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exactly how many rooms there are and hence the total capacity of the building (in the case
of the cloud environment, the capacity of the infrastructure). Because resources in a cloud
environment are dynamically allocated to each tenant's entitlement requirements, the over-
all capacity would vary, but at least you have a good estimate of how many more license
entitlements can be given before you would need to expand the infrastructure again to sup-
port more tenants.
This is why many service providers offer different choices for licensing their services and
they vary in price and resource entitlement. It depends solely on the type of cloud service being
delivered. This is usually the case for SaaS and IaaS vendors, and hypervisor solutions sold by
companies like VMware and Microsoft are geared toward creating such environments.
Specific limits must then be established for specific service tiers or entitlements.
Hard Limit A hard limit is a limit that cannot be circumvented in any way. It is a hard-
coded limit that is always imposed until the provider says otherwise. For example, there
used to be a 32 GB hard limit for supported host memory in the VMware ESXi 5.1 free
version. Anything more than 32 GB of memory will be ignored because of the imposed
hard limit.
Soft Limit A soft limit is something that is not absolute; you can actually go over a soft
limit, but there are usually fines, penalties, or extra charges imposed. The most common
resource with this sort of limit is bandwidth. When you have exceeded your soft limit for
bandwidth, you will be charged for every additional resource used.
Reservations
Resource allocation in cloud computing, as we have discussed, is usually not defined
because there are many algorithms that can be used to dynamically allocate unused (though
previously reserved) resources when they are required. For memory, the usual process is
called ballooning, which is basically a set amount of RAM that has to be retrieved from
various guest OSs without their actual consent.
Licensing
Licensing in cloud computing is similar to enterprise licensing. Customers have to pay
for a set of features and products, and it is the primary source of business revenue for
cloud operators. For example, VMware provides a free version of its hypervisor, which
is good enough in a very basic sense but would never be enough in a production environ-
ment. In turn, those that license the cloud software infrastructure from VMware create
the actual cloud environment together with the hardware infrastructure, so they could
bring an actual multitenant cloud to customers who license and use the resources, ser-
vices, and infrastructure being provided.
Resource Pooling
Computer resources can be divided into three categories: compute, networks, and storage. We
treat the resources we have in a cloud infrastructure as resource pools. We view resources as
a sum, or a single large pool, such as when we say that a host has 128 gigabytes of RAM or
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