Chapter 1
Getting to Know the Cloud

If you own an Android device, you most likely contributed to the estimated 15 exabytes of data stored in the Google “cloud.” And just what exactly is an exabyte? You can think of it in three ways:

An exabyte is equivalent to one quintillion bytes, or one billion gigabytes.

If the entire population of Thailand each owned a 16 GB smartphone, their data storage would be equivalent to one exabyte.

Supposedly, if you type 1,000,000,000,000,000,000 characters and print those characters on paper, you would have to cut down about 50,000 trees.

Simply put, there is a lot of data in the cloud, and it grows every day. This is why it isn’t unusual nowadays to hear the buzz phrase big data when talking about cloud computing.

Big data is simply a huge volume of data that cannot be stored or processed in the traditional way. Imagine processing the data from 400 million tweets a day from Twitter, or analyzing the patterns and behaviors of the 1 billion YouTube viewers who watch 4 billion videos per day. There are valuable insights from such data, but there’s no way you can gather those insights without cloud computing. For this specific reason, analysts are predicting that the growth of the IT industry will be driven by big data and cloud computing. And why not? The combination of big data and cloud computing will give rise to very smart computers that can learn through artificial intelligence without being programmed. This is called machine learning. Don’t be alarmed by yet another new term here. Machine learning already is so pervasive that you probably don’t even know you’ve used it.

The way we introduced cloud computing in this book when it first came out four years ago is no longer coming from the same lens we are looking through now. According to www.cloudcomputing-news.net, the cloud computing industry grew from $46 billion to more than $150 billion from 2008-2014. In the very near future, the question will no longer be about what cloud computing is, but more about what cloud computing can do for you and/or your business.

If you’re still confused about cloud computing, don’t despair. Unless you’ve been living under a rock in the last five years, you most likely have used cloud computing in one shape or form, so it isn’t as mystical as you might think.

This chapter is for those of you who have a keen interest in understanding the basic principles of cloud computing with the intent of leveraging that knowledge to help your business, your organization, or your professional career. You’ll see the interconnections between cloud computing, big data, and machine learning, and how they all feed into the overall Office 365 services. You’ll read about the various services within Office 365, what they cost, and gain insight into Microsoft’s strategy for helping individuals and organizations become more productive in keeping with their mission. It’s the information you need to chart your cloud journey.

Defining Cloud Computing

The cloud is a metaphor for the Internet. In very simplistic terms, cloud computing means that your applications or software, data, and computing needs are accessed, stored, and occur over the Internet “in the cloud.”

If you’ve had a Facebook account, played online games, shared files with Dropbox, or sync’d your photos from your mobile devices, then you’ve been computing in the cloud. You’re using the services of an entity to store your data, which you can then access and transform over the Internet. Imagine what life would be like if you wanted to share photos of your lunch to all of your 500 friends if cloud computing didn’t exist.

For businesses and other organizations, cloud computing is about outsourcing typical IT department tasks to a cloud service provider who has the experience, capability, and scalability to meet business demands at a cost that makes sense.

Let’s take for example a small business owned by a friend of mine. It’s a boutique accounting firm that services over 200 businesses locally. Email is a critical communication platform for them. To be productive, the firm decided to hire an independent IT consultant to install an email server in their office. The deal was that the IT consultant would train a couple of people from the firm to do basic server administration. Beyond the basics, the consultant would be available to remotely access the server to troubleshoot or show up in person if something breaks.

Like most horror stories I’ve heard from people who try to manage their own servers without a highly trained IT staff, the situation turned out to be a nightmare for this firm. Their email server went down during tax season at a time when the IT consultant wasn’t immediately available. In an industry where highly sensitive data is exchanged and customer trust is paramount, you can imagine the stress the company owner experienced dealing with emails containing sensitive attachments ending up in a black hole, irate customers who didn’t get a response to their time-sensitive requests, and lost opportunities impossible to even quantify.

Cloud computing for this firm meant migrating their emails to Office 365. So instead of running their own email server, fixing it, patching it, hounding their IT consultant, and dreading another doomsday, they simply paid a monthly subscription to Microsoft. If anything breaks, Microsoft’s highly trained engineers will fix it. They also know that emails will not be lost, because they don’t rely on one piece of equipment getting dusty in one corner of their office break room. Instead, they’re taking advantage of Microsoft’s huge and sophisticated data centers, which replicate and back up data on a regular basis.

Understanding the cloud deployment models

The type of deployment model the firm used in this story is referred to as the public cloud where the cloud computing service is owned by a provider (Microsoft) offering the highest level of efficiency in a shared but secure environment. My friend did not own or maintain any hardware. The company accessed and used the email and other services from the public cloud on a subscription model. In cloud computing-speak, this firm is referred to as a tenant in a public cloud.

For organizations where a one-size-fits-all approach doesn’t work, two other deployment models for cloud computing are available: private clouds and hybrid clouds (see Figure 1-1).

FIGURE 1-1: Cloud computing deployment models.

A private cloud typically is dedicated to one organization on its own highly secure, private network over a company intranet or hosted datacenter. Unlike the public cloud, a private cloud doesn’t share resources with other tenants. Industries with privacy concerns such as financial institutions and healthcare organizations typically opt for a private cloud.

A hybrid cloud is simply a combination of the public and private clouds. As an example, an organization may run their email applications in a public cloud but store customer information in a database in a private cloud.

Regardless of the deployment model used, cloud computing means that your business applications are outsourced somewhere on the Internet where you don’t have to worry about paying for capacity you don’t need or needing—in a hurry—capacity you don’t have. It also means that the version of the software you’re using is always the latest version; it’s accessible anytime, anywhere, on most devices.

The advantages of cloud computing aren’t limited to just big companies. Cloud computing is also beneficial for small- and medium-size organizations, and even solo-preneurs like consultants. We’ve all heard people say that in American society, education is the greatest equalizer. In my opinion, cloud computing is the greatest equalizer for businesses not just in America, but throughout the world. It breaks down the barriers for small and even one-man-show businesses from competing in the global market. For a small monthly fee, any business can have the appearance of a large enterprise with a full staff of highly trained IT personnel.

Knowing the cloud service models

Contrary to general belief, cloud computing isn’t a new concept. The idea of an “intergalactic computer network” was first introduced in the 1960s by J. C. R. Licklider, one of the most influential men in the history of computer science. Other people attribute the emergence of cloud computing to John McCarthy, another computer scientist who in the 1960s proposed that computing be delivered as a public utility similar to service bureaus that provided services to businesses for a fee.

Back then, massive computing was conducted with supercomputers, and mainframes occupying whole buildings. Thousands of central processing units (CPUs) were connected to divide the computing tasks of supercomputers in order to get results faster. The very high cost for creating and maintaining these supercomputers precipitated the discovery of more economical computing means, which brings us to where we are today.

With cloud computing today, not only can businesses use the services of specialized providers for massive computing, they also benefit from the lower cost of these services stemming from the efficiencies of shared infrastructure. Generally, there are three types of cloud computing service models (see Figure 1-2):

Software-as-a-Service (SaaS)

Platform-as-a-Service (PaaS)

Infrastructure-as-a-Service (IaaS)

Software-as-a-service (SaaS)

A SaaS service model is where software application is paid for on a subscription basis and installed from the cloud provider’s datacenter. Office 365 is an example of a SaaS model where all your collaboration and productivity applications are bundled together as part of your subscription. You don’t have to run your own email servers, for example, nor do you need to maintain and update the servers.

For desktop applications like Office Pro Plus, you can install the software from a web-based portal instead of buying the packaged software from a store. After you’ve installed the software, updates and bug fixes automatically are installed in the background.

Platform-as-a-service (PaaS)

In a platform-as-a-service (PaaS) service model, developers can create online applications (apps in short) in platforms provided by the PaaS provider. The developers develop their own code for the apps, store it in the PaaS provider’s datacenter, then publish the apps. They don’t have to worry about planning for capacity, security, or managing the hardware—the PaaS provider does that. For example, if you’ve played Angry Birds on your Android phone, it may interest you to know that the publishers used Google App Engine as a PaaS solution to make their addicting games available to millions of fans without worrying about scaling the app automatically to match the amount of traffic at any given time.

Created by Sam Johnston using OmniGroup’s OmniGraffle and Inkscape (includes Computer.svg by Sasa Stefanovic)

FIGURE 1-2: Cloud Computing Service Models.

Infrastructure-as-a-service (IaaS)

In an infrastructure-as-a-service (IaaS) service model, organizations have access to computing power and storage capacity, using a cloud provider’s hardware. This enables them to have control over the infrastructure and run applications in the cloud at a reduced cost. The organization, however, is responsible for managing and updating the operating system running the applications. While capacity planning, security, and hardware management is the responsibility of the IaaS provider (similar to PaaS), it is the organization’s job to monitor the performance of their apps and/or add more resources to meet the demand. Amazon Web Services offer several IaaS cloud hosting products that can be purchased by the hour. Rack-space is another player in the IaaS market offering managed and cloud hosting services. Microsoft Azure (formerly known as Windows Azure) started out as a PaaS solution, but extended its services to include IaaS capabilities.

Getting a grasp on Big Data and Machine Learning

According to a report from Gartner in September 2014, strong investments and planned investments in big data adoption continue across all industries—communications and media lead the pack. This isn’t surprising, because big data offers opportunities for businesses to increase sales, target marketing, and enhance customer care.

If you have ever given a Yelp review, liked a Facebook post, tweeted, posted images on Instagram, or bought anything online, then you have contributed to big data. Even if you do nothing but sit in an airplane, you are still contributing big data because aircrafts continually send data to air traffic control during the flight for real-time tracking and monitoring.

The benefits of big data aren’t limited to companies. Big data can help build smart cities to benefit its citizens and environment. The city of Oslo in Norway, for example, reduced their street lighting energy consumption by 62 percent by analyzing big data and acting on the insights from the analysis. Portland, OR eliminated more than 157,000 metric tons of CO2 emissions in just six years by optimizing the timing of its traffic signals by intelligence gathered from big data. That’s about 30,000 cars off the streets for a whole year!

Machine learning, on the other hand, has taken a giant leap from when the idea started floating around 50 years ago with the advent of big data. A computer with artificial intelligence consumes big data to pick up on patterns, predict the future, and train itself to respond to a user under certain conditions. If you’ve used speech recognition on your mobile device, that’s machine learning in action. The other day, I was using my smartphone to look for a restaurant; to my delight, the top listings had vegetarian options. I can only guess that machine learning has picked up from my Facebook likes and posts that I’m vegetarian.

The combination of big data and machine learning can help not just to prevent malware, it can also proactively address the changing security landscape where threats and attacks are getting more sophisticated every day. 2015 was a banner year for data breaches, from the U.S. Government’s Office of Personnel Management, to health insurers Anthem and Premera, to the IRS, to extramarital affairs site www.ashleymadison.com. This issue is top of mind for many organizations. Consequently, cloud providers are taking steps to alleviate concerns around privacy and security.

Microsoft’s latest addition to the Office 365 plans (E5) includes the Advanced Threat Protection capability. Among other capabilities, it scans email attachments and links in basically a “detonation” chamber to do behavior analysis and look for signals by using machine learning and big data to protect users from both known and unknown threats.

Recognizing why you should care

In the early 20th century, people were skeptical about cars and viewed the new invention as horseless carriages, based on a centuries-old dominant paradigm: the horse and carriage.

Gottlieb Daimler, the inventor of the automobile, estimated long-term auto popularity to be no more than a million cars. A Michigan Savings Bank president once advised Henry Ford’s lawyer not to invest in Ford Motor Company in 1903 because “the horse is here to stay but the automobile is only a novelty, a fad.”

Today, over 600 million cars are on the road . . . and not many horses. The important role cars play in our daily lives has proven both Daimler and the Michigan Savings Bank president wrong. Prior constraints to the production of cars have been overcome to bring the cars to the masses.

Today, our society faces a similar change. Just as in the early days of the automobile industry, it’s still unknown where this paradigm shift will take us. What we do know is that cloud computing, big data, and machine learning promise not just cheaper but also faster, easier, more flexible, and more effective solutions to problems for our business or our society.

Introducing the Microsoft Cloud Solutions

As of this writing, Microsoft has invested $15 billion to build its massive cloud infrastructure. Its comprised of more than 100 datacenters around the globe hosting over 1 million servers managed by a team of experts working 24/7/365 to support more than 1 billion customers. Their fiber optic network is so huge, it could stretch to the moon and back—three times over. This staggering set up provides the backbone for the company’s 200-plus online services, including Office 365, Bing, Xbox Live, Skype, OneDrive, and Microsoft Azure.

While a lot of focus has been in the “cloud,” Microsoft newest frontier is way down on the ocean floor. Their recent investment in a research (codename: Project Natick) to submerge servers below the surface of the ocean as a way to speed up cloud computing proved to be a success. So who knows: soon, slow and expensive internet connection during a Disney or Royal Caribbean cruise may be a thing of the past.

These investments are surely paying off for Microsoft. Every day of the week, 3 billion minutes of calls are made by Skype users. As of January 2015, Microsoft claims that 80 percent of Fortune 500 companies are in the Microsoft cloud. The Texas state government alone has 100,000 employees using Office 365 to collaborate in full compliance of privacy and security requirements.

In this section, we cover the top three Microsoft cloud products that empower businesses: Microsoft Azure, Microsoft Dynamics CRM, and Office 365.

TIP

Microsoft’s Skype Translator can translate your voice conversations in real time in seven languages: English, Spanish, French, German, Italian, Mandarin, and Portuguese. It can also translate your instant messages in over 50 languages, from Arabic to Yucatec Maya.

What can you do with Microsoft Azure?

Microsoft Azure (formerly known as Windows Azure) is an open platform comprised of a growing collection of integrated cloud services: computing, database, mobile, networking, storage, analytics, web, and more. The flexibility of this platform makes it easy to scale up or down to meet business needs under a pay-for-use, per-minute billing business model.

If you’re a developer, you can take advantage of the integrated tools and built-in templates in Microsoft Azure to build your web and mobile apps. It supports the same technologies millions of developers and IT professionals already use and trust. After your apps are published, you can run them from any of the worldwide network of Microsoft datacenters. Having a global footprint means that you have a lot of options for running your applications and ensuring great customer experience.

The big data and machine learning scenarios covered earlier in this chapter are run in Azure. This new era of business intelligence enables organizations to make smarter decisions, improve customer service, and uncover more opportunities for growth.

To address data security and privacy concerns, Microsoft has made an industry-leading commitment to the protection and privacy of data. They’ve been recognized by leading data protection authorities and were the first major cloud provider to adopt the new international cloud privacy standards. They have also launched Azure Government, a stand-alone version of Azure designed for U.S. public agencies with rigorous compliance requirements.

Better customer engagements with Dynamics CRM Online

If your organization is looking for a better way to store and manage customer information, increase sales, and provide great customer experience, then you need a customer relationship management (CRM) solution.

Microsoft Dynamics CRM is a customer relationship management (CRM) solution that easily integrates with Microsoft tools and technologies such as Outlook and SharePoint. The user-friendly interface allows sales professionals to manage prospects and clients from their desktop computers or on most popular mobile devices. Marketing professionals can create and monitor marketing campaigns and measure their effectiveness using built-in analytics tools.

Understanding that customer service is key to business success, Dynamics CRM’s core functionality includes a ticketing system to log, respond to, and manage requests, complaints, and other types of feedback. It can create cases automatically from email as well as posts on social networks like Twitter and Facebook.

Beyond just making the sale and providing great support, you can also proactively manage your brand by using the Microsoft Social Engagement tool with Dynamics CRM. The tool has powerful social intelligence functionalities that enable you to gain insights about your brand based on what people are saying about you on social media. Those insights can then help you engage with your existing and potential customers more effectively. You can even drill down from the topics you’re monitoring to quickly analyze the conversations, locations, and even sources of the feedback or sentiment!

The explosion of Office 365 and why

More than 1.2 billion people use Microsoft Office. Outlook.com has more than 400 million active users. Office 365 is now available in 140 markets in 40 languages. These are the latest official stats from Microsoft as of this writing.

A much more interesting statistic, however, comes from Okta, a cloud service provider established in 2012, which offers passwords and employee accounts management for other cloud services. According to Okta, Office 365 has skyrocketed in a short span of 6 to 9 months, surpassing Salesforce as the most popular app used by their clients.

As a consultant and a Microsoft Partner focused on helping small businesses with their cloud journey, it’s easy for me to see why Office 365 is so popular. The latest iteration of Office 365 is the most secure cloud productivity and communications solution I’ve seen so far. It now includes such capabilities as

Broadcasting web conferences to up to 10,000 people

Using Skype for Business like a traditional phone to make and receive phone calls to people outside your organization

Understanding work time and interactions

Ensuring that email attachments and links first pass through a “detonation” chamber for extra protection

When this book first came out, much of the productivity focus in Office 365 was on these services:

Email and calendar (Exchange Online)

Document collaboration (SharePoint Online)

Web conferencing (Lync Online—now called Skype for Business)

Office applications

Today, the Office 365 productivity story includes

Social networking (Yammer)

Professional digital storytelling (Sway)

Corporate YouTube portal (Office 365 Videos)

Personally relevant content for you (Office Delve)

Microsoft continues to add more services in Office 365 as evidenced in their road-map. Clearly, they aren’t letting up on their strategy to build the best-in-class platforms and productivity services for a mobile-first, cloud-first world.

Knowing the Different Microsoft Office 365 Plans

Office 365 is the answer to a modern workplace where people no longer have to work in the same location to get things done. As a cloud productivity and communication solution in one place, Microsoft Office 365 offers service plans for practically all types of businesses and organizations.

Analyzing the Office 365 Small Business Plans

For the price of one venti Caramel Macchiato (plus tax) from Starbucks, a small business can use

50 gigabyte mailbox

1 terabyte of online file storage (which is about $80 if you buy the same storage in a hard drive)

Ηigh-definition video conferencing

Online version of Microsoft Office

Social communication with colleagues

In other words, if you’re a small business just starting out or a professional services provider working from home, there is no excuse for not impressing your customers or clients by exuding the perception of a large organization. All you have to do is give up one cup of coffee a month to be able to afford to subscribe to the Office 365 Business Essentials at $5 per user per month with an annual commitment.

If you already have a cloud-based email, subscribing to the Office 365 for Business plan gives you the newest version of Office for Mac and PC, Office apps you can run on your tablets and phones, online versions of Office including Word, Excel, and PowerPoint, 1 terabyte of online storage, and professional digital storytelling tools. This will cost you $8.25 per user per month with an annual commitment.

The Office 365 Business Premium plan, on the other hand, combines all the features of the two plans above into one integrated subscription for $12.50 per user month with an annual commitment.

All of the preceding plans have a 300-user limit, but they include

Guaranteed 99.9 percent uptime, financially backed service level agreement

IT-level web support and 24/7 phone support for critical issues

Active Directory integration to easily manage user credentials and permissions

World-class data security

Breaking down the Office 365 enterprise plans

There are four enterprise Office 365 plans ranging from $8 per user per month to $35 per user per month. You can have a variety of enterprise subscriptions plans based on the needs of your users. There is no limit to the number of users on the enterprise plans.

Table 1-1 lists the cost (per user, per month) for the subscription and the key features associated with each of these plans.

TABLE 1-1 Enterprise Plans Pricing Model

Office 365 Enterprise (per user, per month)	E1 ($8)	Pro Plus ($12)	E3 ($20)	E5 ($35)
Fully installed Office applications on up to 5 PCs or Macs per user (Office Pro Plus)		✓	✓	✓
Office on tablets and phones for the fully installed Office experience on up to 5 tablets and 5 phones per user		✓	✓	✓
Online versions of Office, including Word, Excel, and PowerPoint	✓	✓	✓	✓
File storage and sharing with 1 TB storage per user (OneDrive for Business)	✓	✓	✓	✓
Business class email, calendar, and contacts (Exchange Online)	✓ 50 GB inbox per user		✓ unlimited inbox	✓ unlimited inbox
Unlimited online meetings, IM, and audio, HD video, and web conferencing (Skype for Business)	✓		✓	✓
Intranet site with customizable security settings (SharePoint Online)	✓		✓	✓
Corporate social network (Yammer)	✓		✓	✓
Professional digital, interactive storytelling tool (Sway)	✓	✓	✓	✓
Personalized search and discovery across Office 365 (Delve)	✓		✓	✓
Corporate video portal (Videos)	✓		✓	✓
Meeting broadcast on the Internet to up to 10,000 people (Skype for Business)	✓		✓	✓
Discover, analyze, and visualize data in Excel		✓	✓	✓
IT management of your apps, reports of usage, and shared computer activation		✓	✓	✓
Compliance Center tools to support eDiscovery (important for your lawyers in case of litigation)	✓	✓	✓	✓
Compliance and information protection (archiving and legal hold, rights management, data loss prevention, and encryption for email and files)			✓	✓
Advanced security for your data				✓
Analytics tools to illustrate your own and your team’s productivity (Power BI and Delve Analytics)				✓
PSTN conferencing to allow invitees to join Skype for Business meetings by dialing in from a telephone				✓
Cloud PBX for cloud-based call management to make, receive, and transfer calls across a wide range of devices				✓

Taking care of the Kiosk or Deskless workers

If you own a retail chain or run a business with “deskless” workers, you don’t have to leave these workers out from the benefits of using Office 365. Deskless workers, shift workers, retail store employees, truck drivers, and similar employees who use shared PCs, have minimal collaboration requirements, and limited communication needs can be signed up with either of these plans:

The Exchange Online Kiosk plan for $2 per user per month provides access to

• Web email (2 gigabyte storage)

• Premium anti-malware protection and anti-spam filtering

• Support for sync’ing emails to smartphones

• Support for POP email clients like Comcast and Yahoo.

The Office 365 Enterprise K1 plan for $4 per user month includes all the features from the Exchange Online Kiosk plan, plus

• Corporate social network with Yammer

• SharePoint Online for document collaboration and access to intranets

• Office Online (Word, Excel, PowerPoint, and OneNote)

Addressing the needs of other types of organizations

Not all organizations are created equal. Therefore, Microsoft has created the following plans to meet the requirements of non-business organizations.

Office 365 Education

This plan offers free collaboration tools for students and teachers to enable them to work and learn together using best-in-class cloud technologies.

TIP

This is a great way to expose students to technologies they will be using in the workplace.

To take advantage of the free subscription for students and teachers, you must be verified as an academic institution, which usually takes 3-7 days. The best thing about this is that Exchange Online for email and calendar for alumni is provided as a free service even after the student graduates. Learn more about this plan at

https://products.office.com/en-us/academic/office-365-education-plan

Office 365 U.S. Government

The U.S. government has unique needs and requirements when it comes to cloud technologies. Therefore, Microsoft has created a segmented cloud community specifically designed to ensure these types of organizations meet U.S. compliance and security standards. This plan still provides all the features and capabilities of Office 365 for business, but it’s only available to qualified U.S. government organizations, including federal, state, local, and tribal governments. Learn more about this plan at

https://products.office.com/en-us/government/compare-office-365-government-plans

Office 365 Nonprofit

Qualified nonprofit organizations are eligible to receive basic Office 365 services as a donation. The Office 365 Nonprofit Business Essentials is a free plan for up to 300 users, while the Office 365 Nonprofit E1 is free with unlimited users.

If your organization needs the advanced features, you can subscribe to the Office 365 Nonprofit Business Premium for $2 per user per month or the Office 365 Nonprofit E3 for $4.50 per user per month.

Learn more about the different plans for nonprofits and the plan requirements at

https://products.office.com/en-us/nonprofit/office-365-nonprofit-plans-and-pricing