Thursday, June 20, 2024

The Data Center Strategy Rethought

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By Myles Suer

A lot of companies are focused on products and services that make it easier for organizations to build datacenters and implement internal, private clouds. The question is: where is CIO thinking on the datacenter? More important, has the crisis and work-from-home changed their thinking between running a data center and putting workloads into the public cloud?

These were the questions that I posed to a recent #CIOChat on Twitter.

Prior to the current crisis, what was your strategy?

Former BusinessWeek CIO Isaac Sacolick starts this conversation by saying, “for many, the data center should already been ripped and replaced with cloud and multi cloud.” Mike Kail, former Yahoo CIO, agrees and suggests that his thinking back in 2012 was reflected by an article about Netflix and its shift to the cloud.

Former CIO Joanna Young tends to agree for with Sacolick and Kail “for startups and green field lines of business.” However, she says that “older organizations are still on the journey. If they have prior purpose-built data centers, shedding/repurposing these can be a slog.” For example, CIO Milos Topic says that for his organization “we have been in a hybrid operating model for a while with our strategy to move further away from our on-campus data center.”

Sacolick – in retort – suggests that “cloud started with the long tail of SMBs and midmarket companies. Beyond old legacy applications, hard for them to be the reason only for operating data centers.” At this point, CIO David Seidel adds, “I’ll bang my old drum of we’re all multi-cloud somewhere, whether we know it or not. But we aim to be primarily focused on a single major IaaS vendor to optimize skillsets, pricing, and system latency.”

Has the crisis changed CIO thinking?

Young says, in her case, “the strategy hasn’t changed. It still includes hosted co-location and multi-cloud instances. The timeline and mix, however, is evolving as waves of the new normal become clearer.” Young goes onto say that “there is a higher prioritizing for the move to cloud as part of better and more realistic operations and business continuity planning.”

Seidl agrees and says, “his university’s ability to leverage cloud services has allowed them to grow and scale pretty heavily during the crisis, and these are things they wouldn’t have been able to do in a datacenter only environment.” Like him, Topic says that “nothing has changed on my end, but it has helped some of my colleagues outside IT see the value of the cloud. We are all on the same page now, it is time to act, together.”

For this reason, Young believes that it is essential for the “CIO to get alignment while they have the attention and priority of CEO and Boards.” At the same time, she suggests, “CIO have caution …. don’t rush into any contracts, but definitely be looking for sensible deals and accelerated timelines. In other words, basic good sense still applies.”

Topic agrees with Joanna that is the best way forward for us all. CIO Martin Davis says “there is no difference at all, the crisis has just re-emphasized the need for IT. Agree, I wouldn’t put new stuff into the data center and would be looking to remove current workloads.”

What types of workloads make sense to retain in the data center?

Topic argues that things should be retained when “your team can do a better job than cloud providers. Things specialized to your business or to research.” Topic goes onto say there are “certain appliances for processing, security, audits and so on that can be in data centers, but the number of contemporary applications that necessitate that requirement is reducing daily.”

For this reason, Topic says that “processing intensive academic research still performs better on premises.”

Seidl says that “his list includes things like life and safety and security systems that cannot go down even if the Internet goes away.” CIO Stan Bush, CIO at VA Midwest Healthcare Network, agrees but suggests that “portions of even security and life safety systems can be put in the cloud, because not every component or process is immediately time critical, and even some of those can be with robust contingency measures in place.”

What should happen to data center investment?

Davis says that “his short answer is that it all depends. The value delivered versus cost of re-platforming vs the cost of cloud should all come into the equation.” Young agrees with Davis but says it is “situational but shrinking.”

How about IT investment as a whole?

Young believes “if anything investment should increase.” Verizon CIO Ben Haines suggests that “a recession probably won’t equal a reduction in web traffic, security issues, or data volumes. So there is a continuous need to invest for growth even when revenue may not be there.” Meanwhile, Davis says “cyber-attacks are up 4,000% since start of the crisis.” So former CIO, Mike Kail says that “in a word, No. Just because the economy is slowing down doesn’t mean your digital transformation and cloud efforts should slow down as well.”

However, if reductions become required, Kail says, “disinvestment should include any areas that aren’t strategic to the business and revenue, same as it always should be, recession or not.”

Meanwhile, Young says, “she hopes that no reactive cuts occur. CIO should always be seeking and implementing effective and efficiency improvements so that in leaner times they do not have to make a mad scramble. However, If reactive scramble occurs, maybe it’s time to look for new CIO.” In the meanwhile, she says that CIOs should be looking for “great deals that align with current or near-term imperatives.”

Parting Remarks

It seems clear that strategy changes regarding the datacenter are occurring but there is limited impact from the crisis. The change that has been on going will proceed. If anything, the crisis has shown the value of cloud being part of a resiliency strategy. Data centers are clearly, for this reason, on the backend of their product life cycle curve.


Myles Suer is Global Enterprise Marketing Head for Dell Boomi

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