JOE WEINMAN is Senior Vice President, Cloud Services and Strategy, Telx, and a former executive at HP, AT&T, and Bell Labs. He is the founder of Cloudonomics and the Cloudonomics® blog. He is a frequent global keynote speaker, a prolific inventor awarded fifteen patents, and a guest contributor syndicated to a variety of print and online publications, such as Bloomberg Businessweek, Forbes, CNNMoney, InformationWeek, and GigaOm.com. He has been interviewed frequently in the press and on global broadcast television.

• Preface xvAcknowledgments xxiChapter 1 A Cloudy Forecast 1Clouds Everywhere 2Cashing In on the Cloud 6Beyond Business 8Clarifying the Cloud 11Farther On 12Summary 13Notes 13Chapter 2 Does the Cloud Matter? 17Productivity Paradox 19Competitiveness Confrontation 21Summary 26Notes 26Chapter 3 Cloud Strategy 29Insanity or Inevitability? 30Democratization of IT 31Industrialization of IT 32Strategy 33The Cloud: More than IT 35The Networked Organization 38Form Follows Function, IT Follows Form 41Aligning Cloud with Strategy 42Everyware, Anywhere 42Summary 44Notes 44Chapter 4 Challenging Convention 49What Is the Cloud? 50Economies of Scale 50Competitive Advantage and Customer Value 52Cloud Ecosystem Dynamics 55IT Spend 58Issues with the Cloud 59Summary 61Notes 61Chapter 5 What Is a Cloud? 63Defining the Cloud 64On-Demand Resources 66Utility Pricing 67Common Infrastructure 68Location Independence 69Online Accessibility 70Difference from Traditional Purchase and Ownership 70Cloud Criteria and Implications 72Is the Cloud New or a New Buzzword? 73Summary 75Notes 76Chapter 6 Strategy and Value 77Access to Competencies 77Availability 79Capacity 79Comparative Advantage and Core versus Context 80Unit Cost 80Delivered Cost 80Total Solution Cost 82Opportunity Cost and Cost Avoidance 83Agility 83Time Compression 84Margin Expansion 85Customer and User Experience and Loyalty 86Employee Satisfaction 87Revenue Growth 87Community and Sustainability 87Risk Reduction 88Competitive Vitality and Survival 88Summary 89Notes 89Chapter 7 When—and When Not—to Use the Cloud 91Use Cases for the Cloud 91Inappropriate Cloud Use Cases 101Summary 104Notes 104Chapter 8 Demand Dilemma 107A Diversity of Demands 108Examples of Variability 109Chase Demand or Shape It? 120Summary 121Notes 122Chapter 9 Capacity Conundrum 125Service Quality Impacts 126Fixed Capacity versus Variable Demand 127Splitting the Difference 129Better Safe than Sorry 131Capacity Inertia 134Summary 135Notes 135Chapter 10 Significance of Scale 137Is the Cloud Like Electricity? 139Distributed Power Generation 140Is the Cloud Like Rental Cars? 141Capital Expenditures versus Operating Expenses 143Benchmark Data 145Cost Factors 147Benchmarking the Leaders 150Size Matters 151Summary 155Notes 155Chapter 11 More Is Less 159Is the Cloud Less Expensive? 159Characterizing Relative Costs and Workload Variability 161When Clouds Cost Less or the Same 163If Clouds Are More Expensive 164Beauty of Hybrids 164Cost of the Network 167Summary 169Notes 170Chapter 12 Hybrids 171Users, Enterprise, and Cloud 172Hybrid Architecture Implementations 174Summary 180Notes 180Chapter 13 Fallibility of Forecasting 181Even Stranger than Strange 182Demand for Products and Services 183System Dynamics 185Whips and Chains 186Exogenous Uncertainty 186Behavioral Cloudonomics of Forecasting 187Summary 190Notes 191Chapter 14 Money Value of Time 193Demand and Resource Functions 193Cost of Excess Capacity 195Cost of Insufficient Capacity 196Asymmetric Penalty Functions, Perfect Capacity, and On Demand 197Flat Demand 197Uniformly Distributed Demand 197Better Never than Late 199MAD about Being Normal 200Triangular Distributions 201Linear Growth 201Exponential Growth 202Random Walks 204Variable Penalty Functions 206Summary 207Notes 208Chapter 15 Peak Performance 209Relationships between Demands 210Lessons from Rolling Dice 212Coefficient of Variation and Other Statistics 215Statistical Effects in Independent Demand Aggregation 216Significance of 1/√m 218Issues with Perfectly Correlated Demand 220Community Clouds 220Simultaneous Peaks 221Peak of the Sum Is Never Greater than the Sum of the Peaks 222Utilization Improvements 224Summary 225Notes 226Chapter 16 Million-Dollar Microsecond 227On Time 228Rapidity Drives Revenue 230Built for Speed 232Summary 233Notes 233Chapter 17 Parallel Universe 235Limits to Speedup 236Amdahl versus Google 237Free Time 240Summary 243Notes 243Chapter 18 Shortcuts to Success 245Rapid Transit 246Sending Letters 247Short on Time 249Bandwidth Isn’t Enough 252Summary 253Notes 253Chapter 19 Location, Location, Location 255Latency and Distance 255Circle Covering and Circle Packing 257Inverse Square Root Law 258Spherical Caps and the Tammes Problem 260Summary 263Notes 263Chapter 20 Dispersion Dilemma 265Strategies for Response Time Reduction 266Consolidation versus Dispersion 268Trade-offs between Consolidation and Dispersion 269Benefits of Consolidation 270Benefits of Dispersion 271The Network Is the Computer 272Summary 274Notes 274Chapter 21 Platform and Software Services 277Infrastructure as a Service Benefit 279Paying on Actuals versus Forecasts 280Installation 280Investment 281Updates 281Service-Level Agreements 281Continuously Earned Trust 282Visibility and Transparency 282Big Data and Computing Power 283Ubiquitous Access 283Response Time and Availability 284Multitenancy, Shared Data 284Cloud-Centric Applications 284Scalability 285Communities and Markets 285Lock-in 285Security and Compliance 286PaaS: Assembly versus Fabrication 287Innovation and Democratization 287Deconstructing the Pure SaaS Model 288Summary 290Notes 291Chapter 22 Availability 293Uptime versus Downtime 295Availability and Probability 296Availability of Networked Resources 296Availability via Redundancy and Diversity 297On-Demand, Pay-per-Use Redundancy 300Summary 301Notes 301Chapter 23 Lazy, Hazy, Crazy 303Behavioral Economics 303Loss and Risk Aversion 304Flat-Rate Bias 305Framing and Context 307Need for Control and Autonomy 307Fear of Change 308Herding and Conformity 309Endowment Effect 310Need for Status 311Paralysis by Analysis of Choice 311Hyperbolic Discounts and Instant Gratification 312Zero-Price Effect 313Summary 313Notes 314Chapter 24 Cloud Patterns 317Communications Patterns 317Hierarchies 321Markets 323Repository 326Perimeters and Checkpoints 326Summary 327Notes 328Chapter 25 What’s Next for Cloud? 329Pricing 329Ecosystems, Intermediaries, and the Intercloud 332Products versus Services 336Consolidation and Concentration 336City in the Clouds 338Spending More while Paying Less 339Enabling Vendor Strategies 340Standards, APIs, Certification, and Rating Agencies 344Commoditization or Innovation? 345Notes 349About the Author 353About the Web Site 355Index 357

"In his new book, Joe Weinman explores many of the areas being impacted by the cloud computing phenomenon, offering compelling value propositions. He spells out, extremely thoroughly, the business cases and cost justifications that go behind cloud computing efforts. He also provides 28 business areas where cloud does and doesn't make business and financial sense." (Forbes.com, September 2012)