CM5108 – CLOUD

COMPUTING
Compiled and prepared by:
Megha Yawalkar

Department of Computer Engineering

Government Polytechnic Pune
UNIT – III (Service Management and Resource Management in Cloud computing)
3.1 CLOUS SERVICE MANAGEMENT
3.1.1 SLO (SERVICE LEVEL OBJECTIVES):

• Whenever a Consumer – Provider scenario is in picture, and services are metered or paid
services then service management is a major and important role player.

• When services are metered services then there should be contract or agreement from Provider
and Consumer sides so as to agree on certain points, pricing measures, quality of services etc.

• The SLA (Service Level Agreement) served this purpose in cloud computing. In SLA, pricing of
services, service availability factor, other quality related factors are included. Service level
agreements play an important role to guide outsourcing vendors to understand customers’
business need. Normally outsourcing vendors have to ensure that the agreed service level
agreements are met. Therefore, it is necessary to be able to effectively develop service level
agreements to avoid resource failures.

• There is no as such fixed format for this SLA, but it is a signed document or a formal contract
between service provider and a consumer
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UNIT – III (Service Management and Resource Management in Cloud computing)
3.1 CLOUS SERVICE MANAGEMENT
3.1.1 SLO (SERVICE LEVEL OBJECTIVES) (CONTINUED…) :

• Why SLA is needed?

• The SLA helps to develop trust to SP(Service provider)
• Helps SP to understand business requirements of consumers
• Helps consumers to select appropriate SP by comparing their SLAs
• Bound SP to provide the promised services
• Helps to maintain quality of services
• Helps consumer and SP for billing of services

• SLA contains SLO (Service Level Objectives) :

• Services in SLA are objectively measurable conditions and hence every SLA
• SLOs helps to tailor product/ user/ requirement specific goals and to target realistic
performance.
• A Service Level Objective (SLO) serves as a benchmark for indicators, parameters, or metrics
defined with specific service level targets. The objectives may be an optimal range or a
specific value for each service function or process that constitutes a cloud service.
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UNIT – III (Service Management and Resource Management in Cloud computing)
3.1 CLOUS SERVICE MANAGEMENT
3.1.1 SLO (SERVICE LEVEL OBJECTIVES) (CONTINUED…) :

• The SLO is measurable characteristic.

• It consists of shared performance goals in it’s structure.
• E.g. The requirement availability for the peak time is 90%, then the allowed down-time per
year could be 36.5 days OR 72 hours per months OR 16.8 hours per week

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UNIT – III (Service Management and Resource Management in Cloud computing)
3.1 CLOUS SERVICE MANAGEMENT
The SLA Life cycle

• There are 3 major phases – ACQUISITION, OPERATION, TERMINATION

[A] Cloud service lifecycle: Acquisition

A prospective cloud customer can use service offerings published by the cloud service provider to
check whether it meets her/his requirements, for example, security, personal data protection,
performance etc., and see how one offering compares with another in the market. Why is it
important? This phase is crucial for establishing an SLA between the cloud customer and the cloud
service provider.
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UNIT – III (Service Management and Resource Management in Cloud computing)
3.1 CLOUS SERVICE MANAGEMENT

3.1.2 SLA(SERVICE LEVEL OBJECTIVES) (CONTINUED…) :

[A] ACQUISITION -
[A.1] Assessment – Any relationship starts with pre-assessing what one would like, why, when
and with whom (for instance one or more CSPs), so does the first Cloud SLA lifecycle phase,
Assessment. This includes for instance doing market intelligence, checking specific needs,
offerings, CSPs, performance of CSPs and setting up a business case
[A.2] Preparation – This second Cloud SLA lifecycle phase, includes for instance, the first
contact and conversation with possible CSPs, further assessment, pre-evaluation and fine-
tuning goals and assumptions
[A.3] Negotiation and contracting - This phase can include preparing for negotiation and the
actual negotiation and deal making with one or more CSPs, including sharing concerns,
discuss in-scope and out-of-scope (cloud) services, debating about trade-offs and finding
common grounds, reaching agreement, double-checking needs, goals and assumptions, and
of course documenting the contractual arrangements, and signing thereof

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UNIT – III (Service Management and Resource Management in Cloud computing)
3.1 CLOUS SERVICE MANAGEMENT

3.1.2 SLA(SERVICE LEVEL OBJECTIVES) (CONTINUED…) :

[B] OPERATION -
[B.1] Execution and Operation– This phase includes the actual start of setting up the cloud
services, populating the respective cloud service with relevant data, on boarding and training
users, setting up communication channels and further operational activities while using the
respective cloud services
[B.2] Updates and amendments – This phase includes updated or otherwise amended needs,
goals and assumptions by the Cloud Service Customer during the term of the ongoing cloud
services arrangements, as well as improved or added cloud services by the CSP there under. It
also includes optimization of the respective cloud services by CSP as per (contractual or other)
non-compliance, breaches and other incidents during that term
[B.3] Escalation - This phase deals with contractual or other) non-compliance, breaches and
other incidents during the term of the ongoing cloud services arrangements that have resulted
in a dispute that needs escalation, (perhaps even litigation as a last resort), negotiation and
resolution, either by parties themselves or by arbitration, court or otherwise

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UNIT – III (Service Management and Resource Management in Cloud computing)
3.1 CLOUS SERVICE MANAGEMENT

3.1.2 SLA(SERVICE LEVEL OBJECTIVES) (CONTINUED…) :

[C] TERMINATION -
[C.1] Termination and consequences of termination – This phase deals with the end of the
relationship between CSP and CSC, including the end of the legal relationship even though
the latter will generally continue for several years after any termination as per mandatory laws
and legislation. This last phase for instance includes the assessment of alternatives, settlement
and termination arrangements, cloud services transition projects and services, data export,
customer and (end)use care and diligence, and adequate data deletion

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.2 Types of SLA
• used for individual customer and it consists of all relevant services
that she/he may need into a single contract.
Customer based • It consists details of type and quality of services that has been
agreed upon

• It consists of one identical type of service for all of

Service based its customers
• It is more straightforward and based upon standards

• all general issues are covered here, which are

applicable to entire organization.
Multi-level • It has 3 sub-categories: Corporate level, customer
level, service level.
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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.2 Types of SLA (Multi-level)

(a) Corporate Level • No frequent updates are applicable to end-users

• Applicable to specific group of customers (less

(b) Customer Level usage )

• all attributes are applicable to specific customer

(c) Service Level group ( insurance service)-> s/w + Apps => Cloud
(More usage)

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.2 SLA Management in Cloud

• Service Level Management, or SLM, is defined as being “responsible for ensuring that
all its service management processes, operational level agreements, and
underpinning contracts, are appropriate for the agreed-upon service level targets.
SLM monitors and reports on service levels, and holds regular customer reviews.”

• In other words, the key criteria for any information to be contained within a Service
Level Agreement (SLA) are that it must be measurable, with all language used is clear
and concise in order to aid understanding.

• Understanding SLM is one of the steps in getting an ITIL certification. The IT

Infrastructure Library (ITIL) certification is a globally recognized IT service management
certification, distributed by Axelos. There have been several versions of ITIL, with the
latest one being ITIL v4 2018. The ITIL Certification course is an entry-level qualification
in the field of IT service management, granting Foundation certification to those who
complete the studies.
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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.2 SLA Sample format –
A typical SLA document may include,
•An introduction to the SLA, what does this agreement propose
•A Service description, what service this SLA supports, and details of the service
•Mutual responsibilities, who’s responsible for what part of the service
•Scope of SLA
•Applicable service hours, from what time till what time is the service available
according to the agreement
•Service availability, how much is the service available during the service window
and outside of the service window
•Reliability
•Customer support arrangements
•Contact points and escalation; a communication matrix
•Service performance
•Security
•Costs and charging method used

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.2 SLA Management and mitigation example –

Suppose, a cloud (CSP – XYZ) guarantees service availability for 99% of

time. Say an customer – c1 application run on cloud for 15 hours per day.
At the end of the month it is found that the service outage was total 10.75
hours.

Can we say it is SLA violation / violation of initial availability assurance?

% availability = {1 – (Outage duration / available duration)} * 100

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.3 Cloud Economics –

Cloud economics is the study of Cloud Computing’s cost and benefits along with economics
principles used with them.

• As cloud is ‘pay-as-usage’ model, it is a convenient way to CSPs and customers use resources
and infrastructure etc. and hence it is necessary to learn about cloud economics.

• For Clous users/ customers, cloud computing allows –

• To reduce capital costs of infrastructure.
• To remove maintenance cost.
• To reduce administrative cost.
• For CSPs, -
• a capital cost is occurred for purchasing infrastructure, to purchase important assests.
• But for CSPs, it may take longer time to gain a profit

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.3 Cloud Economics – Terms related to cloud economics –
A. Return on Investment (ROI) –
1.
the impact a cloud investment has on an organization
2.
Cloud ROI is the ratio of monetary gain from an investment
3.
Cloud ROI is impacted by initial outlay, the speed with which returns occur, and cost decreases
that occur as a result of the investment. For example, moving to a public cloud provider
decreases capital expenditures, but increases monthly costs. These are also impacted by
resulting revenue improvements, product enhancements that enable prices to be increased, or
the ability to scale more rapidly to meet peaks in demand that may otherwise have been lost
opportunities.
4. Some key factors when calculating cloud ROI include: -
A. Productivity - If cloud adoption enables the business to meet peak demands rapidly then productivity
can be enhanced and opportunities gained that might have been lost without cloud scalability.
B. Leverage - A single cloud platform such as AWS or Azure can provide the organization with the basic
infrastructure to manage many applications. The virtualized nature of cloud services enables resource
sharing of VMs and storage pools between multiple departments, and a cloud providers multi-tenancy
offers economies of scale that can make cloud services less expensive than on-premises servers and
storage for many organizations.
C. Pay as you go - By eliminating capital expenditures, organizations pay for only those cloud services
actually used in a give time period. There is no need to pre-pay for infrastructure necessary to meet peak
demands UNTIL those peaks occur, and then organizations only need pay for increased capacity when it is
needed. The same is true of software licenses; only pay for those you need when you need them.
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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.3 Cloud Economics –
D. Provisioning time. Since procuring and deploying new infrastructure in the cloud is virtually
instantaneous, new projects can be launched immediately rather than waiting for hardware to be ordered,
configured, shipped, and installed. This also has a strong impact on time to value since work can begin
immediately upon project approval.
E. Capital spending reduction. Migrating applications to the cloud eliminates the need to spend for on-
premises infrastructure, as well as eliminating support and upgrade requirements. Lower costs translates
to higher profitability and increased ROI.
F. Access to new market. Faster delivery and lower costs translate to more competitive offerings, which
can open the door to new customers and markets worldwide.
G. Cloud risk management. Calculating the cost of project failure, infrastructure outages and natural
disasters, as well as ways to mitigate them, via disaster recovering solutions.
5. How to Calculate cloud ROI –
(Gain from investment – investment) / (investment) = ROI
An organization’s ROI can be calculated using the gains realized from the TCO (investment). When
calculating the TCO, be sure to include:
•Switching cost and time of moving to the new platform.
•Skill acquisition (and productivity loss) for training for new platform
•Risk factors around lock-in to new platform
•New economic model, understanding the new set of cash flows that will result from the new platform
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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.3 Cloud Economics –
B. CAPEX, OPEX, and switching from CAPEX to OPEX –
•CAPEX - Capital Expenditure: It is the initial spending of money ( whole together ) on physical infrastructure,
and then deducting that up-front expense over time. The up-front cost from CapEx has a value that reduces
over time. All expenses incurred for long-term benefits in the future lie under CapEx.
•OPEX - Operational Expenditure (OpEx): It is like a pay-as-you-go service. You can deduct this expense in the
same year you spend it. There is no up-front cost, as you pay for a service or product as you use it. It is as the
name suggests, the expense of daily operation.

C. Total costs of Ownership (TCO) –

•It is total cost of adopting, operating, and provisioning cloud infrastructure
•TCO includes – calculation of cost of current IT infrastructure, cloud environment adopting cost, migration
cost, intangible benefit from the loud
D. Elasticity –
Traditional IT infrastructures are built to anticipate peak requirements, and hence they need to buy
and maintain excess computing capacity. Cloud computing reduces this need of over-provisioning because
customers can pay as per usage.
E. On-demand pricing –
Pay- per use and cloud elasticity
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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.1.3 Cloud Economics –
Pricing strategies –

1. Tiered pricing – e.g. Amazon EC2

2. Per unit pricing – e.g. GoGrid -> RAM/Hour
3. Subscription – based pricing - e.g

TASK –
1. CloudZero’s cost intelligent platfrom – Case study related to cloud ecnomics.
2. How costs of cloud services are decided ? (Parameter- wise description )
3. Role of cloud economics study for those who wish to start as CSP

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.2 Cloud Resource Management –
• Resources = means to perform tasks (e.g. developers, infrastructural
resources, time, finance, skills possessed by humans, machinery, etc.
• Types of Resources in Cloud – [a] Physical [b] Logical
• Policy = principle guiding decision
• Mechanism = means to implement policies
• Cloud Resource Management (CRM) is policies and mechanism for resource
allocation
• Requires complex policies and decisions for multi-objective optimization.
• It is challenging - the complexity of the system makes it impossible to have accurate global state
information.
• Affected by unpredictable interactions with the environment, e.g., system failures, attacks.
• Cloud service providers are faced with large fluctuating loads which challenge the claim of cloud
elasticity. / load balancing
• Strategies for policies and mechanism for SaaS, PaaS, and IaaS will be different from each other

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.2 Cloud Resource Management –

• Cloud resource management (CRM) policies – CRM policies are categorised into five categories :
1.Admission control prevent the system from accepting workload in violation of high-level system policies.
[a] for login –
[b] for task allocation to proc
[c] cloud interface
Any system should not accept additional work load if this new workload would prevent it from completing a
work which is already in progress or committed by the system. To limit the work load the admin should be aware of the
global status of the system and the environment in which it is working.
2.Capacity allocation allocate resources for individual instances (where instance is activation of service on behalf of
cloud user). When the state of the individual server / resource is rapidly changing, then capacity allocation is a
challenging task.

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.2 Cloud Resource Management –

3.Load balancing distribute the workload evenly among the servers.

4.Energy optimization minimization of energy consumption.
Load balancing and energy optimization are corelated. For example, in case of four identical servers A, B, C, D and
they are having workload 80%, 60%, 40%, and 20% respectively of their capacity. Now load balancing says there
should be evenly distributed work load and a minimum cost of providing service should occur. To achieve this, we can
ensure use of smallest number of servers and hence making some servers on stand by mode. For example, we can
migrate the workload from server D to server A. also we can migrate workload from C to B. Which will make use of
two servers only with their full capacity and putting servers C and D on standby , hence utilizing less energy as
compared to the previous situation.
5. Quality of service (QoS) guarantees ability to satisfy timing or other conditions specified by a Service Level
Agreement. (assurance of functionalities / standards / certifications) .

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 UNIT – III (Service Management and Resource Management in Cloud computing)
3.2 Cloud Resource Management –

Resource management policies must be based upon a disciplined approach. There are four basic
mechanisms for implementation of these (CRM) policies –
1. Control Theory – Control theory uses feedback so as to guarantee system stability and to predict
a transient behaviour of the system. The prediction in this is preferably for local status rather than
the global status.
2. Machine learning – Applying mechanism based on training a system to predict status. This
technique don't need performance model of the system.
3. Utility based – It needs performance model of the system and a mechanism to corelate user level
performance.
4. Market oriented / economic mechanism - Auction models, cost-utility models, or
macroeconomic models are an intriguing alternative and have been the focus of research in recent
years.
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