Topic: Dell

Hardware vendors prepare for the day where no one builds a data center

Summary: Why hardware giants starting to sound like Amazon Web Services? They are all facing a stark reality years from now: No one wants to build their own data centers. Data centers are meant to be outsourced to some other company or taken to the cloud.

By Larry Dignan for Between the Lines | April 8, 2011 -- 03:20 GMT (20:20 PDT)

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IBM launches its SmartCloud and plays in the public cloud computing market. Dell plots a $1 billion investment to build out a data center network to deliver infrastructure as a service. Hewlett-Packard has its blueprint for offering cloud services.

Why are all these hardware giants starting to sound like Amazon Web Services? They are all facing a stark reality years from now: No one wants to build their own data centers. Data centers are meant to be outsourced to some other company or taken to the cloud.

But wait! What about those companies that are building private clouds? Well customers may be on to the fact that private cloud really means more server purchases, more headaches and more inefficiency.

Savvis president Bill Fathers said:

"Enterprises started to build these large private clouds, but then decided to outsource or go cloud. The question becomes whether cloud can be adopted enterprise-wide. Why spend $50 billion and build your own cloud? A third of our wins over the last three quarters have come from companies that had some flavor of a private cloud."

In fact, if you talk to data center architects in the field they'll tell you that no one wants run their infrastructure. In the not-too-distant future we'll farm out data centers to either services giants---IBM and integrators like Accenture---telecom companies we're used to dealing with and hardware vendors positioned for the new world order. Today hardware vendors sell you servers. Tomorrow they will be farms that have acres of computing power that you rent or provision. And yes so-called private clouds will also be outsourced at some point.

Facebook's open source data center architecture is notable, but only applies to so-called scale up Web companies. Most enterprises don't want the extra work. These businesses are tired of being reamed on infrastructure and want a new world order.

In this world:

There's no server upgrade cycle.
You'll get your computing power from the cloud.
And IT folks clinging to their own infrastructure are going to be overruled by the rest of the C-suite.
And hardware giants will be selling to the compute farmers.

So what's a hardware company to do? Run to the cloud as fast as it can to hedge bets.

To be sure, hardware vendors are facing the same cloud-inspired turmoil as the software industry. It's no secret that every vendor from Microsoft to SAP has software as a service as a linchpin of the future.

If I were to hazard a guess, the hardware vendors that are best positioned to make the cloud transition will have a strong outsourcing and services unit. IBM will be a public cloud player, but the reality is that most enterprises will see Big Blue as a trusted partner that can catch the data center they just threw over the wall. When it comes to data centers, the mantra increasingly is "here you run this damn thing."

Hewlett-Packard has a similar vision---and a wedding cake slide to go with it---but the cloud plan needs more seasoning and detail. HP, however, also has a large services unit that will run your data center for you.

Dell has staked out an interesting position by becoming the anti-stack vendor. Dell's pitch is that it isn't looking to sell you a complete stack. Dell talks open standards and jumped on the Facebook open source data center bandwagon right away. Dell's challenge revolves around services and the ability to offer infrastructure as a service. Simply put, Dell has to build its cloud data centers.

The odd duck in this hardware equation is Oracle, which as most of you know is basically a software company. Today, Oracle is aiming to sell custom, optimized supersystems dubbed Exadata and Exalogic. If the future is open hardware specs from the likes of Facebook and commodity hardware what does that mean for Oracle? In addition, Oracle hasn't talked about offering infrastructure as a service just yet.

Add it up and there's a lot of turmoil ahead in hardware land. The next few years will reveal what players navigated the cloud curves best.

Topics: Dell, Data Centers, Hardware, Storage

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29 comments

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RE: Hardware vendors prepare for the day where no one builds a data center

We're going to need to answer the security question before this happens on any kind of scale. The huge-ass companies like JPMC, Procter Gamble, etc, have too much data that they can't let out past their firewalls and it's those guys that would fund the public cloud exodus. We see things like the Epsilon break-in (that affected Best Buy and Verizon, etc) as a manifestation of the "hurt one hurt them all" drawback to multi-tenancy. The Saavis guy was, of course, going to poo-poo private clouds becuase his business IS public louds but from where I stand (Virtualization/Cloud consultant) I see a transition from traditional low efficiency datacenters to private clouds then aggregations of private clouds then poking bits of those clouds into the public cloud (burst capacity) as hybrids before we see any significant uptake.

justthinking
8 April, 2011 06:17

Reply Vote
- RE: Hardware vendors prepare for the day where no one builds a data center
  
  @justthinking I completely agree. We are currently investigating the cloud infrastructure at my company and our biggest stumbling block is our clients (whose data we store) not wanting us to use a third party to store their data. The cloud looks really good, and something we could leverage to have smaller teams and better response times in every area. Our company is now investigating an internal cloud, but in all honesty, I don't see it working. I mean, we have multiple SAN units now, what's the difference from SAN or internal cloud? It's just a bunch of disks that we still have to pay for, maintenance, support.
  
  jaypers
  8 April, 2011 07:15
  
  Reply Vote
- RE: Hardware vendors prepare for the day where no one builds a data center
  
  @justthinking A lot of that data from major companies is already outsourced...
  
  sbhsbh
  8 April, 2011 09:34
  
  Reply Vote
  - Outsourced, but not cloud-based
    
    @sbhsbh
    
    The majority of outsourced computing is not pooled or shared, it is just located in a non-customer facility. Go into any major hosting datacenter and look at the cages that divide compartments, the network diagrams that show completely separate backbones, and the CI lists that show hardware ownership and allocation. That's not to mention that most hosting centers have much better physical security than owner premises.
    
    terry flores
    8 April, 2011 16:03
    
    Reply Vote
- RE: Hardware vendors prepare for the day where no one builds a data center
  
  @justthinking An even bigger concern is liability, the author of this article and many others don't seem to realize that when you outsource your equip you become a number. Your business concerns mean nothing compared to all mighty SLAs. Outsourcing is nice because of the money saved upfront, I've seen it cost companies dearly down the road.
  
  ITSamurai
  10 April, 2011 10:56
  
  Reply Vote
Look past the $$$ before you move

I agree. Until cloud providers can provide assurances wrt security everyone considering outsourcing to the cloud should be very, very careful. SLAs must be in writing and penalties in place if data is compromised. A simple "we regret to inform you.." letter is not sufficient compensation if you become another victum of an Epsilon like fiasco.

Google has become a verb, maybe Epsilon should be too.

dave@...
8 April, 2011 07:16

Reply Vote
- RE: Hardware vendors prepare for the day where no one builds a data center
  
  @dave@... I think you're confusing Google with the clouds. If IBM, Dell, HP et al give you SLAs why wouldn't you outsource/cloud/whatever? And was Epsilon really a cloud problem or an outsourcer that got hacked.
  
  Larry Dignan
  8 April, 2011 08:28
  
  Reply Vote
  - RE: Hardware vendors prepare for the day where no one builds a data center
    
    @Larry Dignan An outsourcer that got hacked is a cloud problem if customers are effected. If you outsource IT related services, and there are issues, those are Cloud issues. Same bucket. That's the perception, and the perception rules here. Game, Set, and Match...
    
    sbhsbh
    8 April, 2011 09:28
    
    Reply Vote
RE: Hardware vendors prepare for the day where no one builds a data center

Fads come and go. Once reality and common sense overcome the hype of "cloud computing", which in fact is nothing new architecturally, then you will see such 3rd party hosting shrivel up. The vast majority of businesses can have a complete, fully-redundant, high availability data, middleware, and web center in one to three rack boxes. The picture of the big room you show only affects a tiny percentage of companies. Simply wheel it in, plug-in the power, the Internet connections (2 for redundancy), and turn it on. A good engineer can build these for resale with a reasonable markup, and use the 800 pound gorilla (security) as the primary marketing tool. I built a couple of these years back with Windows 2000, some Dell servers, and Cisco network equipment. Data, middleware, web servers - with load balancing and full redundancy. You could lose a server, a disk, a RAM chip, a network card - anything - and the user's experience never indicated it. Given that India (a prime hosting site) and Pakistan are never more than one hissy-fit from nuclear war, do you really want to chance putting your data and source code there where it can be vaporized? Given that hosting your data and/or source code anywhere outside the US means they are not subject to US law (and would most likely be protected by the bribed government officials in that country), do you really feel secure? A company can sell these turnkey rack boxes, and provide remote service and support, in varying degrees) as an annual fee. Sorry, but any executive who chooses to go "to the cloud", unless they are hosting the cloud internally or at a US site where they rent space for their own equipment, should be fired for malfeasance or just plain incompetence.

MSBassSinger
8 April, 2011 07:51

Reply Vote
- Independance and self-sufficiency
 
 To me this whole cloud computing hype, while probably economically advantageous for a lot of customers, seems to introduce to a much higher degree the principle of dependence and loss of control. Once you have moved everything to the cloud, you will have to stay a paying customer for ever, of one cloud service or the other. If this is another country, you increase the economic 'marriage' between countries: if one country falls, the other does too. Also, if one country is, say, violating human rights, you can do nothing about it, because you have to keep them friendly at all costs. Of course, this is already the situation in world economics to a very large degree.
 
 It doesn't seem like wise to me at all.
 
 kouzen
 8 April, 2011 10:33
 
 Reply Vote
 - RE: Hardware vendors prepare for the day where no one builds a data center
 
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- RE: Hardware vendors prepare for the day where no one builds a data center
 
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- RE: Hardware vendors prepare for the day where no one builds a data center
 
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 nplmilk
 5 October, 2011 09:04
 
 Reply Vote
A day that isn't going to come

"Hardware vendors prepare for the day where no one builds a data center" LOL. Okay, right, we're all going to give up on the cloud, or what? "They are all facing a stark reality years from now: No one wants to build their own data centers." LOL. Well, somebody has to build them, or they don't exist at all. Unless you're trying to say we've given up on the cloud and the Internet altogether (which I doubt). We should really start teaching basic logic in school. "In fact, if you talk to data center architects in the field theyll tell you that no one wants run their infrastructure." Because a "data center architect" is interested in making the data center bigger, of course. Either that, or they really haven't asked very many people, especially not those who have a vested interest in maintaining some type of secret information (corporations with trade secrets, three letter gov't agencies, the military, hospitals, etc). Claiming you have good security policies isn't enough for a lot of businesses - if those who maintain data centers want to be trusted enough for sensitive data, they're going to have to be able to provide proof they are indeed practicing the security practices they claim to uphold. "And yes so-called private clouds will also be outsourced at some point." Some will, some won't. Calling everything inevitable is basically denying reality. The biggest problem with large, outsourced data centers is security. It's EVERYBODY's eggs in one basket. It takes one employee not following procedure, one disgruntled worker at the center, one sloppy mistake, one super-smart hacker with a targeted attack - and it all falls down like a house of cards. Hate to say it, but it's already happening. RSA, COMODO, Epsilon? Umm, yeah. As more people use "the cloud," the more the hackers are gonna be targeting the providers. And as much as they have dedicated teams and whatnot trying to maintain security - well, nothing is flawless, and if somebody finds even the smallest flaw in the armor, it can have consequences that reach everybody. It is just a fact that the larger reach a single entity has, the larger the risk of disastrous consequences when (not if) the security is breached. . . . and that's why you will never, ever see 100% cloud. Ever. It's too great a risk. The top security in many places relies on the idea of minimizing the impact of released information by dividing it up and compartmentalizing it, not by keeping it all in one place. If you want to maintain the utmost of confidentiality and security, you never have all of the information in one place. You don't want everything to be released if the worst happens.

CobraA1
8 April, 2011 08:27

Reply Vote
- "when (not if)"
 
 @CobraA1
 This.
 
 x I'm tc
 8 April, 2011 09:05
 
 Reply Vote
- RE: Hardware vendors prepare for the day where no one builds a data center
 
 @CobraA1
 Um. Okay, follow this bouncing ball:
 "Calling everything inevitable is basically denying reality."
 and
 ". . . you will never, ever see 100% cloud. Ever."
 and
 "We should really start teaching basic logic in school."
 bahahahaha
 
 moebiusloop
 8 April, 2011 10:20
 
 Reply Vote
 - RE: Hardware vendors prepare for the day where no one builds a data center
 
 @moebiusloop Basically I said that the cloud was not inevitable, which does not contradict the claim "Calling everything inevitable is basically denying reality" (which is a bit of hyperbole anyways). Yeah, basic logic. Do you need a Venn diagram to understand it?
 
 CobraA1
 9 April, 2011 00:38
 
 Reply Vote
One Size Usually Does Not Fit All

Something to keep in mind. It my opinion it is likely that some functionality will be retained while some may move to the cloud. Smaller companies may be able to do it more easily if they don't need as broad of a set of services as a larger company.

jkohut
8 April, 2011 08:39

Reply Vote
RE: Hardware vendors prepare for the day where no one builds a data center

You never breathed a word about Apple in your entire article. They are about to fire up a huge data center of their own where they will service their millions of customers running their various hardware devices. I think that smart companies will always have their own data systems which they control, so they can service the customers better. Currently at least Apple is one of the smartest tech companies if not the smartest the company in the world.

How many millions of copies of the iTunes software have been downloaded? Apple services all these with all kinds of contents and software. Once they get their data center running, they will most likely give Netflix a run for their money by going into the content subscription business. There should also be big improvements to their mobile me storage services.

arminw
8 April, 2011 08:48

Reply Vote
Cloud computing will be the new age Corvair ...

where managers doing a cost benefit analysis decided that paying off the families of people who burned to death in fault Corvairs was cheaper than paying the $10 for parts to fix the problem in all the cars. Every manager that did the cost benefit analysis of the Epsilon outsourcing is now facing the reality of a similar fiasco.

The question is have they or any of the management teams learned anything. This article would seem to indicate that they haven't.

ronald.warden@...
8 April, 2011 09:11

Reply Vote