Are we ready to declare the "time of death" for the enterprise data center?

Are we ready to declare the "time of death" for the enterprise data center?

Summary: The announcement this week of the launch of Amazon’s Elastic Block Store (EBS) adds another vital piece to the cloud computing picture. The announcement is particularly significant since it takes the gloves off when it comes to meeting the demanding needs of enterprise class computing requirements. The Elastic Block Store finally makes it practical, cost effective, easy to perform traditional storage and processing of very large amounts of data in the cloud from a credible vendor.


The announcement this week of the launch of Amazon's Elastic Block Store (EBS) has added another vital piece to the overall cloud computing picture. The EBS announcement is particularly significant since it takes the gloves off when it comes to meeting the demanding needs of enterprise class computing requirements. We can now source our software, computing, storage, and applications where it makes the most overall sense.The Elastic Block Store finally makes it practical, cost effective, and relatively easy to put traditional storage and processing of very large amounts of data in the cloud from a credible vendor.

While Amazon has been offering extremely inexpensive, highly flexible, on-demand computing power over the Internet for several years, up until now their Elastic Compute Cloud (EC2) had a maximum associated storage capacity of less than two terabytes or required the use of their powerful but non-standard storage services, either S3 or SimpleDB. More significantly, though Elastic Compute cloud instances had decent amounts of storage for some organizations, they could not load up and run in a practical amount of time, on-demand. The Elastic Block Store now makes it possible to have dozens, and potentially hundreds, of terabytes of readily-accessible persistent network storage in a traditional format of choice, particularly relational databases, all at commodity prices.

Enterprise Cloud Computing and The Future of the Data Center

The Elastic Block service also considers reliability and backups first class citizens (as do enterprises) and effectively offers all storage in a replicated, RAID-like environment. EBS also has an innovative snapshot capability that allows block storage to be imaged quickly onto S3, so that a time-sequenced set of backups can be created and made available whenever needed for restores.

Amazon's CTO, the esteemed Werner Vogels, took a deep dive into the Elastic Block Service on his blog this week.

Economies of Scale: The New Cloud Commodity

Amazon has been consistent about the purpose of its infrastructure Web services from the beginning; they are committed to redefining the economics of computing by using their massive infrastructure to achieve best-of-breed economy of scale. In this, they have been quite successful and the numbers tell the story...

The new Elastic Block Service has a similar pricing model to Amazon's other infrastructure services and you pay only for what is used. At 10 cents per gigabyte per month for storage and 10 cents per million I/Os (cached reads/writes are essentially free), 10 TB of completely utilized storage (i.e. filled with business data) with round the clock use by 5,000 enterprise users performing an average of 10,000 I/O requests per hour would result in a bill of only $4,600 per month. This is a remarkable figure and shows the economies of scale that Amazon is prepared to offer to organizations willing to leverage it.

The advent of a true commodity cloud computing solution that allows the operation of traditional computing applications of choice, a capable backup strategy, major economic advantages, combined with a vendor that has proven stability and a long-term future, and the result is a recipe for serious change in how enterprise computing can be achieved for many organizations.

Jeff Schneider, CEO of SOA firm MomentumSI, posited to me today that recent developments make the writing on the wall clear: We might just be ready to declare the "time of death" for the enterprise data center, and I'm hard pressed to disagree, even if it will take most organizations 2-5 years to realize it.

Now, don't get me wrong, I don't expect most organizations to move wholesale to services like EC2 + EBS immediately, far from it. For one thing, enterprises are notoriously slow moving and risk averse when it comes to major IT changes. And certainly there will be a great deal of early skepticism from many quarters about such a strategic shifts, some of which will be valid and much of which will not be. But it's fairly clear that the classical multi-hundred thousand square foot proprietary data center is a dinosaur of another age, like mainframes are for most organizations today.

Objecting to Outsourcing the Data Center

Though most businesses are quite comfortable in using external utility services for electricity, water, and Internet access -- and we even use banks to hold and pool our money with others "offsite" -- we are still largely unready to move computing off-premises, no matter what the advantages. The classic challenges stand in the way, including proving out how to secure, manage, trust, govern, and fully exploit the benefits that cloud computing can offer. Worse, we have to do the hardest thing of all, change the way we think and work. Fortunately, the advent of Software as a Service (SaaS) has helped pave the way for Platform-as-a-Service and we're frequently readier than we think.

One of the core principles of Web 2.0 is "Software Above the Level of a Single Device." This has taught us the strategic value of 3rd party open APIs, widgets, and many other forms of 2.0 era distributed computing in the cloud. Today, the best applications tend to use resources from the best source, wherever it lies on the network. Whether that's a Google Map widget using Google's vast server farm and location data or a SugarCRM instance running on EC2 and EBS matters not. Increasingly, we can now source our software, computing, storage, and applications where it makes the most overall sense.

For several years now, business leaders have wanted to open up their organizations strategically to the cloud. Cloud computing can theoretically make make this more manageable and less impactful on the overall enterprise by providing access to almost unlimited on-demand, partitioned resources so that SOAs can be more federated, distributed, and scalable.

And at this point in the very early stages of the cloud computing era, that's probably the best way to look at it. Because I'm not advocating that we mindless push all our computing requirements out to the cloud to reap simple economic benefits, the discussion is far more strategic than that. However, we do owe it to ourselves and our businesses to seriously consider the benefits of locating our computing environments in the right place where it makes the most sense with a full sense of the various considerations that impact us. When we do this, however, the equation will inevitably balance out more and more towards outsourcing much of our data centers.

Core IT applications such as HRM, CRM, and ERP as well as line-of-business application may seem like the last that will go to a cloud model. But while they certainly won't be the first, they may actually not be far behind when IT managers weigh the total overal benefits, particularly during an upgrade cycle. If there will be a lag, it will likely be in the upper tiers of the Fortune 500, where the sheer size and complexity of the IT landscape will impose it's own delays. Thus, the traditional data center won't disappear overnight, but it will almost certainly shrink on a regular basis from now on.

Finally, it should be pointed out that software products are often years ahead of the market. This is no different with cloud computing and many vendors have actually been in the space for years now. But the relentless forces of commoditization and competition are having their say as well and cloud computing offers up very substantial bottom-line returns. Throw in an economic downturn and a round of enterprise cost-cutting and the market and cloud computing seem ready to meet.

Be sure to read Enterprise Cloud Computing Gathers Steam to see how the cloud computing/PaaS space is rapidly filling out from a vendor perspective.

Are you looking at cloud computing for your enterprise? Why or why not? And what are you planning to do?

Topics: Amazon, Cloud, Hardware, Storage

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  • Cheap

    How is cloud computing cheaper for huge corporations?
    • Never mind pesky EULAs and licensing...

      If it's similar to using Photoshop's web edition, that states anything you use with their product becomes THEIR property, even cloud computing's theoretical silver lining won't bother to show up.

      Ownership society. This "standardization" and "assimilation" also puts too many eggs in one basket. Not to mention the LACK OF tweaking it to fit unique needs of various organizations.

      Some might call it "socialism" too. :D
    • Pretty simple. Google and Amazon manage millions of computers at data

      centers around the world. Even a large enterprise will have a hard time matching the cost. They will have an even harder time matching the peak performance, and the ability to double the processing power and/or storage on demand for just one week.
  • No enterprises are using...

    the cloud for things like this. Only individuals and small companies that don't want to pay for there own internal IT.

    In fact, bloggers are the only people even using enterprise and cloud in the same sentence. The enterprise certainly isn't.
    • Re: No enterprises are using...


      Some time ago, Jeff Barr, lead Amazon Web Services evangalist, noted that their fastest growing revenue stream was from large financial services companies. Sounds enterprise to me.
      • Your bank and credit card records

        Do you really want your bank and credit card records out there with Amazon?
        Uncle Caleb
        • They already are!

          What a silly comment! In fact, anyone that you have EVER send a check to has all the information they need (unique signature, bank account number, bank routing number) to suck your account dry until you hear that slurping sound. Put it this way... I can fit the name, account number and zip code (all needed to process a charge is the zip code and account number) for everyone in the US on one tiny SD card. I remember back in the day when I was leaving a bank with a 9-track magnetic tape (the one you always see in the movies) I had to have all sorts of permission. Well, those tapes hold only 200 megabytes. So, the chip in my treo can hold 80 tapes! Can you imagine back in 1990 a guy walking out of a bank with 80 tapes? that might get some attention. Now, of course, it is invisable. And the hard drive from a laptop? You can store a full page of information for every living person in the US.
          But, why even bother with all that, why not instead transmit the data via Verizon or 3G to a waiting server?
          All scary stuff. So, the moral of the story is:
          1) Amazon and many other companies already have many credit card numbers, bank accunt info, and much more of yours. The fact that they store that or have bank info directly is meaningless
          2) Stealing from a bank is much easier than you could imagine. Most polities and procedures in banks are to make everyone feel good and to generate a certain amount of fear. Someone clever can get the goods, and get it out, without a problem.
          • No, they're not.

            Amazon does not have my bank account number on file. I've never provided it to them. The issue isn't individuals choosing whether or not to give their information to a vendor. It's about enterprises outsourcing their data to third parties.

            "Put it this way... I can fit the name, account number and zip code (all needed to process a charge is the zip code and account number)"

            You're ignoring the core issue, which is that one must first gain access to the original data itself.
            The fact that you are able to store large amounts of data does not itself pose a security risk.

            Think about a kid shoplifting. The size of the backpack is not the problem, it's the act of stealing in the first place.

            As soon as a malefactor is able to connect to and retrieve confidential data, it's game over.

            The question is, who do you trust with your data, ahd more importantly, do you automatically trust a third party just because someone else does?
    • You might be suprised at the list of enterprises using Salesforce for

      instance. That is the complete application, not just the platform.
  • Application vendors will flock to EC2

    I wrote a post today that reflects one of the real opportunities created by EBS: the ability of anyone with a Linux application to quickly and easily create a subscription-based cloud offering. Get ready for a flood of press releases with something like "XXX is proud to announce the availability of XXX YYY 2.4, Cloud Edition. This fully functional version of YYY is available on a subscription basis in the highly respected Amazon Web Services compute cloud. Billing is via DevPay, and is YY? per transaction/gigabyte/hour."
    • That model will get a lot of traction. Heck, you can even build the service

      from open source components.
  • Some are thinking too large

    Most large companies outsource a lot of their computing to companies like IBM and EDS and those contracts are worth BILLIONS. A large portion of those contracts are simply to provide computers and software to all of their employees.

    EDS holds the largest number of Microsoft licenses because of all the images they install for major companies.

    What happens to EDS's bottom line when companies get those images directly from Microsoft?

    Technologists are making the same mistake that marketers often do. There's more than one way to spin a product around capabilities/attributes.
    • not quite

      Yes, they provide thousands of client desktop/notebooks with MS licenses, but corporate data centers are providing more than just MS licenses on client desktops.

      - disaster recovery planning and backup hot sites, for example: when hurricane Katrina was on its way across the Gulf heading toward New Orleans, major clients were relocated to alternate data centers within hours and far in advance of it hitting the Louisiana coast.
      - electronic vaulting of vital records - many corporations are required to retain various records 7, 10 years or permanently.
      - multiple mainframe images running virtually on the same physical box

      Also, corporate data centers are smaller now, because "mainframes" are now as small as servers. I read an article sometime back that, today, if you go into a computer room of a large corporation with both mainframes and servers, you could hardly tell the difference between them.

      When I see stories like this about the death of the mainframe, it shows that the writer does not have a very realistic idea of the size and complexity of just one Fortune 500 corporations IT infrastructure.
  • Like I Said to Bill

    In the late 80's Bill Gates was still just another 'guy' in Seattle. He still showed up to local events as a featured speaker. At one of those events, during a small gathering around him afterward I asked, "When are you going to separate the data your applications create from the applications themselves?" He said, "I don't understand your question."

    This is the same situation. Technologists don't understand the question.

    The answers are in the question. IT needs to start asking better questions.
  • Premature death pronouncement

    Another controversy laid title at ZDnet. Actually, you cannot compare utilities to data storage services, since data storage service is nowhere near the reliability level of utilities. And ofcourse there is much more in reliability of data storage services then there is in electricity or water.

    When software will be manufactured with the same quality and security controls as a Volvo, i'll start trusting Data storage as a utility!

    I did a text on the subject on my blog

    Spirovski Bozidar
  • Are you actually paid...

    ... to write twaddle like this?

    Or do you not pay attention when Google and Amazon have "glitches" that force Google Apps and S3 "off the air" for long stretches, affecting hundreds of thousands of people? And if a backhoe cuts a major fiber condiut, or a fire knocks out a NOC?

    Just as my data should stay with me, a company's data should stay with the company.
    Media Whore
    • They're not paying attention

      They're not paying attention. None of them can think past their own experience, and they think the Internet is a reliable network. I agree with you. The medical community, for example, cannot lose access to medical charts just as someone is going into surgery because a squirrel chewed the wrong wire in another state. Many of us use redundant servers, redundant memory SIMMs, redundant storage, and even redundant power systems so we don't have to rely on the power company or anyone else. Too many of these comments show a lack of understanding of the term "mission-critical" computing. Very often, LIVES are at stake. There are actually some things MORE important than your credit card data. Medical charts are just one example--there are thousands of large practices and hospitals with IT departments who aren't going to rely on the Internet as a vehicle to storage.
      • Are you sure you said this right?

        "there are thousands of large practices and hospitals with IT departments who aren't going to rely on the Internet as a vehicle to storage."

        I can see them using rented space off site as a back up in case something really bad happened at their site. Fire or what ever.

        I'm a lot less inclined to think smart businesses would be willing to forgo having the active databases at their own sites.

        On the other hand I know some data is being stored this way by school systems.

        Of course we can normally afford to waid a day or so if we must.
  • How Secure Is It?

    I have a hard time imagining that companies with sensitive/secure (read 'personal') data will buy into the cloud wholesale any time soon. By that same token, is Amazon willing to be held legally and/or financially accountable for the loss of credit card numbers or SSNs or other sensitive/secure data from their systems? The liabilities seems staggering...
  • RE: Are we ready to declare the

    I think it is pretty humorous to read how folks are worried about security in a cloud data center. It's as if having the data under your own roof under lock and key will keep it "safe." Ha! A good movie - a guy, dressed in all black, dropping face-first from the ceiling to only inches from the floor of a weight-sensitive data center floor in order to sneak off with "files." Like I said, it's a movie. . .

    Face it, if your own company's data center is connected to the public via the Internet, it can be compromised. The only way that you can be protected is a closed loop - and then because the info isn't accessible, it isn't very valuable.

    It's coming. Cloud computing, a separation of the application and the data, and remote storage of data. It's not only cheaper, but it makes sense.