Application Capacity Management as an Inventory Management Problem

This chapter explores how just-in-time inventory management principles can be applied to lean capacity management of cloud-based applications. Traditional application service production chain reviews the factors that traditionally drove application service providers to adopt a supply-driven or push model of capacity management. Elasticity and demand-driven capacity management considers how cloud eliminates the factors that drove adoption of supply-driven, push capacity management and enable application service providers to adopt more agile demand-driven, pull-capacity management models. There are significant parallels between running an application service business and operating a number of trendy retail stores. Thinking about intangible application capacity as tangible retail merchandise that must be managed as inventory is a useful way to identify important aspects of application capacity management. Inventory management is a critical factor for a retailer, just as capacity management is a critical factor for an application service provider.