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April 8, 2010

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Addison Snell, InterSect360

HPC Application Software Vendors Begin to Adapt to the Demands of Utility, SaaS, and Cloud Computing

At a casual glance it seems the entire High Performance Computing industry is going gung ho on clouds. HPC system vendors are launching cloud-enabled infrastructure services. Middleware providers offer solutions for migrating applications to public, private, or hybrid clouds. And end users are intrigued to learn how they might maintain capability while reducing capital expenditures. “You mean I don’t have to worry about the cost and maintenance of all that infrastructure? Sign me up!”

Amidst the seemingly ubiquitous fanfare announcing the arrival of a new can’t-lose paradigm, it would be almost forgivable to overlook what should be a plot-turning question. What, specifically, are you going to run in the cloud?
Faced with mounting pressure from partners and end users in the HPC community, application software vendors are striving to cope with what it means to offer their software as a service. To learn more about the potential for cloud expansion, InterSect360 Research has been conducting a study of the outlook of SaaS and cloud computing models among the HPC ISV community.
One thing is clear: ISVs are nearly unanimous in recognizing a customer demand for cloud computing models of some type, and they also generally recognize cloud as a growth opportunity, at least in the long term. However, there are significant limitations hindering the potential transition to clouds.
ISV Applications in the Cloud, Now and Then
With so much potential interest from end users, many application software vendors have already implemented flexible licensing models that allow cloud or utility computing access. The majority of ISVs interviewed thus far have already implemented some type of utility, SaaS, grid, or cloud licensing option for at least one of their HPC applications, and the industry has already recognized some utility computing successes. HPCwire recently publicized the use of Exa PowerFLOW computational fluid dynamics simulations in optimizing the performance of the eventual gold medal–winning U.S. four-man bobsled; that software was run on hardware leased through the IBM OnDemand program.
But this is not a new phenomenon. Grid computing has been around for more than 10 years, and utility computing models predate grids. IBM has been offering OnDemand services for years, and other hardware vendors have (or used to have) similar programs. And many new “cloud” offerings are based on repackaged, remarketing grid technologies that are suddenly gaining new attention.
There is certainly new technology in cloud; in particular, the ability to use a web browser to gain access to resources distinguishes cloud from grid. InterSect360 Research defines cloud computing as accessing part of an organization’s IT infrastructure or workflow through a web (or web-like) interface. This definition uses the web interface (or “web-like,” in the case of some intranets) to distinguish cloud from grid and other utility computing methodologies, and it specifies applications by what role they play in the organization. At the boundary, an application like replaces part of an organization’s workflow and can be considered a cloud application, whereas the Fishville game on Facebook is a Web 2.0 application but not part of the player’s IT infrastructure or workflow, and therefore Fishville is not considered to be cloud computing.
Precise definitions notwithstanding, there seems to be a clear opportunity for offering utility or SaaS licensing models. Yet even among those ISVs that are actively pursuing cloud, most don’t see the opportunity exceeding 10% of their software revenue in the next two to three years, due to the inherent barriers in adoption.
Barriers to HPC SaaS
Across all vertical markets in HPC, the software vendors we interviewed consistently named two concerns that prevent organizations from running applications in the cloud: data movement and data security. These issues are potential problems for any application, but for commercial ISV codes they can be crucial, because end users cannot risk the loss of control of their core intellectual property.
“Our customers are asking us for cloud implementations of our software, but design security remains a significant barrier,” said Andy Biddle, Product Marketing Director at Magma Design Automation, makers of the Talus and Titan applications for EDA markets. “We don’t think cloud models will contribute significantly to our revenue this year or next year. Maybe in five or ten years, but not soon.”
Another factor cited as a major hurdle by some ISVs but not at all by others is the creation of the licensing models, including a methodology for protecting the licenses in the cloud. The bifurcation stems from the differences in how applications are sold in the absence of cloud: ISVs that have time-based or site-based licensing schemes tend not to have a problem with utility licensing, whereas those that have licensed applications strictly by core, socket, or node tend to see the creation of cloud-friendly licensing models as a barrier.
These barriers are not insurmountable. ANSYS is one example of a company that has recently introduced new HPC licensing options for its customers, designed to enable use of its software on hardware located anywhere, by end users located anywhere. But in this case, ANSYS still does not see its users clamoring to relinquish complete control of their codes.
“Our customers involved in engineering simulation clearly need flexibility to access computing infrastructure however it makes most sense for them – down the hall, across the planet, rented in the ‘cloud’ or owned, ” said Barbara Hutchings, Director of Strategic Partnerships at ANSYS. “They need flexibility to use licenses wherever hardware is available and to address peak-capacity needs. ANSYS and our HPC industry partners support this flexible deployment today with the goal of enabling more customers to use HPC and gain enhanced insight to drive product development decisions.”
SaaS: A Business Opportunity for ISVs?
For end users who are adopting cloud, there is a question then of what parts of their infrastructure or workflow they wish to outsource. Platform as a service (PaaS) or infrastructure as a service (IaaS) models do not necessarily imply the outsourcing of software, and private clouds do not necessarily imply that organizations are leasing instead of owning. This distinctions between IaaS and SaaS and between public and private clouds is currently a significant limiting factor in the move toward HPC SaaS. Many organizations are implementing internal clouds, but they are using licenses they already have – site licenses, time-based licenses, or even token-based usage licenses – to run their ISV applications internally on a utility basis. In the case of private clouds, the hardware and software might all be owned, but the end user within the organization is ambivalent to the back-end infrastructure.
Similarly, IaaS models move organizations into cloud computing in a way that does not imply SaaS. In some cases they may have hardware on-site that is leased on an as-used or on-demand basis, but the software applications are owned. This type of workflow is cloud but not SaaS and does not require any modification in ISV licensing approaches.
An open question then is whether cloud computing, via SaaS, represents an increase in the total business opportunity for ISVs. Here it is important to emphasize that cloud computing is not a market or industry in itself. Rather it is a methodology for accessing part of an infrastructure or workflow that in most cases already existed. That is, users were already running the applications one way, and now they’re going to run them a different way.
That said there is the potential for organizations to realize increased application usage through SaaS. One scenario for this is “cloud-bursting” – using either a public or private cloud to access additional cycles during peak workload times. This structure appeals to established HPC application users who want to do more than their current infrastructure allows without increasing their capital outlay, and it may represent the most significant near-term opportunity. But although cloud computing is currently in vogue, utility computing models have offered this benefit in the past, and it has never become a significant dynamic across the HPC industry.
Another potential business model is for cloud computing to enable new entrants into HPC by reducing the costs associated with hardware and software. This is a nice idea but falls short of addressing some of the more significant barriers for new entrants to HPC: creation of digital models and synchronization with physical testing, plus the considerable social aspect of changing a workflow within an organization. Merely reducing cost is a necessary but insufficient condition for driving HPC adoption, and until an ISV (or another type of host) is capable of offering a more complete “digital workflow as a service,” it will be difficult for SaaS alone to drive new HPC adoption.
Yes, cloud is a major phenomenon in HPC. Yes, ISVs are under a lot of pressure to offer SaaS and utility licensing models. Yes, many of them have reacted to this already. But nevertheless, the application software vendor community is probably correct in predicting that cloud will not have a dramatic impact on their business in the immediate term, as the majority of cloud adopters explores private clouds and IaaS models before it moves to HPC SaaS.
For now, the IT community is running hell-for-leather to adopt cloud computing. As for what they’ll actually run in the cloud? By the time the user community is ready to move its data into the cloud, application software vendors should be ready.
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