Operations is a Strategic Weapon

Operations is a
Strategic Weapon

Friday, October 7, 2011 1

DTO Solutions


We do process improvement and automated infrastructure for companies who build and
operate revenue producing services... e-commerce, ﬁnancial services, gaming

Are you an ...

aaS

-Are you an ass?
-What kind of ass are you? Golly gee.. really.. who gives a shit...
-Ironically all this “cloud” discussions focus around the wrong letter.
----------------------------------------
-What does amazon and netﬂix get that barnes and noble and blockbuster doesn’t ?
_aaS (circle the "S")

-Over the next 45 minutes I am going to try and convince you that companies that fcous on the behind Devops are the best
solution to address the "S" in your aaS

Are you an ...

[spi] aaS

-Are you an ass?
-What kind of ass are you? Golly gee.. really.. who gives a shit...
-Ironically all this “cloud” discussions focus around the wrong letter.
----------------------------------------
-What does amazon and netﬂix get that barnes and noble and blockbuster doesn’t ?
_aaS (circle the "S")

-Over the next 45 minutes I am going to try and convince you that companies that fcous on the behind Devops are the best
solution to address the "S" in your aaS


-How many ppl are familiar with the metaphor used in softw dev called “TD”?
-In softw dev you typally have two choices get it done quick and take hit of future issues or
spend to time on a cleaner design, but will take longer to put in place.
-Quick typically p with a technical debt, which is similar to a ﬁnancial debt.interest payments,
which come in the form of the extra effort that we have to do in future development because
of the quick and dirty design choice.
-
-Most of you are probably familiar with “Software” TD
-I am going to tell you a story about “Infrastructure TD”


-How many ppl know who these guys are?
-The dudes who invented Facebook.. rght?
-However, this was not there ﬁrst venture.
-Green vs Red Widgits compnay story.
-After many arguments the both decide to split up. Cameron to make green widgets and Tyler
decides to make red widgets.
-They both go to their father each ask for a 1m dollars and the father asks how much money
are you going to make. They both say 10 million.
-Father calculates the ROR to be 900% and gives em each 1m.
10-1 = 9/1 = 900%
-However one of them lied.... The red widgets only return 233%
10-1-2 = 7/3 = 233%

Green vs Red
Widgits

1 Million 1 Million
2 Million No TD
10 Million Proﬁt 10 Million Proﬁt
10 - 3 = 7/3 10 - 1 = 9/1
233% ROR 900% ROR


It Gets Worse...

Technical Vicious Toxic
Terminal
Debt Cycle Operations


- It gets even worse. Isreal Ghat of the Cutter Group call the vicious cycle of TD.
- You wind up fixing a lot of things that you didn’t fix in the first place..
- this pulls more resources from delivery good service and compound effect is that you are spending more and more
resources that you should have gotten right the firs time..
- but ever worse the effect of customer satisfaction starts loosing more business and the “V” cycle is out of control.
- TD->VTD->Toxic operations->Terminal

- I call this are you running a business or building a business?
- Toxic operations. Amertrade/etrade story

Tale of Two Startups


- Jesse Robbins my ex boss and CEO of Opscode/Chef did a great post on O’rielly rdar a few years ago called the Tale of
Two Startups.
- The chart looked like this ﬁrst 4 weeks.
- First chart legacy (I call it the non devops startup/project)
- Second Chart is the (secret sauce startup ... #devops)
- I played around with this using “R” to be cool and I came up with a=140% ROR and 700% ROR

The Meat to Math Ratio

http://radar.oreilly.com/2011/08/meat-to-math-ratio.html


- Alistar Croll has a great post called the meat to math ratio.
- Amazon had $12.95B in Q410 revenues and 33,700 employees, revenue per employee of $384,273.
- For Barnes & Noble: Barnes & Noble: $1.91B in Q410 revenues, and 35,000 employees, meaning a revenue per employee
of $54,571.
- Netﬂix: $444M in Q409 revenues, and 1,000 employees, meaning a revenue-per-employee of $444,000.
- Blockbuster: $400M in Q409 revenues. The company peaked at 60,000 employees i
- Dropbox: In Q211 Dropbox had $25M in revenues, and 74 employees, for a revenue per employee of $338K.

When do they call?


We started asking ourselves some questions about our clients and our work for them

When do they call?
A. First signs of issues brewing

B. Initial negative impact felt by some

C. Heads are on ﬁre



When do they call?

10% A. First signs of issues brewing

30% B. Initial negative impact felt by some

65% C. Heads are on ﬁre



Why did they wait?

#1 Answer:


Aside from human nature to procrastinate?
translation... “you and or the problem you are telling me about isn’t worth the money”

Why did they wait?

#1 Answer:
“Couldn’t get budget approval
or business support”


Aside from human nature to procrastinate?
translation... “you and or the problem you are telling me about isn’t worth the money”

Operations has a perception problem



Business View

Necessary Cost



Business View Ops View

vs

Necessary Cost Strategic Weapon


First Law of Business Spending

Things that Things that
cost you money make you money

Make no mistake about it... someone is spending money on you... and they are asking
themselves... do I cut it, outsource it, or spend more on it.

Change the Perception of Ops

vs

Necessary Cost Strategic Weapon


Operations becomes a strategic weapon


If we are going to make the business case that operations is a strategic weapon... and we
need to do it in language that they understand.
Business care about innovation (ideas that resonnate with customers) and getting the best
return on their money... Let’s look at the ﬁrst point... continuously increasing velocity of
innovation


When you are continuously...


innovation



1. Increasing velocity of innovation


innovation




2. Increasing return on investment


innovation

Result
Ah-ha!


Core process of any business

Ah-ha! Ka-ching!


Now of course you hope that result is one that resonates with customers

Ah-ha!


But for many reasons it more often than not goes the other way

Velocity of Innovation...

Ah-ha! Ka-ching!

Day 0 Day n


That cycle time... getting from idea to result is one of the most critical metrics for both a
startup and an established service. And the bulk of this time is spent in the application
lifecycle across dev, QA, and operations.

Companies were able to
achieve somewhat defensible
positions based on
technology...


Companies were able to
achieve somewhat defensible
positions based on
technology... then came the
web


Then along came this thing called the web and screwed it all up... now your customers are
coming to you through a standard interface --the browser-- over standard published
protocols. You competition is only a few keystrokes away. The even applies in newer
distribution channels like mobile apps and their app stores.

How do we compete now?


So how do we compete in this commoditized world?
1. Scale... scale of users, scale of data, scale of compute power
2. Velocity of innovation... how fast can you react to and execute on new market forces or
opportunities.

Scaling is the most straight forward problem to solve. It’s a known problem with a lot of
known solutions to borrow from. Hire smart architects... let them follow best practices...
throw a big pile of cash at it and there aren’t many scaling problems you can’t solve.
Obviously that’s somewhat of a simpliﬁcation... but I’ll let someone else’s presentation get
into the details


1. Scale


opportunities.

into the details


1. Scale
2. Velocity of Innovation


opportunities.

into the details

Innovation is really a numbers game...

Ah-ha! Ka-ching!

Ah-ha!


The global innovation success rate across all geographies and industries

Innovation is really a numbers game...

4%*

Ah-ha! Ka-ching!

94%*
Ah-ha!

*Study by Doblin Innovation Consultants

The global innovation success rate across all geographies and industries

How to win a numbers game...

Company A

Result
Ah-ha!

Company B

Result Result Result Result
Ah-ha! Ah-ha! Ah-ha! Ah-ha!


Put it this way... if in the time it takes you to get through one cycle, your competitor can get
through 4... who do you think will be more competitive??

How to win a numbers game...

Company A

Result
Ah-ha!

Company B

Result Result Result Result
Ah-ha! Ah-ha! Ah-ha! Ah-ha!


This is why the notion of a “burn rate” is a meaningless statistic. Say you have enough cash in
the bank to pay for x number of months. That doesn’t tell you anything... do you have 10
shots at making customers happy or just 1? Think about it like a carnival game. If you have
ten balls to throw at the target and someone else only has 1... who has a better probability of
success?

How fast can ops move?
• Production deployment every 11.6
seconds (weekday)

• 1,079 deployments in one hour (record)
• ~0.001% of deployments actually cause an
outage

http://news.ycombinator.com/item?id=2971521


Jon Jenkins at Velocity
Ops is amazon’s strategic weapon... their books aren’t better, their storage isn’t better, their
hypervisor isn’t better.
Everyone copies them but their just keep rolling out features and lowering costs faster than
their competitors can do either

Business is already thinking about this...

Customer Development Model


But can the biz move fast enough? They already are wanting to do so
Customer Development




2. Improving return on investment



•I got into a Twttier argument that went like this...
• See “Cloud Gone Wrong”

Clouds Gone Wild

Busine
s s
Dev

AWS
business s3put s3
ssh
ideas !
apache/php Rightscale
memcached
mysql


-So letʼs start the story in the begining... Biz guy got a great idea for a service.

-They used a classic web2.0 app architecture: apache/php, memcached & mysql.
Development done on a single server
-Production ran on EC2 and they used rightscale server templates
-Release done by pushing code and assets to s3 buckets and then running a parallel SSH
scripts to distribute them
-This approach seemed to work... They got up to a few hundred nodes pretty fast.. business
was cooking

apache/php
p arty,
3rd s3
memcached
& are AWS mysql
w
mi ddle
Rightscale

yum
Business
apache/php puppet
memcached
mysql apache/php
s3
AWS s3 memcached
AWS mysql
Rightscale
Rightscale
s3put s3put
ssh ssh

Business2 Business3

-First service was such a huge success they decided to launch other sevices
-So they ”Copy and pasted” the whole architecture and lifecycle to launch the new businesses
-Each new group pushed assets to s3, scripted the distribution, and hacked the rightscripts and
templates
-Things were obviously getting more complicated, so they did what they were supposed to do
and added centralized tooling like puppet and yum
-They thought they were doing things the cloud way and that all would be ﬁne

“As-is”
operations server
templates

TAR
RPM restarts

TAR
TAR
code,
EC2
content pupp
deploys et RS
app RS deployment
devs deployment
S3

yum
repo
Provision-time builds

reconfigs

TAR EXE
TAR AUTO
server
TOOLS
code templates
TAR
RPM
middleware
devs platform CONTROL PROVISION RELEASE

system
eng


First we got the team on the whiteboard to map out the “as is” picture. This is a, believe it or
not, a simplified version of that.
Some of the highlights...
-First youʼll notice that different groups had their own path to production... different methods of
control, provisioning, and release.
-Each group and role seemed to have a different way to editing or storing config
-There were differing ways of packaging software... sometimes it might be a .tar.gz other times
it might be an RPM.
-Shockingly... Some things were even being built directly on production servers.
-There was no authoritative source of information is maintained about nodes, application
topology, software versions, etc....

Tec
hnic
al


Infrastructure Deveopment Life Cycle
Everything starts
here
SVN

hud agent cfg
yum pup
son repo pet

packages
active users run packages

directory deck
commands
nag splunk
ios
resource model

sys cfg

right instance create
scale

events
new node Node a log data

CONTROL PROVISION RELEASE


I wonʼt go into too much detail about the tooling that was put into place to support all of this but
here are some highlights..
-took a loosely coupled toolchain approach... using mostly open source tools
-This became their standard stack of “operations middleware”. Of course, we are all used to
the notion of application middleware... but to an online service, the management infrastructure
is just as much a part of the service as the application itself.
-This operations middleware stack is a ﬁrst class citizen along with application stack and it all
goes through the same SDLC... everything is versioned, built, deployed, and packaged via the
same process
-Once in place, this middleware provides a single path for releasing, provisioning, and
controlling anything that goes into an environment.

95% 5%

Necessary Liability Strategic Weapon


DevOps Cafe

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I also do a podcast with the famous cloud and IT management guru john willis.
Interview based series where we talk to all kinds of movers and shakers across the
development and operation spectrum.

Between DTO and doing the devops cafe content I get to talk to a lot of companies and see
what’s working and what isn’t working.

Let’s Talk....

@botchagalupe

john@dtosolutions.com


We do this stuff all day long for a lot of large and cutting edge clients... and we love talking
about DevOps so drop me a line anytime if you want to talk

Let’s Talk....

@botchagalupe dev2ops.org

john@dtosolutions.com


We do this stuff all day long for a lot of large and cutting edge clients... and we love talking
about DevOps so drop me a line anytime if you want to talk

Extra Slides


C
A
M
S

First get you mind around what you are looking for... Simple framework for categorizing
DevOps problems and solutions.

Culture
Automation
Measurement
Sharing

Operations is a Strategic Weapon

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