CIOs are getting out of the Data Center business

More than three years ago, a proclamation was made (by myself, Mark Thiele and Jan Wiersma) that the data center was dead. Ironically, all three of us come from an IT background of running data centers within IT organizations.

At the time, it was an event in London, England where the attendees were utterly dumbfounded by such a statement. Keep in mind that this event was also a data center specific event. To many this statement was an act of heresy.

But the statement had truth and the start of a movement already at foot. Ironically, companies in leading roles were already starting down this path. It was just going to take some time before the concept became common thinking. Even today, it still is not common thinking. But the movement is starting to gain momentum. Across the spectrum of industries from healthcare to financial services, CIO’s and their contemporaries are generally making a move away from data centers. Specifically, moving away from managing their own, dedicated corporate data centers.

Enterprise data center assets

And by data center, we are talking about the physical critical facility and equipment that is the data center. We are not talking about the servers, storage or network equipment within the data center facility. These data center assets (the facility) are moving into a new phase of maturity. While still needed, companies are realizing that they no longer need to manage their own critical facilities in order to provide the level of service required.

Moving along the spectrum

As companies look at alternatives to operating their own data centers, there are a number of options available today. For many years, colocation, or the renting of data center space, was the only viable option for most. Today, the options for colocation vary widely as do alternatives in the form of cloud computing. Companies are moving along a spectrum from traditional corporate data centers to public cloud infrastructure.

 

DataCenterCloudSpectrum

It is important to note that companies will not move entire data centers (en masse) from one mode to another. The specific applications, or workloads, will spread across the spectrum with some number leveraging most if not all of the modes. Over time, the distribution of workloads shifts toward the right and away from corporate data centers.

In addition, even those moving across the spectrum may find that they are not able to completely reduce their corporate data center footprint to zero for some time. There may be a number of reasons for this, but none should preclude an effort to reduce the corporate data center footprint.

Additional cloud models

For clarity sake, Platform as a Service (PaaS) and Software as a Service (SaaS) are intentionally omitted. Yet, both ultimately play a role in the complexity of planning a holistic cloud strategy. As with any strategy discussion, one needs to consider many factors beyond simply the technology, or in this case facility, when making critical decisions.

Starting with colocation

Last year, I wrote a blog titled “Time to get on the colocation train before it is too late.” The premise was foretelling the impending move from corporate data centers to colocation facilities. While colocation facilities are seeing an uptick in interest, the momentum is only now starting to build.

For many IT organizations, the first step along the spectrum is in moving from their corporate data center to colocation. Moving infrastructure services from one data center to another is not a trivial step, but a very important one. Moving a data center will test an IT organization in many ways that highlight opportunities for improvement in their quest to ultimately leverage cloud computing. One of those is in their ability to fully operate ‘lights out’ or without the ability to physically enter the data center. The reason is that unlike the corporate data center that was down the hall, a colocation facility may physically be 1,000 miles away or more!

Where to go from here

Plan, plan, and plan. Moving a data center can take months to years even with aggressive planning. Start by thinking about what is strategic, differentiating and supports the corporate strategy. Consider the options that exist in both the colocation and cloud marketplace. You might be surprised how far the colocation marketplace has evolved in just the past few years! And that is just the start.

The opportunities for CIO’s and their IT organization are plentiful today. Getting out of the data center business is just one of the first moves that more and more CIO’s are starting to take. Move where it makes sense and seize the opportunity. For those already down this path, the results can be quite liberating!

 

Originally posted @ Gigaom Research 11/10/14

http://research.gigaom.com/2014/11/cios-are-getting-out-of-the-data-center-business/

Is the cloud unstable and what can we do about it?

Originally posted @ Gigaom Research 9/29/2014

http://research.gigaom.com/2014/09/is-the-cloud-instable-and-what-can-we-do-about-it/

 

The recent major reboots of cloud-based infrastructure by Amazon and Rackspace has resurfaced the question about cloud instability. Days before the reboot, both Amazon and Rackspace noted that the reboots were due to a vulnerability with Zen. Barb Darrow of Gigaom covered this in detail here. Ironically, all of this came less than a week before the action took place, leaving many flat-footed.

Outages are not new

First, let us admit that outages (and reboots) are not unique to cloud-based infrastructure. Traditional corporate data centers face unplanned outages and regular system reboots. For Microsoft-based infrastructure, reboots may happen monthly due to security patch updates. Back in April 2011, I wrote a piece Amazon Outage Concerns are Overblown. Amazon had just endured another outage of their Virginia data center that very day. In response, customers and observers took shots at Amazon. However, is Amazon’s outage really the problem? In the piece, I suggested that customers were misunderstanding the problem when they think about cloud-based infrastructure services.

Cloud expectations are misguided

As with the piece back in 2011, the expectations of cloud-based infrastructure have not changed much for enterprise customers. The expectation has been (and still is) that cloud-based infrastructure is resilient just like that within the corporate data center. The truth is very different. There are exceptions, but the majority of cloud-based infrastructure is not built for hardware resiliency. That’s by design. The expectation by service providers is that application/ service resiliency rests further up the stack when you move to cloud. That is very different than traditional application architectures found in the corporate data center where infrastructure provides the resiliency.

Time to expect failure in the cloud

Like many of the web-scale applications using cloud-based infrastructure today, enterprise applications need to rethink their architecture. If the assumption is that infrastructure will fail, how will that impact architectural decisions? When leveraging cloud-based infrastructure services from Amazon or Rackspace, this paradigm plays out well. If you lose the infrastructure, the application keeps humming away. Take out a data center, and users are still not impacted. Are we there yet? Nowhere close. But that is the direction we must take.

Getting from here to there

Hypothetically, if an application were built with the expectation of infrastructure failure, the recent failures would not have impacted the delivery to the user. Going further, imagine if the application could withstand a full data center outage and/ or a core intercontinental undersea fiber cut. If the expectation were for complete infrastructure failure, then the results would be quite different. Unfortunately, the reality is just not there…yet.

The vast majority of enterprise applications were never designed for cloud. Therefore, they need to be tweaked, re-architected or worse, completely rewritten. There’s a real cost to do so! Just because the application could be moved to cloud does not mean the economics are there to support it. Each application needs to be evaluated individually.

Building the counterargument

Some may say that this whole argument is hogwash. So, let us take a look at the alternative. If one does build cloud-based infrastructure to be resilient like that of its corporate brethren, it would result in a very expensive venture at a minimum. Infrastructure is expensive. Back in the 1970’s a company called Tandem Computers had a solution to this with their NonStop system. In the 1990’s, the Tandem NonStop Himalayan class systems were all the rage…if you could afford them. NonStop was particularly interesting for financial services organizations that 1) could not afford the downtime and 2) had the money to afford the system. Consequently, Tandem was acquired by Compaq who in turn was acquired by HP. NonStop is now owned by HP as part of their Integrity NonStop products. Aside from Tandem’s solutions, even with all of the infrastructure redundancy, many are still just a data center outage away of impacting an application. The bottom line is: It is impossible to build a 100% resilient infrastructure. That is true either due to 1) it is cost prohibitive and 2) becomes a statistical probability problem. For many, the value comes down to the statistic probably of an outage compared with the protections taken.

Making the move

Over the past five years or so, companies have looked at the economics to build redundancy (and resiliency) at the infrastructure layer. The net result is a renewed focus on moving away from infrastructure resiliency and toward low-cost hardware. The thinking is: infrastructure is expensive and resiliency needs to move up the stack. The challenge is changing the paradigm of how application redundancy is handled by developers of corporate applications.

5 things to prepare the CIO for disruption

Originally posted @ Gigaom Research 9/22/2014

http://research.gigaom.com/2014/09/5-things-to-prepare-the-cio-for-disruption/

 

For years, IT organizations operated in a certain way. They provided a relatively standard service in a particular way. Of course, both of these evolved incrementally year over year. Over the past 5-10 years, that direction has changed pretty significantly. And it shows no sign of stopping anytime soon.

Data Center

10 years ago, if one said ‘death of the data center’ in a room of IT leaders, it would be seen as heresy. Today, IT leaders are actively looking for ways to ‘get out of the data center business.’ If you are one of the corporate environments not already thinking about this strategy, you are behind the curve. No longer is a physical data center a representative requirement to operate IT. Today, many options from colocation to cloud Infrastructure as a Service (IaaS) exist to replace this functionality. Not only does it exist, many solutions are already mature and more sophisticated than traditional approaches within the corporate data center.

Organization

At the other end of the spectrum, the organization is undergoing a significant shift too. Traditional organizations thought of their ‘customers’ as the internal users of the organization. The focus was predominantly on the internal operations of the company. Development may have spanned externally to partners and customers, but in specific ways. IT organizations are shifting to determine who their ‘customers’ really are. The shift in thinking starts with a change in focus. And that focus is one of the preparations.

Partnerships

The way IT organizations interacted with ‘customers’ was typically as two different organizations. The discussion typically included a distinction between IT and ‘the business.’ To some, this appears as an us-and-them perspective. The two were seen as very different and therefore required a different level of partnering within the company. At the same time, IT needed to clearly understand how ‘the business’ operated and at times translate between business requirements and IT deliverables. Part of the changes over time created a means to clarify this partnership. However, changes to the perspective assist with the introduction of disruptive methodologies. For example, Shadow IT, to some a threat, can become a real asset.

Changes in customers and users

Consumption expectations for customers and users changed as well. Consumers became more technologically savvy and demanded more. Overnight, consumers become familiar, and more comfortable with solutions quicker than IT organizations could adopt them. The technology available to consumers rapidly became more sophisticated. The combination of these two drove a change in consumer behaviors. Consumers, and customers became more demanding of technology…and by extension, corporate IT.

Getting ready for disruption

So, how does the CIO respond to these changes in a timely and meaningful manner? Start at the top and work down. That means, start with a business-centric approach that takes the perspective of the true customer (the company’s customer) and work your way down.

  1. Business-Centric Perspective: Change the culture and perspective to focus on a business-centric approach. Stop focusing on IT as a technology organization. The CIO needs to be a business leader that happens to have responsibility for technology. Not the other way around. Instill this change within the IT organization that is both meaningful but also helps staff adapt to the changing landscape. This will take time, but must be a mission for IT.
  2. Adopt DevOps: A fundamental premise behind DevOps is the ability for IT to work more holistically across traditional silos (applications & operations). Brining the teams together to work collaboratively and effectively is essential to the future IT organization and their customers.
  3. Stay Flexible & Responsive: Customers expect quicker response to change. Instead of building a fortress that will withstand the test of time, build one that will adapt to the changing business climate and requirements.
  4. Engage Cloud: Cloud is the single largest opportunity for IT organizations today. Plan a holistic strategy to leverage cloud in appropriate ways. For many this will look like a hybrid strategy that evolves over time versus a haphazard approach.
  5. Challenge the Status Quo: Lastly, do not assume that the way things were done in the past will work moving forward. Many organizations struggle to find success with newer methodologies because they apply past paradigms. In some ways, it is almost easier to forget the past and think about how to start from scratch. Momentum can provide some resistance, but it is healthy to challenge the status quo.

Each of these steps provides a different perspective that helps shift the thinking around IT. It starts with the CIO and involves both the IT organization and the business organizations outside of IT. Each of these five steps provides the change in perspective to evolve the IT organization and value it provides.

Seven Things the CIO should consider when adopting a holistic cloud strategy

Originally posted @ Gigaom Research 8/25/14

http://research.gigaom.com/2014/08/seven-things-the-cio-should-consider-when-adopting-a-holistic-cloud-strategy/

 

As conversations about cloud computing continues to focus on IT’s inability at holistic adoption, organizations outside of IT continue their cloud adoption trek outside the prevue of IT. While many of these efforts are considered Shadow IT efforts and frowned upon by the IT organization, they are simply a response to a wider problem.

The IT organization needs to adopt a holistic cloud strategy. However, are CIOs really ready for this approach? Michael Keithley, Creative Artists Agency’s CIO just returned from CIO Magazine’s CIO 100 Symposium which brings together the industry’s best IT leaders. In his blog post, he notes that “(he) was shocked to find that even among this elite group of CIOs there were still a significant amount of CIOs who where resisting cloud.” While that perspective is widely shared, it does not represent all CIOs. There are still a good number of CIOs that have moved to a holistic cloud strategy. The problem is that most organizations are still in a much earlier state of adoption.

In order to develop a holistic cloud strategy, it is important to follow a well-defined process. The four steps are straightforward and fit just about any organization:

  1. Assess: Provide a holistic assessment of the entire IT organization, applications and services that is business focused, not technology focused. For the CIO, they are a business leader that happens to have responsibility for technology. Understand what is differentiating and what is not.
  2. Roadmap: Use the options and recommendations from the assessment to provide a roadmap. The roadmap outlines priority and valuations that ultimately drive the alignment of IT.
  3. Execute: This is where the rubber hits the road. IT organizations will learn more about themselves through action. For many, it is important to start small (read: lower risk) and ramp up quickly.
  4. Re-Assess & Adjust: As the IT organization starts down the path of execution, lessons are learned and adjustments needed. Those adjustments will span technology, organization, process and governance. Continual improvement is a key hallmark to staying in tune with the changing demands.

For many, following this process alone is not enough to develop a holistic cloud strategy. In order to successfully leverage a cloud-based solution, several things need to change that may contradict current norms. Today, cloud is leveraged in many ways from Software as a Service (SaaS) to Infrastructure as a Service (IaaS). However, it is most often a very fractured and disjointed approach to leveraging cloud. Yet, the very applications and services in play require that organizations consider a holistic approach in order to work most effectively.

When considering a holistic cloud strategy, there are a number of things the CIO needs to consider including these six:

  1. Challenge the Status Quo: This is one of the hardest changes as the culture within IT developed over decades. One example is changing the mindset that ‘critical systems may not reside outside your own data center’ is not trivial. On the other hand, leading CIOs are already “getting out of the data center business.” Do not get trapped by the cultural norms and the status quo.
  2. Differentiation: Consider which applications and services are true differentiators for your company. Focus on the applications and services that provide strategic value and shift more common functions (ie: email) to alternative solutions like Microsoft Office 365 or Google Apps.
  3. Align with Business Strategy: Determine how IT can best enable and catapult the company’s business strategy. If IT is interested in making a technology shift, consider if it will bring direct positive value to the business strategy. If it does not, one should ask a number of additional questions determining the true value of the change. With so much demand on IT, focus should be on those changes that bring the highest value and align with the business strategy.
  4. Internal Changes: Moving to cloud changes how organizations, processes and governance models behave. A simple example is how business continuity and disaster recovery processes will need to change in order to accommodate the introduction of cloud-based services. For organizations, cloud presents both an excitement of something new and a fear from loss of control and possible job loss. CIOs need to ensure that this area is well thought out before proceeding.
  5. Vendor Management: Managing a cloud provider is not like every other existing vendor relationship. Vendor management comes into sharp focus with the cloud provider that spans far more than just the terms of the Service Level Agreement (SLA).
  6. Exit Strategy: Think about the end before getting started. Exiting a cloud service can happen for good or bad reasons. Understand what the exit terms are and in what for your data will exist. Exporting a flat file could present a challenge if the data is in a structured database. However, that may be the extent of the provider’s responsibility. When considering alternative providers, recognize that shifting workloads across providers is not necessarily as trivial as it might sound. It is important to think this through before engaging.
  7. Innovation: Actively seek out ways to adopt new solutions and methodologies. For example, understand the value from Devops, OpenStack, Containers and Converged Infrastructure. Each of these may challenge traditional thinking, which is ok.

Those are seven of the top issues that often come up in the process of setting a holistic cloud strategy. Cloud offers the CIO, the IT organization and the company as a whole one of the greatest opportunities today. Cloud is significant, but only the tip of the iceberg. For the CIO and their organization, there are many more opportunities beyond cloud today that are already in the works.

Death of the Data Center

Back in 2011, Mark Thiele (@mthiele10), Jan Wiersma (@jmwiersma) and I shared the stage at a conference in London, England for a panel discussion on the future of data centers. The three of us are founding board members with Data Center Pulse; an industry association of data center owners and operators with over 6,000 members that span the globe.

Our common theme for the panel: Death of the Data Center. Our message was clear and poignant. After decades of data center growth, a significant change was both needed and on the horizon. And this change was about to turn the entire industry in its head. The days of building and operating data centers of all shapes, sizes and types throughout the world was about to end. The way data centers are consumed has changed.

Fast forward the clock to 2014, a different conference (ECF/ DCE) and a different city (Monte Carlo, Monaco). The three of us shared the stage once again to touch on a variety of subjects ranging from SMAC to DCIM to the future of data centers. During my opening keynote presentation on the first day, I referred back to our statement from three years earlier professing “Death of the Data Center.”

Of course, making this statement at a Cloud and Data Center conference might have bordered on heresy. But the point still needed to be made. And it was more important today than ever. The tectonic shift we discussed three years in London was already starting to play out. Yet, the industry as a whole was still trying to ignore the fact that evolution was taking over. And by industry I’m referring to both internal IT organizations along with data center and service providers. How we look at data centers was changing and neither side was ready to admit change was afoot.

The Tectonic Data Center Evolution

During the economic downturn in 2008 and 2009, a shift in IT spending took place. At the same time, cloud computing was truly making its own entrance. Companies of all sizes (and their IT organizations) were pulling back their spending and rethinking what ‘strategic spending’ really meant. Coming into focus was the significant costs associated with owning and operating data centers. The common question: Do we still really needed our own data center?

This is a tough question to consider for those that always believed that data, applications, and systems needed to be in their own data center in order to be 1) manageable and 2) secure. Neither of those hold true today. In fact, by many accounts, the typical enterprise data center is less secure than the alternatives (colocation or cloud).

The reality is: This shift has already started, but we are still in the early days. Colocation is not new, but the options and maturity of the alternatives is getting more and more impressive. The cloud solutions that are part of a data center’s ecosystem are equally impressive.

Data Center Demand

Today, there is plenty of data center capacity. However, there is not much new capacity being built by data center providers due to the fear of over capacity and idle resources. The problem is, when the demand from enterprises starts to ramp up. It takes years to bring a new data center facility online. We know the demand is coming, but when. And when it does, it will create a constraint on data center capacity until new capacity is built. I wrote about this in my post Time to get on the Colocation Train Before it is Too Late.

Are Data Centers Dying?

In a word, are data centers going away? No. However, if you are an enterprise running your own data center, expect a significant shift. At a minimum, the size of your existing data center is shrinking if not completely going away. And if you are in an industry with regulatory or compliance requirements, the changes still apply. I have worked with companies some of the most regulated and sensitive industries including Healthcare, Financial Services and Government Intelligence Communities. All of which are considering some form of colocation and cloud today.

Our point was not to outline a general demise of data centers, but to communicate an impending shift in how data centers are consumed. To some, there was indeed a demise of data centers coming. However, to others, it would generate significant opportunity. The question where are you in this equation and are you prepared for the impending shift?

Where Does Rackspace Go From Here?

In the past week, the conversation around cloud computing has pulled the spotlight toward Rackspace (NYSE: RAX). Today alone, the stock is trading up 20%. So, why all attention in an otherwise mixed field of great innovators and steady stalwarts? A story in the Wall Street Journal suggests that Rackspace has hired Morgan Stanley to help evaluate options.

That story alone has generated a considerable amount of fodder on the blogosphere and Twitter streams. In addition, there was considerable chatter at this week’s OpenStack Summit in Atlanta.

Internal Competition

Rackspace’s historical ‘bread and butter’ comes from managed hosting and their legendary fanatical support. Then comes along cloud computing, Rackspace’s cloud offerings and a few acquisitions. The problem is that their traditional hosting services and cloud offerings could easily compete with each other. While some will quickly deny this point, the reality is that enterprises moving up the value chain will inevitably move from traditional managed hosting services to cloud offerings. The challenge is that the revenue and cost model for each is very different. In essence, the shift from managed services to cloud offerings will create a drop in revenue without further augmentation in either new customers or additional services.

The OpenStack Factor

Rackspace was an early, and significant, contributor to OpenStack. OpenStack is open source software that presents a strong contender for companies looking to build private and public clouds. In the past 6-12 months alone, OpenStack has received significant support from across the technology industry.

As an early supporter and major contributor to OpenStack, Rackspace got tagged as playing a heavy-handed role in controlling OpenStack’s development. Right or wrong, at the time there was a dearth of corporate leadership at the level Rackspace was playing. So, Rackspace pulled back and others quickly filled in. The question being posed is: Did Rackspace potentially pull back too far?

Today, the picture is quite a bit different. There are a number of major technology companies that have embraced OpenStack and are significant contributors. The question at the OpenStack Summit was whether OpenStack could benefit from a corporate leader helping drive the movement. If so, that could bring things full circle. The question is, with Rackspace’s deep bench of experience and involvement in OpenStack, could they be that leader?

Potential Suitors

Many have noted the potential suitors if Rackspace is contemplating sale. Brandon Butler of Network World mentioned some of the notables in his Cloud Chronicles post. Among those is a familiar cast of characters from technology’s elite.

So, what does all this really mean? Bottom Line: It’s anyone’s guess. But I have a theory.

The Private Advantage

I suspect one option may be to take the company private in order to provide some breathing room to retool. The shareholders of publicly traded companies are a fickle bunch. They’re looking for improvements in revenue and shareholder equity every single quarter. Miss a quarter and watch the stock price drop precipitously.

Sure, a company could make the necessary changes while flying as a publicly traded company. But that would require incremental change to minimize the impact to revenue. As such, it would be a slow and tedious dance in an otherwise dynamic and quickly changing industry. Not exactly a match made in heaven.

Going private would provide Rackspace some breathing room during a dip in revenue while the company retools to take advantage of the assets they have. During that time, they could realign their hosting and cloud businesses to take full advantage of their existing customer base while leading them through their maturing from traditional services to cloud.

Bottom Line

Time is not a kind mistress and I suspect Rackspace sees both the opportunity and the writing on the wall. However, the changes must come quickly as time is a constant and not redeemable.

Top 5 Posts of 2013

Over the course of 2013, I wrote a number of posts about CIOs, Cloud Computing, Big Data, Data Centers and IT in general. Here are the top-5 most popular posts in 2013:

5. Time to get on the Colocation Train Before it is Too Late

In the number 5 spot is a post addressing the forthcoming challenges to the data center colocation market and how the ripple effect hits IT.

4. A Workload is Not a Workload, is Not a Workload

Number 4 is a post written in 2012 about the discrepancy between cloud computing case studies. Not all workloads are the same and many of the examples used do not represent the masses.

3. The IT Role in Value Creation is Not a Technology

The number 3 spot goes to a post that addresses the direction of IT organizations within the business and how it is evolving. It is this very evolution that is both very difficult and very exciting at the same time.

2. Motivation And Work Ethics: Passion Fuels the Engine

Another post from 2012 goes to the number 2 spot, which shows that some subjects (like: the importance of passion) have staying power. This post addresses important characteristics for a leader to consider. It addresses the intersection of passion, work ethic and motivation.

1. What is Your Cloud Exit Strategy?

Probably one of the most controversial titles goes to the number 1 spot. This post addresses the challenges faced with cloud when one doesn’t think about their end-state and evolution.

Honorable Mention: So Which Is It? Airplane Mode or Turn Devices Completely Off?

Back in Apr 2012, I was traveling and noticed that many didn’t turn off their devices even though they were instructed to…which prompted the post. Even though the FAA changed their rules in US, this post still gets quite a bit of attention.

CIO Predictions for 2014

This year, I thought I would shift the focus from cloud-specific to the broader agenda for CIOs. But before I jump into my predictions for 2014, let’s take a trip down memory lane and review how I did on Cloud Predictions for 2013.

How did I do?

  1. Rise of the Cloud Verticals: We have seen an uptick of ‘cloud brokers’ but very little in the way of cloud verticals targeting specific industries or suite of services. There has been a feeble attempt at integration between solutions, but even that was lukewarm at best in 2013. (1/2pt)
  2. Widespread Planning of IaaS Migrations: Spot on with this one! Over 2013, the number of IT organizations planning IaaS migrations stepped up in a big way. That’s great news for the IT organization, the business units and the industry as a whole. It demonstrates progress along the maturity continuum. (1pt)
  3. CIO’s Look to Cloud to Catapult IT Transformation: This has been a mixed bag. Many have leveraged cloud because they were forced into it rather than see it as one of the most significant opportunities of our time. There are exceptions to this, but they are not as prominent yet. (1/2pt)
  4. Mobile Increases Intensity of Cloud Adoption: Mobile is taking off like wildfire. And cloud is enabling the progress, as traditional methods would simply be too challenging and slow. (1pt)
  5. Cloud Innovation Shifts from New Solutions to Integration & Consolidation: Over 2013, the number of new solutions has progressed at a feverish pitch. The good indicator is that new solutions are taking into account the requirement of integration with solutions within their ecosystem. While consolidation within cloud providers started to pickup in the 2nd half of 2013, I would expect it to increase into 2014. (1pt)

Total Score: 4/5

Overall, slower general adoption of cloud paired with strong adoption of specific cloud solutions lead to 2013’s progress. I had hoped to see us further along…but alas, 2014 is shaping up to be a very interesting year.

What to look for in 2014?

  1. Cloud Consolidation: Look for plenty of M&A activity as larger incumbents gobble cloud point solutions up. Also look for incumbents to flesh out their ecosystem more fully.
  2. CIOs Focus on Data: Conversations move beyond the next bell or whistle and onto items that really change the economic landscape for a company: data. Look for the CIO to shift focus to data and away from infrastructure.
  3. Colocation is in Vogue: As the CIO moves up the maturity model toward higher-value functions, look for IT organizations to move to colocation in droves. The challenge will be moving before it’s too late.
  4. CIO, CMO + Other Execs Become Best Friends: We’ve talked for some time about how the CIO strives for a ‘seat at the table’. The challenge is in how to be a relevant participant at the table. As the CIO role shifts from support org to business driver, look for the relationships to change too.
  5. One Size Does NOT Fit All: As we talk about newer technologies, CIOs, IT organizations, vendors and service providers get realistic about where their products/ services fit best…and don’t. OpenStack and HP Moonshot are great examples of awesome solutions that fit this statement.

As I’ve said before, this has got to be the best time to work in Information Technology. How will you embrace and leverage change? Here’s to an awesome 2014!

Time to get on the Colocation Train Before it is Too Late

The data center industry is heading toward an inflection point that has significant impact on enterprises. It seems many aren’t looking far enough ahead, but the timeline appears to be 12-18 months, which is not that far out! The issue is a typical supply chain issue of supply, demand and timelines.

A CHANGE IN THE WINDS

First, let’s start with a bit of background… The advent of Cloud Computing and newer technologies, are driving an increase in the number of enterprises looking to ‘get out of the data center business. I, along with others, have presented many times about ‘Death of the Data Center.’ The data center, which used to serve as a strategic weapon in an enterprise IT org’s arsenal, is still very much critical, but fundamentally becoming a commodity. That’s not to say that the overall data center services are becoming a commodity, but the facility is. Other factors, such as the geographic footprint, network and ecosystem are becoming the real differentiators. And enterprises ‘in the know’ realize they can’t compete at the same level as today’s commercial data center facility providers.

THE TWO FLAVORS OF COLOCATION

Commercial data center providers offer two basic models of data center services: Wholesale and Retail. Digital Realty and DuPont Fabros are examples of major wholesale data center space and Equinix, Switch, IO, Savvis and QTS are examples of major retail colocation providers. It should be noted that some providers provide both wholesale and retail offerings. While there is a huge difference between wholesale and retail colocation space, I will leave the details on why an enterprise might consider one over the other for another post.

DATA CENTER SUPPLY, DEMAND AND TIMELINES

The problem is still the same for both types of data center space: there is a bit of surplus today, but there won’t be enough capacity in the near term. Data center providers are adding capacity around the globe, but they’re caught in a conundrum of how much capacity to build. It typically takes anywhere between 2-4 years to build a new data center and bring it online. And the demand isn’t there to support significant growth yet.

But if you read the tea leaves, the demand is getting ready to pop. Many folks are only now starting to consider their options with cloud and other services. So, why are data center providers not building data centers now in preparation for the pop? There are two reasons: On the supply side, it costs a significant amount of capital to build a data center today and having an idle data center burns significant operational expenses too. On the demand side, enterprises are just starting to evaluate colocation options. Evaluating is different from ready to commit spending on colocation services.

Complicating matters further, even for the most aggressive enterprises, the preparation can take months and the migrations years in the making. Moving a data center is not a trivial exercise and often peppered with significant risk. There are applications, legacy requirements, 3rd party providers, connections, depreciation schedules, architectures, organization, process and governance changes to consider…just to name a few. In addition to the technical challenges, organizations and applications are typically not geared up to handle multi-day outages and moves of this nature. Ponder this: When was the last time your IT team moved a critical business application from one location to another? What about multiple applications? The reality is: it just doesn’t happen often…if at all.

But just because it’s hard, does not mean it should not be done. In this case, it needs to be done. At this point, every organization on the planet should have a plan for colocation and/or cloud. Of course there are exceptions and corner cases, but today they are few and shrinking.

COMPLIANCE AND REGULATORY CONCERNS

Those with compliance and regulatory requirements are moving too…and not just non-production or Disaster Recovery systems. Financial Services organizations are already moving their core banking systems into colocation. While Healthcare organizations are moving their Electronic Health Records (EHR) and Electronic Medical Record (EMR) systems into colocation…and in some cases, the cloud. This is in addition to any core legacy and greenfield applications. The compliance and regulatory requirements are an additional component to consider, not a reason to stop moving.

TIME CHANGES DATA CENTER THINKING

Just five years ago, a discussion of moving to colocation or cloud would have been far more challenging to do. Today, we are starting to see this migration happening. However, it is only happening in very small numbers of IT firms around the globe. We need to significantly increase the number of folks planning and migrating.

DATA CENTER ELASTICITY

On the downside, even if an enterprise started to build their data center strategy and roadmap today, it is unclear if adequate capacity to supply the demand will exist once they’re ready to move. Now, that’s not to say the sky is falling. But it does suggest that enterprises (in mass) need to get on the ball and start planning for death of the data center (their own). At a minimum, it would provider data center providers with greater visibility of the impending demand and timeline. In the best scenario, it provides a healthy ecosystem in the supply/ demand equation without creating a rubber-band effect where supply and demand each fluctuate toward equilibrium.

BUILDING A ROADMAP

The process starts with a vision and understanding of what is truly strategic. Recall that vitally important and strategic can be two different things. Power is vitally important to data centers, but data center providers are not building power plants next to each one.

The next step is building a roadmap that supports the vision. The roadmap includes more than just technological advancements. The biggest initial hurdles will come in the form of organization and process. In addition, a strong visionary and leader will provide the right combination skills to lead the effort and ask the right questions to achieve success.

Part of the roadmap will inevitably include an evaluation of colocation providers. Before you get started down this path, it is important to understand the differences between wholesale and retail colocation providers, what they offer and what your responsibilities are. That last step is often lost as part of the evaluation process.

Truly understand what your requirements are. Space, power and bandwidth are just scratching the surface. Take a holistic view of your environment and portfolio. Understand what and how things will change when moving to colocation. This is as much a clear snapshot of your current situation, as it is where you’re headed over time.

TIME TO GET MOVING

Moving into colocation is a great first-step for many enterprises. It gets them ‘out of the data center’ business while still maintaining their existing portfolio intact. Colocation also provides a great way to move the maturity of an organization (and portfolio) toward cloud.

The evaluation process for colocation services is much different today from just 5 years ago. Today, some of the key differentiators are geographic coverage, network and ecosystem. But a stern warning: The criteria for each enterprise will be different and unique. What applies to one does not necessarily apply to the next. It’s important to clearly understand this and how each provider matches against the requirements.

The process takes time and effort. For this and a number of other reasons, it may take months to years even for the most aggressive movers. As such, it is best to started sooner than later before the train leaves the station.

Further Reading:

Applying Cloud Computing in the Enterprise

Cloud Application Matrix

A Workload is Not a Workload, is Not a Workload

HP Converged Cloud Tech Day

Last week, I attended HP’s Converged Cloud Tech Day in Puerto Rico. Fellow colleagues attended from North, Latin and South America. The purpose of the event was to 1) take a deep dive into HP’s cloud offerings and 2) visit HP’s Aguadilla location, which houses manufacturing and an HP Labs presence. What makes the story interesting is that HP is a hardware manufacturer, a software provider and a provider of cloud services. Overall, I was very impressed by what HP is doing…but read on for the reasons why…and the surprises.

HP Puerto Rico

HP, like many other technology companies, has a significant presence in Puerto Rico. Martin Castillo, HP’s Caribbean Region Country Manager provided an overview for the group that left many in awe. HP exports a whopping $11.5b from Puerto Rico or roughly 10% of HP’s global revenue. In the Caribbean, HP holds more than 70% of the server market. Surprisingly, much of the influence to use HP cloud services in Puerto Rico comes from APAC and EMEA, not North America. To that end, 90% of HP’s Caribbean customers are already starting the first stage of moving to private clouds. Like others, HP is seeing customers move from traditional data centers to private clouds to managed clouds to public clouds.

Moving to the Cloud

Not surprisingly, HP is going through a transition by presenting the company from a solutions perspective rather than a product perspective. Shane Pearson, HP’s VP of Portfolio & Product Management explained that “At the end of the day, it’s all about applications and workloads. Everyone sees the importance of cloud, but everyone is trying to figure out how to leverage it.” By 2015 the projected markets are: Traditional $1.4b, Private Cloud $47b, Managed Cloud $55b, Public Cloud $30b for a cloud total of $132b. In addition, HP confirmed Hybrid Cloud approach as the approach of choice.

While customers are still focused on cost savings as the primary motivation to move to cloud, the tide is shifting to business process improvement. Put another way, cloud is allowing users to do things they could not do before. I was pleased to hear HP offer that it’s hard to take advantage of cloud if you don’t leverage automation. Automation and Orchestration are essential to cloud deployments.

HP CloudSystem Matrix

HP’s Nigel Cook was up next to talk about HP’s CloudSystem Matrix. Essentially, HP is (and has been) providing cloud services across the gamut of potential needs. Internally, HP is using OpenStack as the foundation for their cloud service offering. But CloudSystem Matrix provides a cohesive solution to manage across both internal and external cloud services. To the earlier point about automation, HP is focusing on automation and self-service as part of their cloud offering. Having a solution that helps customers manage the complexity that Hybrid Clouds presents could prove interesting. Admittedly, I have not kicked the tires of CloudSystem Matrix yet, but on the surface, it is very impressive.

Reference Architecture

During the visit to Aguadilla, we joined a Halo session with HP’s Christian Verstraete to discuss architecture. Christian and team have built an impressive cloud functional reference architecture. As impressive as it is, one challenge is how to best leverage such a comprehensive model for the everyday IT organization. It’s quite a bit to chew off. Very large enterprises can consume the level of detail contained within the model. Others will need a way to consume it in chunks. Christian goes into much greater depth in a series of blog entries on HP’s Cloud Source Blog.

HP Labs: Data Center in a Box

One treat on the trip was the visit to HP Labs. If you ever get the opportunity to visit HP Labs, it’s well worth the time to see what innovative solutions the folks are cooking up. HP demonstrated the results from their Thermal Zone Mapping (TZM) tool (US Patent 8,249,841) along with CFD modeling tools and monitoring to determine details around airflow/ cooling efficiency. While I’ve seen many different modeling tools, HP’s TZM was pretty impressive.

In addition to the TZM, HP shared a new prototype that I called Data Center in a Box. The solution is an encapsulated rack system that supports 1-8 racks that are fully enclosed. The only requirement is power and chilled water. The PUE numbers were impressive, but didn’t take into account every metric (ie: the cost of chilled water). Regardless, I thought the solution was pretty interesting. The HP folks kept mentioning that they planned to target the solution to Small-Medium Business (SMB) clients. While that may have been interesting to the SMB market a few years ago, today the SMB market is moving more to services (ie: Cloud Services). That doesn’t mean the solution is DOA. I do think it could be marketed as a modular approach to data center build-outs that provides a smaller increment to container solutions. Today, the solution is still just a prototype and not commercially available. It will be interesting to see where HP ultimately takes this.

In Summary

I was quite impressed by HP’s perspective on how customers can…and should leverage cloud. I felt they have a healthy perspective on the market, customer engagement and opportunity. However, I was left with one question: Why are HP’s cloud solutions not more visible? Arguably, I am smack in the middle of the ‘cloud stream’ of information. Sure, I am aware that HP has a cloud offering. However, when folks talk about different cloud solutions, HP is noticeably absent. From what I learned last week, this needs to change.

HP’s CloudSystem Matrix is definitely worth a look regardless of the state of your cloud strategy. And for data center providers and service providers, keep an eye out for their Data Center in a Box…or whatever they ultimately call it.