CIO Matters

Data center facility die-hards versus the cloud

Christina Torode, Editorial Director

The sentiment "you can have my data center when you pry it from my cold, dead hands" is alive and well in some large enterprise IT departments. But these data center loyalists are going to have a hard time arguing against ditching their data center facility (or at least some of it) for the cloud for two big reasons: costs and the need for speed.

Requires Free Membership to View

Christina Torode

Data center facility costs

Let's start with the argument, "We have invested too much in our data center operations to let it go." Wendell Thomas, head of IT infrastructure and operations at victim advocacy group Safe Horizon, knows it well. The IT executive peers at a large company he used to work for gave the cloud a big thumbs-down for cost reasons. They'd done the comparison, and it cost them less to keep a small staff and run their own data centers (which this large company has six of) and manage their own apps than it would cost for them to pay a cloud provider to host an application for 25,000 employees.

Andrew Horne, managing partner at business and IT strategy firm The Corporate Executive Board (CEB) in Washington, D.C., has heard this all before, and he believes this argument won't stand the test of time. At some point, the economics will tip toward the cloud, no matter how much data-center real estate you already have in place. "There are a number of reasons why the economics get more favorable in the cloud. Eventually the scale the cloud providers are able to offer will outstrip even what the largest companies have, as these providers get more customers. Technology is getting cheaper, and cloud providers are taking advantage of that to build out their infrastructure. [Cloud providers] have more flexibility in terms of where they can locate their data centers and have better options in terms of costs and labor," he said.

Cloud providers can more quickly update their data centers, while CIOs "may be stuck with an outdated data center" in a few years, Horne said. "The largest Fortune 50 to 100 companies still think it is cheaper to do it themselves now, and that there are still roadblocks to cloud adoption [security and privacy, mainly], but when we talk to the data center infrastructure managers at these very large companies, they think that in a few years these flaws will be taken care of, and they are feeling more comfortable exploring this model."

And cutting IT costs remains front and center for 2013 budgets. Given that the cost of running IT is more than 60% of the IT budget, on average, what better way to cut infrastructure costs than by moving it to a cloud facility?

IT operations: The need for speed

In an upcoming piece on SearchCIO.com, CIO Niel Nickolaisen talks about his biggest worry these days: not being fast enough. The cloud -- in this case, as it relates to disaster recovery and business continuity (DR/BC) -- helps ease his concern. "Virtualization also makes our DR/BC portable -- the location of our hot, warm or cold site is irrelevant, as long as it is available," he writes. "This results in incredible flexibility, including the ability to use someone else's cloud services as my DR/BC site. How does this help me speed up IT? What used to take lots of time and money -- implementing a DR/BC plan -- now takes a lot less time and money."

More on public cloud concerns

Senior IT managers' public-cloud concerns

CIOs overcoming concerns about cloud security

Cloud providers take on four big cloud concerns

Then there is the incredible pressure to develop mobile apps and revamp websites for customers and employees. The days of rolling out a new website or application in a year or two are over. In some cases, companies are developing "disposable" mobile apps -- moving on to the next project within weeks. The business expects quick turnaround times for a myriad of projects and services. The cloud presents an ideal place for IT to give customers and internal employees quick and uncomplicated access to these new apps and services.

At Gartner Inc.'s data center show in Las Vegas this week, one speaker asked an audience of 2,000 IT professionals, "What do you think your CIO believes when they say they want to do cloud?" The majority (54%) responded "We want to be more agile." So, although questions of which data and infrastructure should and should not be moved to the cloud are still hanging around, the argument for moving to the cloud -- the ability to be more agile, pay less for services delivery or get rid of commodity services to focus on more strategic initiatives -- trumps not moving to the cloud in some way.

Of course, this doesn't necessarily point to public cloud providers. The CEB's Horne has found that a lot of the cloud investments under way in large companies are focused on building internal clouds -- the cost of which can quickly creep up too.