Starting something new….

image

This post was an interesting struggle for me.  What should my first post since my departure from Microsoft be about?  I have a great amount of topics that I definitely want to talk about regarding the distance and gap from the executive suite, to Information Technology to the data center floor and why there continues to be challenge in this space across the industry.  In fact I probably have a whole series of them.  I am thinking of calling them “Chiller-side Chats” aimed at priming both sides in conversations with the other.   There are some industry-wide metric related topics that I want to take on, interesting trends I see developing, and literally a host of other things ranging from technology to virtualization.  While at Microsoft I maintained Loosebolts and an internal Microsoft blog which as it turns out was quite a bit of work.   I now have time to focus my energies in one place here at Loosebolts and unfortunately I may subject everyone reading this to even more of my wild ramblings.  But to talk to any of these technical issues, business issues, or industry issues would be ignoring the gigantic, purple spotted, white elephant in the room.   In fact, by the time I finished the original version of this post it was 6 pages long, and ran far afield on what I think is fundamentally changing in the data center space.  Instead of subjecting you to one giant blog, I was counseled by close friends to cut it down a bit into different sections.  So I will chop it up into two seperate posts.  The first question of course is – Why did I leave Microsoft for Digital Realty Trust?

I accomplished a great deal at Microsoft and I am extremely proud of my work there.  I have an immense amount of pride in the team that I developed there and the knowledge that it continues to drive that vision within the company.  Rest assured Microsoft has a great vision for where things are going in that space and the program is on rails as they say.  My final goodbye post talks more about my feelings there.  Within it, however, are some of the seeds (to continue that farming analogy even farther!)  of my departure.  First we need to pull our heads out of the tactical world of data centers and look at the larger emerging landscape in which data centers sit.  Microsoft, along with Google, Amazon and a few others are taking aim at Cloud Computing and are designing, building, and operating a different kind of infrastructure with different kinds of requirements. Specifically building ubiquitous services around the globe.  In my previous role, I was tasked with thinking about and building this unique infrastructure in concert with hundreds of development groups taking aim at building a core set of services for the cloud.   A wonderful blend of application and infrastructure.  Its a great thing.  But as my personal thought processes matured and deepened on this topic flavored with what I was seeing as emerging trends in business, technology and data center requirements I had a personal epiphany.  The concept of large monolithic clouds ruling the Information-sphere was not really complete.  Don’t get me wrong, they will play a large and significant role in how we compute tomorrow, but instead of an oligarchy of the few, I realized that enterprise data centers are here to stay and additionally we are likely to see an explosion of different cloud types are on the horizon.

In my opinion it is here in this new emerging space where the Information Utility will ultimately be born, defined, and true innovation in our industry (data center-wise) will take place.   This may seem rather unintuitive given the significant investments being made by the big cloud players but it is really not.   We have to remember that today, any technology must sate basic key requirements.  First and foremost amongst these is that it must solve the particular business problems.  Technology for technology sake will never result in significant adoption and the big players are working to perfect platforms that will work across a predominance of applications being specifically developed for their infrastructure.   In effect they are solving for their issues.  Issues that most of those looking to leverage cloud or shared compute will not necessarily match in either scale or standardization of server and IT environments.    There will definitely be great advances in technology, process, and a host of other areas, as a result of this work, but their leveragability is ultimately minimized as their environments, while they look like each other’s, will not easily map into the enterprise, near-enterprise, or near-cloud space.   The NASA space program has had thousands of great solutions, and some of them have been commercialized for the greater good.  I see similar things happening in the data center space.  Not everyone can get sub 1.3 Average PUE numbers, but they can definitely use those learnings to better their own efficiency in some  way.  While these large platforms in conjunction with enterprise data centers will provide key and required services, the innovation and primary requirement drivers in the future will come from the channel. 

So Why Digital Realty Trust?

Innovation can happen everywhere in any situation but it is most often born under the pressure of constraints.  While there are definitely some constraints that the big players have in evolving their programs, the real focus and attention in the industry will be at the Enterprise and Information Sub Station provider layer.   This is the part of the industry that is going to feel the biggest pinch as the requirements evolve.  Whether they be political, economical, social, or otherwise this layer will define how most of the data center industry looks like.   It is here at this layer in which a majority of companies around the world will be.  It is here at this layer that will be the most exciting for me personally.  The Moon Missions were great but they were not about bringing space travel to the masses.  Definitely some great learnings there that can be leveraged, but the commercialization and solution to the masses problem is different, perhaps bigger, and in my opinion more challenging.   At the end of the day it has to be economical and worthwhile.  We have to solve that basic business need and use case or it will remain an interesting scientific curiosity much like electricity was viewed before the light bulb. 

In Digital Realty Trust I found the great qualities I was looking for in any company.   First, they are positioned to provide either “information substation” or “enterprise” solutions and will need to solve for both.  They are effectively right in the middle of solving these issues and they are big enough to have a dramatic impact on the industry.  Secondly, and perhaps more importantly, they have a passionate, forward looking management team whom I have interacted with in the Industry for quite some time.  Let me reiterate that passionate point a moment, this is not some real estate company looking to make a quick buck on mission critical space.  I have seen enough of those in my career.  This is a firm focused on educating the market, driving innovation in application of technology, and near zealot commitment on driving efficiencies for their customers.  Whether its their frequent webinars, their industry speaking engagements, or personal conversations they are dedicated to this space, and dedicated on informing their customers.  Even when we have disagreed on topics or issues in the past, its always a great respectful conversation.  In a nutshell, they GET IT.  Another key piece that probably needs some addressing is that bit about application of technology.  We are living in some interesting times with data center technologies in a wonderful and terrible time of evolution.   The challenge for any enterprise is making heads and tails of which technologies will be great for them, what works, what doesn’t, what’s vaporware versus what is truly going to drive value.   The understanding and application of that technology is an area that Digital knows very well and the scale of their deployments allow them to learn the hard lessons before their clients have to.   Moreover they are implementing these technologies and building solutions that will fit for everyone, today! 

Another area where there is significant alignment in terms of my own personal beliefs and those of Digital Realty Trust is around speed of execution and bringing capacity online just in time.   Its no secret that I have been an active advocate of moving from big build and construction to a just in time production model.  These beliefs have long been espoused by Chris Crosby, Jim Smith, and the rest of the Digital team for some time and is very clearly articulated in the POD ARCHITECTURE approach that they have been developing for quite a few years.  Digital has done a great job of bringing this approach to the market for enterprise users and wants to drive it even faster!  One of my primary missions will be to develop the ability to deliver data center capacity start to finish in 16 weeks.   You cannot get there without a move to standardizing the supply chain and driving your program to production rather than pure construction.   Data Center planning and capacity planning is the single largest challenge in this industry.  The typical business realizes to late that they are in need to add data center capacity and these efforts typically result in significant impacts to their own business needs through project delays or cost.  As we all know, data center capacity is not ubiquitous and getting capacity just in time is either very expensive or impossible in most markets.  You can solve this problem by trying to force companies to do a better job of IT and capacity planning (i.e. boiling the ocean) or you can change how that capacity is developed, procured, and delivered.   This is one of my major goals and something I am looking forward to delivering.

In the end, my belief is that it will be companies like Digital Realty Trust at the spearhead of driving the design, physical technology application and requirements for the global Information Utility infrastructure.  They will clearly be situated the closest to those changing requirements for the largest amount of affected groups.  It is going to be a huge challenge. A challenge, I for one am extremely excited about and can’t wait to dig in and get started.

\Mm

Author: mmanos

Infrastructure at Scale Technologist and Cloud Aficionado.

7 thoughts on “Starting something new….”

  1. Hi Mike,

    Congrats on the new role at DRT…

    I am writing you as a consultant who is often asked to help clients locate Data Center space in the Domestic US and around the globe. We are hoping to learn more about the turn key data-centers and look forward to the WebEx’s. In additions we wanted to find out if DRT offers a channel / referral program.

    Thanks in advance,

    Gary

    1. Thanks for the note Gary. I have forwarded your note to our Solutions group to find out the answer. Still the new guy. 🙂

  2. Congrats as well Mike. I have been following the growth of Offsite fabricated solutions in the construction industry for over 7 years. The innovative use of offsite in the GEN 4 Data Center Design is driving innovative thinking in all area of ofsite. My firm has been a leader in innovative offste for over 15 years and would be interested in speaking to your team on our 3D modeled solutions to your POD architecture design.
    If you could forward this note over to your team it would be appreciated as well.

    Sincerely,

    Dean Di Lillo
    Vice President
    PCX Corporation, LLC

  3. Mike,

    Sounds like you have a great future evolving the data center industry at DLR. Your insights and knowledge of the industry seems only exceeded by your passion to really add enormous value to the world and your clients / company through your work. I am truly inspired.

    As a financial analyst, I am confused as to why the insiders of DLR have basically sold all of their stock in DLR. They have sold over 1.68 million shares since 8/2007, and only hold 127.87K according to finance.yahoo.com (5/16/09). The first and only purchase of the DLR’s stock was reported this month, 5/6, by Kathleen Earley, of 1,000 shares, and although 1,000 shares is not meaningful in light of the 1.68 million sold over the past two years, at least it’s a start. I would guess that you joining the DLR team may be a big factor is the first purchase.

    Sam Stewart, Head of Wasatch Advisors funds, and recipient of the Mutual Fund Manager of the year for his work in small cap stock funds, noted when I was in his investment management course as a grad student, look first and foremost at how much the management team owns of the company. Surely, management and insiders having a significant investment in the company helps insure that they will do whatever it takes to protect shareholder value. In the case of DLR, they have basically sold everything and own almost nothing. Surely their share ownership and share sales do not correspond with what you see in the management. Can you explain this apparent paradox? DFT’s insiders own roughly 58% of the Company, roughly 49.5% through the Operating Partnership, and another 9.5% of the public REIT (DFT). Although I am interested in how they will respond to the competitive transitions that you are spearheading, I do feel very good that they have a significant vested interested in doing so!

    Having spearheaded a high tech development program for the state of Utah, through the Graduate School of Business at the UofU, and having been a Partner in a strategic planning firm headed by the author of Creating Excellence, my work was on analyzing industry trends. I held what was billed as the first symposium on “online research to expand and finance technology companies,” featuring my work in this area at the University of Colorado, using Dialog’s database system (the precursor to the Internet) in 1990. Although the trend to low cost, low power, minimal carbon footprint, quick build data centers seems very logical, as you note in your blog, businesses produce to meet current needs in the market. The high-end data center, which DFT has, is a major component of the data center market. How many of these high cost data centers do you think exist in the world? How many do DLR, MSFT and other big players have each? Surely, server manufacturers are likely to seek to redesign existing servers, given the power, cooling and heat constraints of these high-end data centers, seeking to produce even better efficiencies than achievable with the new low cost centers. Tearing down $100 M facilities, to build other low cost data centers, seems unlikely. What trends do you see in advancing server capabilities, given the constraints of the high-end data center?

    It would seem that the future of “existing data centers,” may be some type of “data center park,” where the high end data center offers certain advantages for various types of servers, given its power, cooling and heat characteristics; while the mobile, low cost, low carbon footprint, quick build format, offers advantages for other types of servers. Does this sound likely to you, and if so, what do you see as being the vision of this potential data center park environment?

    Although DLR is the leading data center REIT, surely it would appear that it has a host of older data centers. Companies, like DFT, have only the high-end data center, a potential disadvantage, but they only have 7 data centers, and lots of land in key locations. DFT may be able to build out their land in the hypothetical data center park format, while DLR, MSFT, etc. have significant numbers of older data centers. Which companies do you think may have the strategic advantage in this evolving environment? Obviously MSFT has tones of money, DLR has a large existing infrastructure and commitment to the modular format, while DFT is the new play on the block, with only seven high-end facilities. Are most of the key players likely to win in this environment, due to the sure size of the growth potential for data centers?

    Thanks for what ever comments you care to make. Good luck at DLR. Your passion, commitment to what is great in the industry, value added innovation and development, etc. comes through in your writing. I wish you the very best in your new position. If I could resolve the issue of insider stock ownership at DLR, I may become an investor. However, with the insiders not convinced enough in the company’s potential to hold the stock, I just can’t seem to invest in any myself.

    All my best,

    Jim Moultrup

  4. Mike,

    What I am envisioning is segmentation of customers, tasks, architecture, software, pricing, to specific modules of the data center park.

    The high-end data center specializes in the most data intensive applications for clients, i.e. streaming video, pictures, advanced computing, etc.. It becomes a component of the module of the data center park, where the clients with the most high-end data intensive needs are primarily domiciled (i.e. Netflix, etc.). Even specific application of Netflix, such as streaming video, may end up on the high-end data center servers, which are customized specifically to these applications, and therefore, generate the most heat, requiring the most power. Software architecture may be able to be customized to have most of Netflix’s streaming video components on the specialized servers domiciled in the high-end data center, while the less data intensive needs of their web page are domiciled on the lower cost, low heat, pods.

    Clients with very low data intensive needs are all domiciled on the low cost, low power, low heat components of the module in the park.

    Those clients with mixed use, such as FaceBook, may have their needs best served with a more even mix of these various data center park hypothetical components.

    Servers, in this hypothetical future, are customized to very specific needs, with the highest end servers providing the most data and processing intensive components, while the less data and processing intensive components are done by specialized servers for these needs. Software architecture is customized to combine these processes specifically to customer needs. While pricing strategies optimize the mix, providing the highest value added for the lowest cost.

    Although admittedly, I am not very knowledgeable in data center technology, server capabilities, and software applications for such a hypothetical data center park, based on my logical strategically trained mind, it seems plausible to me. Given your extensive knowledge in the areas I am not very knowledgeable in, what do you think? Possible, or even probable? What would your vision be of such a future?

    Thanks again for your comments.

    All my best,

    Jim Moultrup

  5. Mike,

    I appreciate very much in advance your willingness to consider my request for additional clarity on the strategic direction of the data center market, in particular the design changes that you have spearheaded at MSFT, and now DLR.

    Having been a big fan of Michael Porter, of Harvard University fame, and author of the two exceptional books, Competitive Strategy, and Competitive Advantage, I am well schooled in his view that you are either:

    1. Low Cost Leader, or
    2. Value Added Player

    In this vein, one might argue that the likes of DLR, under the direction of Mike Manos, may become the “low cost leader,” with companies like Microsoft following that basic strategy. While DFT, if it were to develop all of their planned high-end data centers, may evolve as the value added data center REIT.

    It would seem that the problem lies in the possible paths of the development of servers. If I might try to put a simple mathematical formula to the issue, as I see it, it would be something like the following:

    PE F(H, C, W, CF, X)

    Where the processing efficiency (PE), is a function of the available heat H, cooling needs C, water constraints W, carbon footprint limitations CF, and other factors X. It would appear that the Microsoft, DLR approach is to minimize these other factors (H, C, W, CF, X) given the current processing efficiency PE. Another tack that I would guess would be taken is given the limitations of the high-end data center for these factors (H, C, W, CF, X), continually seek to increase processing efficiency PE, especially given the large number of high-end data centers globally (do you know how many there are?).

    If my assumptions are correct, and if server manufacturers are continually able to produce the most efficient servers for the most broadband intensive applications (advanced computing, streaming video, etc.), that are on computers that need the constraints of the high-end data center, then high end data centers should be able to continue to charge very attractive lease rates, and have very low vacancy rates.

    If, however, server manufacturers are able to produce servers that are equally efficient (PE) with those developed for the high end data center constraints F(), that are usable in the low cost, modular format discussed by Microsoft in the article in Seattle Times recently, then it is likely that the high-end data center will not be able to charge lease rates commensurate to the cost of the facilities, and the high end data center will become a thing of the past.

    If, alternatively, there are servers that perform much more optimally utilizing the constraints of the high-end data center F(), and some that perform other tasks more optimally given the constraints of the low cost modular data center, then it is likely that the “data center park,” which offers various architecture options is likely to be the optimal design.

    If you would be able to add clarity on where you see these very important data center design trends going, and why, it would be greatly appreciated.

    Thank you in advance for any insights you care to provide.

    Sincerely,

    Jim Moultrup

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s