I recently read a post by my good friend James Hamilton at Amazon regarding Private Clouds. James and I worked closely together at Microsoft and he was always a good source for out of the box thinking and challenging the status quo. While James post found here, speaks to the Private Cloud initiative being what amounts to be an evolutionary dead end, I would have to respectfully disagree.
James’ post starts out by correctly pointing out that at scale the large cloud players have the resources and incentive to achieve some pretty incredible cost savings. From an infrastructure perspective he is dead on. But I don’t necessarily agree that this innovation will never reach the little guy. In my role at Digital Realty Trust I think I might have a pretty unique perspective on the infrastructure developments both at the “big” guys along with what most corporate enterprises have available to them from a leasing or commercial perspective.
Companies like Digital Realty Trust, Equinix, Terramark, Dupont Fabros, and a host of others in the commercial data center space are making huge advancements in this space as well. The free market economy has now placed an importance on low PUE highly efficient buildings. You are starting to see these firms commission buildings with Commission PUEs Sub 1.4. Compared to most existing data center facilities this is a huge improvement. Likewise these firms are incented to hire mechanical and electrical experts. This means that this same expertise is available to the enterprise through leasing arrangements. Where James is potentially correct is at that next layer of IT specific equipment.
This is an area where there is an amazing amount of innovation happening by Amazon, Google, and Microsoft. But even here in this space there are firms stepping up to provide solutions to bring extensive virtualization and cloud-like capabilities to bear. Companies like Hexagrid have software solutions offerings that are being marketed to typical co-location and hosting firms to do the same thing. Hexagrid and others are focusing on the software and hardware combinations to deliver full service solutions for those companies in this space. In fact (as some comments on James’ blog mention) there is a lack of standards and a fear of vendor lock-in by choosing one of the big firms. Its an interesting thought to ponder if a software+hardware solution offered to the hundreds of co-location players and hosting firms might be more of a universal solution without fear of lockdown. Time will tell.
But this brings up one of the key criticisms that this is not just about cost and technology. I believe what is really at stake here is much more than that. James makes great points on greater resource utilization of the big cloud players and how much more efficient they are at utilizing their infrastructure. To which i will snarkly (and somewhat tongue-in-cheek) say to that, “SO WHAT!” 🙂 Do enterprises really care about this? Do they really optimize for this? I mean if you pull back that fine veneer of politically correct answers and “green-suitable” responses is that what their behavior in REAL LIFE is indicative of? NO.
This was a huge revelation for me when I moved into my role at Digital. When I was at Microsoft, I optimized for all of the things that James mentions because it made sense to do when you owned the whole pie. In my role at Digital I have visibility into tens of data centers, across hundreds of customers that span just about every industry. There is not, nor has there been a massive move (or any move for that matter) to become more efficient in the utilization of their resources. We have had years of people bantering about how wonderful, cool, and how revolutionary a lot of this stuff is, but world wide Data center utilization levels have remained abysmally low. Some providers bank on this. Over subscription of their facilities is part of their business plan. They know companies will lease and take down what they think they need, and never take it down in REALITY.
So if this technology issue is not a motivating factor what is? Well cost is always part of the equation. The big cloud providers will definitely deliver cost savings, but private clouds could also deliver cost savings as well. More importantly however, Private clouds will allow companies to retain their identity and uniqueness, and keep what makes them competitively them –Them.
I don’t so much see it as a Private cloud or Public cloud kind of thing but more of a Private Cloud AND Public cloud kind of thing. To me it looks more an exercise of data abstraction. The Public offerings will clearly offer infrastructure benefits in terms of cost, but will undoubtedly lock a company into that single solution. The IT world has been bit before by putting all their eggs in a single basket and the need for flexibility will remain more key. Therefore you might begin to see Systems Integrators, Co-location and hosting firms, and others build their own platforms, or much more likely, build platforms that umbrella over the big cloud players to give enterprises the best of both worlds.
Additionally we must keep in mind that the biggest resistance to the adoption of the cloud is not technology or cost but RISK and TRUST. Do you, Mr. CIO, trust Google to run all of your infrastructure? your applications? Do you Mrs. CIO, Trust Microsoft or Amazon to do the same for you? The answer is not a blind yes or no. Its a complicated set of minor yes responses and no responses. They might feel comfortable outsourcing mail operations, but not the data warehouse manifesting decades of customer information. The Private cloud approach will allow you to spread your risk. It will allow you to maintain those aspects of the business that are core to the company.
The cloud is an interesting place, today. It is dominated by technologists. Extremely smart engineering people who like to optimize and solve for technological challenges. The actual business adoption of this technology set has yet to be fully explored. Just wait until the “Business” side of the companies get their hooks into this technology set and start placing other artificial constraints, or optimizations around other factors. There are thousands of different motivators out in the world. Once they starts to happen earnest. I think what you will find is a solution that looks more like a hybrid solution than the pure plays we dream about today.
Even if you think my ideas and thoughts on this topic is complete BS, I would remind you of something that I have told my teams for a very long time. “There is no such thing as a temporary data center.” This same mantra will hold true for the cloud. If you believe that the Private Cloud will be a passing and temporary thing, just keep in mind that there will be systems and solutions build to this technology approach thus imbuing it with a very very long life.
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LooseBolts 
I agree. There is an awful lot of confirmation bias in the public cloud space these days. I suspect it has more to do with wishful thinking about growth potential (and investment dollars) than any real market need.
I’ve met very few IT people (especially in SMB) who are not control freaks when it comes to “their stuff”, meaning their company’s stuff of course. It takes a very VERY long time for IT people to let go of their tight grip of what they see as their purpose. They’ll outsource only things that are far too expensive to do themselves, which is why they’ll rent colo space, but insist that it be highly secure. They want to carve out their tangible, fenced-in, locked world supported by the colo provider’s power & cooling infrastructure. They view this space like the USA does its embassies overseas: sovereign soil in a foreign land. That is just not possible in a public cloud environment.
You mentioned email, and I believe the only reason why that has been outsourced successfully is that spam has made managing your own mail systems such a nightmare. Had the spam problem never started there would be very little, if any need or market for outsourced email services. But with pain coming back at IT from every one of their own users, it has become far easier to hand email serving off to somebody else. Traditional datacenter operations do not have such pain points that can be felt throughout the entire enterprise like spam is felt from the CEO to the Summer Intern.
The underlying technology of cloud computing (virtualization) will change the way IT works in the datacenter. It is unlikely however to change the marketplace as much as the public cloud providers and investors in that sector wish and hope it will.
Regards,
–chuck
The main argument I see people make for companies pushing into the public cloud instead of a private cloud is mainly that the cost effectiveness is better.
That may be, but by that logic then a company would tend to outsource everything it possibly could right? I mean, it would make sense for no company to have internal HR, internal payroll, internal corporate counsel, internal travel staff, etc. Those needs can be better served by outsourcing.
I call BS on public clouds “winning”. There’s too much value in certain aspects of the IT organization to want to outsource to a public cloud just because of revenue. Like Michael says, there’s space for both.
Good post Mike! Here is my response in a blog entry referencing both your and James post. http://www.greenm3.com/2010/01/private-clouds-dead-or-alive-views-from-james-hamilton-and-mike-manos-logic-vs-emotional.html