Cloud computing has outgrown the state of being simply a buzzword, which is destined to excite magazine readers and conference attendees, and promptly fades away under the pressure of the next “technical miracle.” The authors show how it is changing the computing landscape and becoming an actionable item for thousands of IT and business professionals. Driven (at least to a certain extent) by technological opportunities, cloud computing implementations, by definition large and complex systems, naturally involve risks of exposure to major financial challenges. To avoid these risks, cloud computing projects should include solid economic feasibility assessments to inform strategic decisions. The book is intended to be a complete guide (as the subtitle suggests) for addressing practical planning and the design of cloud computing initiatives, with a special focus on cost. The book accumulates a lot of information and uses many tables and figures. Many figures present the historic development of the topics, helping readers visualize the stages and logic of the events.

The book has 18 chapters grouped into five parts.

Part 1, “Cloud Computing Foundations and Business Requirements,” serves as an extended introduction to the subject matter from a business perspective. It starts by exploring similarities and differences of such paradigms as parallel, distributed, grid, and utility computing and how they led to cloud computing. Then, the authors explain their definition of the term “cloud computing.” They emphasize that cloud computing is mainly driven by cost efficiency. However, this is not a panacea, and depending on a business scenario, the savings may vary from +300 to 500% to -144%. In plain English, cloud computing means a shift from the “buy” to the “lease” model. An approach to defining business needs is discussed, and the role of a business analyst is reviewed. Finally, a case study demonstrates practical steps of defining business problems, needs, and requirements for a large cloud computing solution.

Part 2, “Cloud Data Center Facility,” is a key component of a cloud computing implementation. Data center site selection and space cost are discussed. Critical components of the power system are presented, including generators, power panels, transfer switches, uninterruptable power supplies, power distribution units, and cabling. A process of calculating data center power requirements is presented. Strategies for saving power are discussed. Cooling, a critical element of the functioning of a data center, is described in detail including cooling strategies and the methods of air distribution. On-site security (including the physical, organizational, and infrastructure layers) and fire suppression solutions are analyzed, and their costs are assessed.

Part 3, “Cloud Infrastructure and Management,” starts with a description of cloud servers (different instruction set architectures, reduced instruction set computing (RISC), or complex instruction set computing (CISC)), their architecture, and their relationship to storage and the network. It is pointed out that servers may cost up to 45% of the capital expenditure of the cloud data center. Many storage options are described. Data center network components (switches, bridges, routers, gateways, and so on) and their topologies are introduced.

Part 4, “Cloud Computing Cost Models and Framework,” starts with an introduction to cost modeling terms and definitions. Many types of costs need to be included in the cloud data center model, for example, direct, capital, and operational. A literature review of the recent cloud computing models is presented.

Part 5, “Cloud Strategy and Critical Decisions with Real Options Theory,” attempts to approach cost modeling at a strategic level. A case study is introduced based on the experience of a large web portal company. Assumptions of costs for all cloud data center components are explained. The static net present value model is used. The final chapter suggests combined use of the Monte Carlo simulation and real option theory for investment decision making analysis for a dynamically evolving company.

The book will be interesting to a wide range of IT professionals involved in cloud computing, business analysts, and students, of both financial engineering and computer engineering specialties. Do not be scared by the size of the book; it could be used as a reference guide on specific issues. As the title suggests, one of the main subjects of the book is cost modeling. In several chapters, return on investment (ROI) is also mentioned as a performance measure, but it did not receive close consideration. Descriptions of each type of hardware used in cloud data centers involve overviews of major vendors, their market share and market trends, many technical details, and the history of product evolution. Some readers may find this information a bit overwhelming.

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