Can tech giants talk you out of your datacentre?

• Tags:
• Compliance,
• Privacy,
• Utility Computing,
• Cloud Computing

Jason Hiner

Published: 03 Jul 2009 12:01 BST

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Several big technology vendors are racing to build a fleet of big datacentres that will enable them to offer more internet-based services to consumers and enterprises over the next five to 10 years. Jason Hiner looks at why they think they will be able to talk you out of running your own datacentre.

The race for your datacentre has begun. Google, Microsoft and Amazon are leading a global datacentre build-out that has not been slowed by the current economic recession and that over next decade will change the face of consumer computing and IT departments.

These companies are building worldwide datacentre capacity at a breakneck pace because they want to be ready with enough capacity to handle the two big developments preparing to transform the technology world:

• Cloud computing — applications and services delivered over the internet
• Utility computing — on-demand server capacity powered by virtualisation and delivered over the internet

With both of these trends, the biggest target is private datacentres.

The first of these trends, cloud computing, wants to run the large commoditised applications (such as mail, groupware and CRM) so IT departments do not have to run them from private datacentres.

Utility computing wants to take over server capacity for private services and applications, using virtualisation to seamlessly scale up and scale down those services so an organisation only has to pay for the bandwidth and server capacity it uses. Today, most IT departments pay for maximum capacity at all times with very low utilisation, and risk downtime at peak times if their systems get overloaded because they have not planned for enough capacity at the high end.

It makes sense that Microsoft and Google would want to enter this market. Microsoft runs a lot of the server software to power the back office, while Google has expertise in running datacentres to power the internet.

Amazon's place here may appear odd to some, since the company started as an online book seller and has evolved into the web's biggest mega-retailer. However, Amazon has arguably become the current market leader in utility computing by using the knowledge it gained in building the infrastructure for its e-commerce business and turning it into Amazon Web Services, in which it rents server capacity to other companies. In 2008, chief executive Jeff Bezos even revealed that Amazon Web Services now uses more bandwidth than Amazon.com (see Figure 1).

I also expect IBM and HP to join the party. While neither is being noticed for building new datacentres the way Google, Microsoft and Amazon are, both are in the midst of massive, multi-year datacentre consolidations, and it is possible that they are quietly building lots of extra capacity as part of the projects. HP has been a long-time proponent of utility computing, while IBM recently gave a public endorsement of cloud computing.

All these vendors will argue that they can save businesses from overprovisioning and overspending on server capacity, while also adding 24/7 monitoring, scalable load management and a high level of IT service management. Of course, the trade-off is that IT departments will have to give up some control — and usually some staff.

This is essentially an outsourcing arrangement in which IT turns over a chunk of its operations to a third party. Many companies will be fine with that, since IT is probably not one of their core competencies. They will welcome third-party expertise and be happy to find a new way to control IT costs.

However, other IT departments and organisations will be more reluctant to turn over their services, applications and company data to a vendor.

Last week when Google announced that Google Apps now uses Microsoft's Outlook as a client, members of ZDNet UK's sister site, TechRepublic, were asked: 'Would you trust Google with your company's Exchange Server data?'.

"I'm not sure it wouldn't land you in prison in many countries for violation of various laws on privacy and data security," wrote Deadly Earnest, an IT consultant in Australia.

"In the UK, the Data Protection Act states that you must be able to disclose the location of your data — for example, at any given moment you at least know what the country is," wrote Tom-Tech, a UK software developer. "I'm pretty sure Google doesn't do this, as they aren't exactly forthcoming with the locations of their datacentres and the data belonging to a specific company probably shifts between a few of them anyway."

Zeplenith, an IT manager in Virginia, asked: "Where is the data stored? Are they SAS-70 certified?"

As such, security, privacy and compliance remain big hurdles that cloud and utility computing must overcome. Nevertheless, vendors should be well aware of these hurdles, and will be working with governments, regulators and standards agencies to develop services that are fully compliant.

We can also expect vendors to trip over each other trying to prove which has the stronger security and privacy policies, because they know these factors are important. It will not happen overnight, but these obstacles are likely to be overcome. The companies involved have invested too much — and IT has too much to gain from a cost and management perspective — for these issues not to be resolved.

The bottom line
For governments, large financial institutions and other high-security environments, outsourcing the datacentre will probably never make sense. But for virtually every other organisation, it will become an attractive option over the next five years. A decade from now, IT departments will need a strong business case to justify the existence of a private datacentre.

The build-outs currently underway are evidence that we are moving towards this scenario at speed, and IT leaders should begin experimenting with low-priority apps and workloads, as well as thinking ahead about which parts of utility computing will present the biggest challenges.

Credit: Will Microsoft, Google and Amazon talk you out of your data center? from TechRepublic.com

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