Will Cloud Computing Kill the Data Center?

Industry experts talk about whether the migration to cloud computing is as inevitable as the hype suggests.


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With cloud computing and SaaS making forays into the enterprise, is the data center as we know it dead?

Obviously, data centers will still exist in some form, but will these soon be confined to large service providers and Fortune 500 companies?

According to a recent report recent report from the University of California at Berkeley, cloud computing services are already five to seven times more cost effective than traditional data center ones.

Even if you’re a cloud skeptic, don’t be surprised if someone from the business side of your organization starts asking about clouds because of studies like this one. In a deep recession, the lowest common denominator is cost. Any technology, proven or not, that promises to cut costs will get attention – whether IT likes it or not.

However, that doesn’t mean you need to start migrating your applications to Google or Amazon right away. What it does mean, though, is that you need to have a strategy you can articulate, even if that strategy is simply to wait and see.

“You may see some applications, low-criticality applications like email, being outsourced, but any real impact cloud computing will have on data centers is several years off,” said Nik Simpson an analyst with the Burton Group.

A slew of obstacles prevent enterprises from moving critical applications to the cloud today, including a lack of SLAs and data-privacy and compliance issues. There’s also the fact that most cloud computing vendors don’t run the same applications that corporations do.

“Either your software vendors have to rewrite their applications or you have to rewrite your in-house applications. There are quite a lot of barriers to that at the moment,” Simpson said. “The shortest path to the cloud for most organizations will be through virtual machines, where you can take an existing virtual machine and simply push it to the cloud.”

Even moving virtual machines dredges up several issues, including bandwidth, latency and availability. “I think enterprises will ultimately move a significant portion of their applications suites – or equivalent applications – into the cloud, but it’s a long ways off,” he added.

The Elephant in the Room: Google

Google has been using the cloud as one of its strategies to poach in areas that Microsoft has traditionally owned. Gmail and Google Apps are quietly pecking away at Microsoft Office, and no one seems to mind – or even notice – that these are cloud-based applications.

Of course, these are consumer, not enterprise, applications, but momentum is momentum.

“Unquestionably, there will be fewer data centers operated by corporations in the future,” said Rajen Sheth, senior product manager for Google Apps.

“There are very few companies out there where it’s really a core part of their business to operate a data center.”

For instance, it makes more sense for an insurance company to focus on writing and selling policies, rather than managing and maintaining email.

Sheth agrees with Simpson that the easy stuff, like email, will move to the cloud first. However, Sheth argues that the underlying platforms that allow for broader data migration are already maturing.

“As more platforms and infrastructure-level technologies become available, like Google Apps Engine and Amazon Web Services, even custom applications will move to the cloud.”

Déjà vu All Over Again

Haven’t we been down this path before? In the late 90s and early 2000s, one of the most hyped technology sectors was the MSP/ASP space.

Although a few of those startups have survived, most did not. And MSP/ASPs did not shake up the IT landscape as some thought it would.

What’s different this time?

“The cynical side of me says that there is no difference,” Simpson said. “I’m seeing all of these cloud storage providers making the same claims that storage service providers made in 2000 and 2001.”

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Tags: cloud computing, Google, Microsoft, virtualization

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