of really talented people. These two give an exceptional possibility to build services that do change the world .... and for what the world will later be happy to pay for. To put this more straightforward - Google invests billions of dollars in a service like the maps: they buy the maps, they photograph all the cities in the world, they buy the best satellite photos, they build a huge server farm and a really good interface for the service and they give it away for free. And then a few years later when everybody has become really addicted to their service and there is no way somebody else is able to build a competing offer they start charging a small premium for the service. Something like a dollar or five per month for example. But by then you have hundreds of millions of users and this dollar per users sums up to a hundred million dollars per month.

To gather your opinion I have configured a poll on my (free Blogspot) blog. What do you think, will Google start charging for its services? If yes then when will we start paying the "Youtube, books and search tax"? :-) Please choose the option you think is the right one on the upper right corner of the page.

To give some background here are Google's numbers for the 4th quarter 2009:
- Revenue $6,67 billion
- Net income $1,67 billion
- Number of employees 19 835

Openly about Amazon's cloud

(This article in Estonian.)

One of the biggest Estonian software houses - Webmedia - hold an event last Friday where they launched their new application management service on Amazon EC2 cloud computing platform. I would like to thank the host of the event Tiit Anmann that he invited us from MicroLink also to the event allthough our hosting service is competing with the Webmedia AM service.

In MicroLink we analyzed Amazon cloud services more thoroughly in Autumn 2009 and it was an interesting project. Maybe the most important thing we discovered was that Amazon EC2 and S3 are not competing with MicroLink's IT services but are quite suitable for being used as a resource for our hosting service. As you know a hosting service consists of the following components:
- Data Center
- Network infrastructure
- Storage and Backup
- Hardware
- System level software (operating system, databases, application servers etc.) plus licenses.
- Work: Installation, migration, support, customer support.

Of these components the datacenter, network, storage, backup, hardware and operating system licenses can be either bought by ourself as in the traditional model or be delivered on Amazon platform. So literally speaking now we have an option between buying hardware from Sun, HP or others or use Amazon. The most important part of our service - the high-level IT specialist and customer support - is needed with both options.

Here are the results of our analysis:

Benefits of Amazon EC2 and S3:

- Servers can be started by the system administrator alone and fast. (No need for delivery and physical installation). The same possibilities are currently with our virtual server clusters.
- The service is developed fast and its level is technically high. The VPN, load-balancing and monitoring possibilities are already technically higher level than those of minor and mid-size hosting companies.
- Historically prices have decreased (fast). For example the introduction of reserved instances and the 50% reduction of Windows authenticated license servers in september.
- If the service is down or there is a security incident it is "world news".
- The service has been working well while we have used it for the last 9 months.
- Amazon seems to react to security problems and fix security holes fast.
- The virtual machine images (AMI-s) are OK. There are a number of them for many different operatingsystems.
- Copying of data to EC2 volume works. EC2 volume does not disappear and can be attached to another virtual server.
- Virtual servers are like ordinary servers - we have not yet discovered any problems with any software that has worked on an ordinary server and has not worked on Amazon.
- The computing capacity can be dynamically increased and decreased fast.
- There are a lot of useful software services like billing, e-shop etc.

Minuses of Amazon:
- The data is situated "in the cloud". There is no personal touch or agreement.
- Sending e-mail from Amazon servers is problematic because due to spammers the whole network is in spam black-lists.
- Firewall configuration is simplistic and based on security groups. Groups can be chosen only during startup of the instance and not while it is working.
- Whole action is under one account. So all the systemadministrators must work with the same password and the whole infrastructure is tied to the same credit card. There are not many possibilities to rights management.
- Automatic termination of servers (to save money) seems risky and not worth the money saved. Tools for that must be purchased from third parties.
- If an instance is terminated it dissapears with the data. This is partly a problem of terminology, but might seem surprising for system administrators new to Amazon. And you can be sure this is not a nice surprise. This is also a threat if the operating system hungs.
- Specialists must learn new skills to use the environment.
- Sometimes networking is a problem. The servers are in Ireland and network latency there is 45ms from Estonia.
- Some analytics think that cloud-computing as a business has not yet proven itself and here might be a threat that Amazon closes the service or highers the prices.
- Backup solution must be done differently.
- It is not possible to perform a National security audit (ISKE in Estonia)
- Microsoft license rent model (SPLA) does not support Amazon currently. This is even worse with Oracle.

Price

- Pricing is based on usage, which is good
- All things cost little, but they cost. So the monthly bill can easily grow big. You might forget your server running or start a data copying process. All this will reflect in your monthly bill.
- Keeping costs under control is something that needs an effort.
- Prices are relatively cheap.

Experiences:
- Network access between two Amazon servers must be opened separately.
- After creating an instance it is not possible to change its security group. You must configure this correctly in the beginning.
- Shutting down a server means its dissappearance. If you have not made a bundle of it - it is dissappeared. The server survives a restart, but when the server crashes you must restore it with the help of Amazon support. So here is a risk.
- As the server is like a physical server it is possible to install monitoring agents on it. If you plan to save money by switching the server off for night-time you must take this into account when configuring the monitoring.

MicroLink is looking for training and consulting partners focusing on service industry!

MicroLink's promoter index service has met quite significant success this year in Estonia! All the major banks, retailers, insurance companies, caffees and many, many other companies are using our service.

Now we are looking for a possibility to expand to foreign markets and bring the easy, useful and smart approach to developing a good service to other countries. For that we have developed a following partnermodel:
- MicroLink provides the technology, IT service and helps to do marketing activities.
- Partner, preferrably a trainer or management consultant, talks to customers, helps to promote the idea.
The revenue is shared:
- Partner gets the fee for training and consulting.
- MicroLink gets the 30 eurocents for each response the customer gets.
This model is most certainly negotiable and we are really flexible in developing it!

If you would be interested in becoming our partner then let me know! If you are a trainer or a consultant and your customers have cut their training budgets then this is one way to offer them something new and really useful. We also have a number of international customers who might become your sales-leads.

The promoter index service interface is currently in English, Russian and Estonian. Feedback however can be asked also in Finnish, Latvian and Lithuanian.