For a fresh perspective on data center obsolescence check out The Coming Colocation Crunch by Nemertes Principal Analyst Ted Ritter writing for Data Center Knowledge this week (Jan 18, 2012):

“Nemertes Research predicts a shortage of colocation space in the U.S. beginning this year, growing to a $1.9 billion facilities gap by 2015.”

Colocation comes in all shapes and sizes, from leased racks and stacks and public cloud services to containers and modules as well as large and highly customized (yet leased) wholesale data centers and campuses.  According to Gartner the low end population of individual racks and computer rooms is shrinking while the population of enterprise and large data centers is growing at a healthy pace.^*

This makes sense.  Enterprises are migrating to larger and newer data centers about as fast as their users are migrating to new network-connected devices and IT teams are migrating to newer software tools and applications and ever more powerful servers.

The public cloud is generating more IT service demands for environments consuming less than 300 kW (competing directly with the small computer room or rack) while creating a new generation of customers who will eventually migrate into wholesale space or their own construction as their power consumption passes 500 kW (when cloud can become less economical).   So we see growth in larger data centers and shrinkage in the traditional, less efficient rooms, etc.

More reading:

Equinix (EQIX), Other Data Center Operators Expand, But Some Investors Fear An Oversupply – Investors.com

2011: The Year Data Centers Turned Green | Wired Enterprise | Wired.com

* Forecast: Data Centers, Worldwide, 2010-20157 Oct 2011 | ID: G00221544 By Jonathon Hardcastle.

In the same way that the rise of the Internet led to the enterprise web (web-enabled enterprise applications) the public and private cloud is driving IT to new modes of operation, most of which demand more agility, more capacity and an even keener  focus on operating and capital expenses.  This profound tension -between a substantial evolution in demands on IT and an extended period of economic doldrums- has placed CIOs in the crossfire.

The Good News

Companies like VMware, Microsoft and Citrix have helped to ease infrastructure challenges with new automation and management capabilities, centered on servers, virtualization and the promise of greater IT automation.  The public cloud players (Amazon, Google and Microsoft) have also helped enterprises with edge cases where agility was needed or building for peak capacity wasn’t economically feasible.

The Not So Good News

Networking and security players have been notably slower in addressing today’s agility and scale-related networking challenges; network automation has progressed more slowly than server automation as many network vendors have continued to focus on hardware-centric and feudalistic product and marketing strategies. The hope for private clouds is the evolution of the network and the emergence of cloud operating systems which can increase efficiency and agility by managing and securing workloads beyond VLAN constraints.

Yet the biggest challenge facing CIOs today may have more to do with the data center facility itself.

The Coming Data Center Race

The last ten years have seen an accelerating pace of change within IT, especially when it comes to agility, capacity and the need for capital and operating efficiency.  Yet most data centers are obsolete, and many enterprises are in the dark at what point obsolescence occurs. 

Most data center decision makers have been focused on securing adequate floor space, walls and back-up generator capacity, and have otherwise treated the data center as just another building in a portfolio of real estate holdings.  They have no idea how energy efficient their data centers are under most if not all operating conditions and measure capacity by available space. 

Virtualization has eased this problem by enabling more power density (more server capacity per rack) but that has shifted the issue to efficient power capacity.  Increased growth means increased waste as a data center passes its point of efficient power and cooling capacity.  Yet many operators don’t have a clear idea of where that point is beyond whether or not the data center is full of racks.

This has left many CIOs in the precarious position of driving innovation from facilities where growth may risk putting an IT team at a disadvantage.

The data center industry and the pace of innovation is at the core of the problem.  Data centers need to be more scalable and more energy efficient than typical office buildings because they: 1) are disproportionate consumers of power; 2) are increasingly strategic to a company’s operating posture; and 3) can be the most significant factor in a company’s ongoing ability to profitably innovate and grow.

Yet most data centers are designed (by today’s standards) to become obsolete in less than ten years, forcing more transactions than necessary for the same amount of IT capabilities and driving up capital and operating expense.   They leave the “at risk” CIO tasked with increasing agility and capacity at the expense of rising operating and capital expenses, which exacerbates an already difficult challenge.

For example, in ten years a highly efficient and vertically scalable data center can reduce operating expenses by about $70 million and allow for a doubling of IT capacity within a single building. Those who deliver IT services and apps from a more efficient data center can outperform those in obsolete facilities on pretty much every quantifiable measure.

The Good News: The Race is On

This widening gap between obsolescence and increasing demands on IT has spurred data center innovation in two areas.  At the low end of the market a multitude of vendors are offering highly efficient containerized data centers, complete with racks, which can be deployed quickly.  They offer viable alternatives to retail colocation and public cloud, but do have their drawbacks.  For example, you can still run out of space quickly and you might end up paying more for the contents than you could otherwise obtain directly from a supplier.  Some of them are not comfortable work environments for your IT teams and many offer a fixed offering that may not address your unique infrastructure needs.

Above 500 kWs of power consumption CIOs may want their teams to have more control over power densities, electrical and mechanical architectures, amenities, etc.  That leads to a larger, wholesale data center, where enterprises can have virtually complete control over a building financed by a public or private REIT. 

These REITs, however, can vary widely in terms of design and efficiency innovation.  Some have a preset “one size fits all” design (your capacity grows you simply buy/lease more space) while others offer comprehensive customization and collaboration options, including the vertical scalability game-changer which allows for considerable opex savings.

You can see examples of highly efficient and vertically scalable facilities by looking at Facebook’s Prineville (especially for infrastructure innovation), and Vantage’s Santa Clara Campus for facilities innovation. Note: I work for Vantage Data Centers, a private wholesale data center REIT.

 

 

Poster available upon request

 

Earlier this month I attended the Gartner Data Center Summit, and sat in on several presentations, including David Cappuccio’s intro keynote on data center trends and Neal MacDonald’s session on virtualization security.  I apologize in advance for the breadth of my rambling and speculation, but I think the IT revolution playing itself out will mark the evolution of virtualization into the network and into private clouds built within a new type of elastic data center.  While I cite two excellent Gartner presos the following thoughts are my own extrapolations.

Surprisingly, there was a common theme between these two otherwise different (Cappuccio and MacDonald) presos catering to two distinct IT audiences:  Cappuccio mentioned “vertical scalability” several times while MacDonald talked about enterprises increasingly embracing virtualization for agility (versus the initial driver of efficiency-driven economy).  My imagination was stirred by their insight.

Data Centers Designed for Growth Instead of Obsolescence

Vertical scalability is the ability for a data center to increase power density as needed, without major modifications.  It is the room to grow within a specified space, with minimal disruption to IT operations.  You could consider vertical scalability a form of business agility; as your data center needs increase you can grow without having to build a second building.  That can mean a massive capex savings.  If you are in a highly efficient (PUE below 1.30) vertically scalable data center the payoff accelerates with utilization, accelerates with growth.  Compare that to the traditional data center model where growth leads to increasing capex and opex.

Network Automation and Consolidation

If we take the agility concept a step further into the bowels of IT one cannot help wonder what will take place with the myriad of network hardware appliances sitting in path between increasingly agile application and storage infrastructures.  There is precedent for consolidation and automation in the network. Remember the compression or caching appliances that once sat in line with server load balancers?  We used to call that world packet ping pong.  That was the world of networking before the consolidation that ultimately led to the application front end or (what Gartner calls) the application delivery controller.

But why stop consolidation at layers 4-7 in the OSI stack, now that cloud operating models are driving IT teams to be more elastic, more responsive?  In the same way that virtualization tore through the legacy one app one server world and created new agility potentials, what is to stop software from marching further through the network appliance world to make networks similarly easier to manage and more elastic?

Software and the Network

Marc Andreessen said as much in the Wall Street Journal on Why Software is Eating the World, albeit his focus was on consumer technology.  And if you weave together Cappuccio and MacDonald messages it seems the vision is clear: IT either becomes the quick or the (replaced by the cloud) dead; and that is ultimately a software-centric challenge.  As server admins discovered in devtest, the abstraction layer that untethered the application and workload from specialized hardware generated impressive efficiencies of scale.

The Data Center as a New Point of Strategic Advantage

That leaves the legacy network and the data center on notice.  The manually managed, legacy appliance network and the traditional (walls and generators) data center begin outliving their usefulness as IT becomes more elastic.  Networks will need to become more dynamic, more people–efficient and data centers will need to become more energy efficient, more scalable and more custom to the unique demands of a more elastic IT organization.

The data center becomes the strategic point of leverage as the IT infrastructure becomes increasingly elastic.  Legacy data centers become obsolete at a faster pace, simply because they confine IT at a time when IT needs more agility and efficiency.

A single next generation data center (vertically scalable and highly efficient at a wide range of utilization levels) can give a team unprecedented agility while reducing power and cooling costs by millions of dollars per year.  Elasticity and economy: the rallying cry of virtualization, networks and the data center.  There I said it.

Will the Network go x86?

When Neal was sharing his slides on virtualization security and talking about the tech and business case migration issues (or the difficulties of network security transforming into virtualization security) of various vendors aimed at addressing the transforming data center, the obvious network agility solution seemed to lead to the x86 network: one off appliances replaced by inline workloads managed by mouse clicks supported with unprecedented automation across a backplane of increasingly powerful network servers powered by the latest commodity processor.

That is indeed a tall order for many vendors with specialized chip architectures.  Oops.

The Virtual Tether

The legacy network and the link between the physical appliance and network application was the cornerstone of network security.  Yet to unleash business agility that physical coupling needs to be replaced by a kind of virtual coupling, which makes the otherwise mundane world of IPAM strategically interesting to the necessary evolution of the network and virtualization, from management to security.

Yet as IT evolves, you can expect more pressure on data center design and construction in the form of demands for vertical scalability and high energy efficiency, especially from customers consuming more than 500 kW.  At 1MW and higher IT teams should expect more input and control over electrical and mechanical architectures, versus one size fits all (take it or leave it) designs.  Customization and efficiency can drive seven figure annual returns in elasticity and efficiency.

Yes, commoditization inside the data center drives added-value for specialization and customization of the data center itself, based on the unique needs (applications, growth rates, latency, availability, power consumption, local climate, etc.) of an IT organization under increasing pressure to do more with less… at an even faster pace.  One can either containerize at the low end or customize at the high end, or get trapped into commodity space that becomes more painful as your needs grow, just like the legacy network and yesterday’s legacy server farm.

For months I’ve been preoccupied with Lew’s Law, or the theory that IT expenses over time will track to the cost of electricity (versus hardware, peoplepower, etc.) authored by Cisco Cloud CTO Lew Tucker and shared in early 2010 with the then-billowing Infrastructure 2.0 Working Group.

After watching an SAP webcast shared by Reese Jones via Facebook on The Coming Age of Abundance, it occurred to me that the near future will be driven by smaller companies producing more electrons per employee via larger and more efficient data centers.  You can skip the theatrical intro and head to the discussion at about 40 minutes in for the most inspired content, although the entire discussion is worthwhile.

Lew will be proven prescient on perhaps a larger scale than he dared to imagine in 2009, because business margins and success will also ultimately track to the cost of electricity as we enter the collaborative age driven by cloud, an endpoint renaissance, new IT operating models and gamification.

This means that data centers will be the new corporate campus (the “collaboration hubs”) and that we’re entering an age where energy efficiency will become a critical business enabler.  Note the Gartner reference near the end of my lengthy Crunch Time in the Clouds tome to the shift from rack and smaller data centers to larger (and more likely customized) facilities.

Closing Note on Efficiency

This week I attended a Sustainable Silicon Valley ECO-Council event at a Leed® Platinum home in Portola Valley.  The 6k+ square foot home managed to collect more energy than it needed for heating, cooling and powering 5 plug-in cars.  It was amazingly comfortable and obviously spacious. No need for heating or air conditioning and enough juice from solar and geothermal to power the plug-ins.  The home was designed to last 100 years.  Could the data center industry be inspired to build efficient Leed® Platinum data centers designed to last longer?  Most definitely.  Check out our Leed(R) Platinum data center campus project.

Two key industries industries face massive disruption in the coming years as IT becomes ever more strategic to enterprise operating advantage, and IT infrastructure scales to new levels of complexity and dynamism.  The future of IT will likely be created by those who accelerate the pace of automation and who build more energy-efficient, scalable data centers.

Setting the Stage: Clouds and Networks

A few years ago ARCHIMEDIUS covered a  cloud computing war shaping up between emerging private cloud players like VMware and Cisco and the public cloud players (Amazon and Google, etc.) who at the time owned most of the cloud mindshare.  This high level mindshare battle distracted many from critical issues, not unlike how the dotcom milieu had a way of masking business issues. 

There were plenty of discussions (in 2008) about the networking issues that are today manifesting themselves in the cloud in the form of service outages; but in previous years these discussions took a back seat to the billowing, amorphous and yet captivating world of cloud marketing excess.

None of the public cloud leaders talked about the network and the collision of expectations that create the preconditions for the new phenomenon of cascading IT failures driven by pesky nits like an early morning configuration error.  The answer I heard over and over again on various panels went something like this [I paraphrase]: “We have it all handled behind the curtain.”  It wasn’t.

Background Resources on Cloud Outages

See CRNs The 10 Biggest Cloud Outages Of 2011 (So Far) and 10 Biggest Cloud Outages Of 2010 (So Far).

SC Magazine:” Worst Outage in Cloud Computing History”

Some of these particularly notable outages were caused by simple, yet destructive manual network configuration errors.  That makes the recent Open Networking Summit a development worth watching, as it introduces a new opportunity for automating tedious and risky networking tasks that could slow the progress of virtualization in production environments.  It could be a private cloud powerhouse and open up the promise of virtualization in production.

Network-related Storms in the Clouds

In addition to high profile Amazon and Microsoft outages, RIM recently experienced a massive network outage. See an interesting take from Infoblox’s Matt Gowarty at the Infrastructure 2.0 blog:

For the RIM outage, maybe a non-standard configuration or unplanned changed caused the back-up failure. If RIM fixes today’s problem, but doesn’t start proactively approaching and testing network configuration changes, they will risk another outage and the question is not if it will happen again, it’s when.

Similarly, as public clouds scale to ever higher heights and become ever more dynamic, you can expect to see ever more outages.  The industry is “architecting the plane in flight”; cloud expectations were set before IT was ready to support them and today’s clouds are often enabled with new tools developed internally or furnished by a growing list of cloud management and security startups being tested and deployed in ever faster cycles with “proportional” testing. 

 

The Scalability Challenge

Increasing Demands on Networks and Servers

IT infrastructures are being built on scales that few tools and people have been adequately tested upon.  This creates risk and opportunity for a growing list of companies playing in the private cloud space.

The importance of the network to the cloud is finally starting to get increased coverage, which wasn’t the case in 2008, when a few were stirring a pot that few people cared considered as important as topics like the cloud definition debate.   Trevor Pott, for example, recently raised the network issue in The Register (Cloudy challenge looms over networking):

With the exception of a few corner cases, processors are fast enough (and have enough cores) to suit everyone’s needs. RAM is dirt cheap, and for the second time in a row, Microsoft is delivering a Windows operating system that requires less RAM than the one before.

Storage costs have recently done that plummeting thing – and cheaper drives means more of them Raid-ed together provide even greater throughput.

What is left is networking. The cost of the servers to accomplish a given task has dropped so precipitously that most networks are at or near capacity, so this is where many refresh budgets will go.

Cisco’s James Urquhart raised the specter in this Cisco blog from 2008:

The next frontier to get explored in depth in the cloud world will be the network, and what the network can do to make cloud computing and virtualization easier for you and your organization. I look forward to sharing the excitement with you as the story unfolds.

The bottom line questions for tech investors: 1) which public and private players are the best positioned to tackle these issues and grow revenue; and 2) which are at the greatest risk of being devalued by innovation and network automation?

Wait… there’s more.

The Data Center Power and Cooling Squeeze

When it comes to the necessary evolution of cloud computing there is also a data center issue emerging, driven by increasing power and cooling demands within the confines of out-of-date facilities and rebuild cycles hampered by a shaky capital market.  While there are millions of square feet of data center space today, most of these data centers were built when there were far fewer personal computers were simply exchanging email across their networks,  before the rise of the enterprise web.¹

No one seems to have a clear picture of how much of the existing enterprise data center space (millions of square feet) has outlived its economic usefulness.  There is evidence of a shift to larger and more energy efficient data centers thanks to the increasing importance of the server to the enterprise and the deployment of more powerful servers; but no one seems to have estimated with any precision just how many outdated data centers there are, especially on a regional basis.

On a recent analyst tour, tech analysts were convinced that data centers built more than seven years ago are likely to be obsolete by today’s energy efficiency standards, while opinions are mixed among data center REIT analysts with broader real estate coverage responsibilities.  For a single enterprise-class data center (say 15k+ square feet and drawing about 3 megawatts of power) obsolescence can add more than $1 million per year in power and cooling expense.²

Since 2004 the sheer number of devices connected to the internet has mushroomed by more than 300%, according to The ISC Domain Survey | Internet Systems Consortium.  More importantly, more of these new devices are communicating with servers for common tasks, versus the hard drive-centric computers of the PC era.

The power and cooling demands on data centers increase dramatically as more devices are accessing more software and services from servers.  It is a logarithmic increase (more devices, more types of apps/content/services from a shrinking population of more powerful and efficient physical servers [and more virtual server instances]). A data center built more than 7 years ago, before the shift to server-centric computing, is likely to be obsolete and eroding TCO with wasted energy.

Bottom line: The server and the data center has become a new critical threshold for availability and strategic operating advantage, just like routers, switches, firewalls, application front ends became strategic as computing entered new delivery eras. 

The energy efficiency designed into newer and more powerful servers is not enough to reduce the overall need for power and cooling in the data center; it just reduces the growth that otherwise might occur with a mere refresh of comparable equipment.

See The Data Center is the Server… for a more detailed review of this discussion, including the shift to more server-centric enterprises and business models:

Most data centers in use today are not particularly innovative and, like filling stations with leaky hoses on their pumps, waste about half of the power and cooling intended for the IT infrastructure.  Many are also running out of headroom for growth, are located in or maintain poor work environments and are losing their value as critical business assets, ironically at the time when IT applications and services are becoming increasingly critical to profits and valuations.

Factors Driving a New Wholesale Data Center Model

As IT infrastructures approach 1 MW of power consumption, the facility itself –and how it is architected from an electrical, mechanical, design standpoint- becomes a material financial interest to the enterprise.  In many older facilities more power is consumed merely cooling the data center than powering the IT equipment itself. As data centers grow there is a business imperative to address waste and inefficiency and customize the facility to unique application, infrastructure and service requirements.

Because companies using out-of-date data center space can be wasting millions of dollars per year on unnecessary energy costs, there is a natural tendency to consolidate racks and stacks out of closets and older buildings into larger and more efficient buildings specifically designed for IT demands and business objectives.

Because of the increasing importance of IT competitiveness and operating advantage,  enterprises are exploring wholesale data center leases instead of outsourcing or leasing retail colocation space or even building their own advanced facility, which today is a riskier and costlier proposition.  Wholesale space allows the enterprise to customize the data center to their unique IT environment demands while maintaining complete control over their critical IT assets and personnel.  Enterprises get substantial savings in power costs, reduce their carbon footprint and leverage REIT money.  For more information read Wholesale Data Centers in the News.

Larger, More Efficient Data Centers

A recent Gartner research report “Table (1-1) Data Centers by Size and Region 2010-2015” signals this trend, with shrinkage in the “rack/computer room” and midsize data center segments and growth in the enterprise and large data center categories between 2010 and 2015.³ 

As private clouds evolve to offer similar economics and elasticity to public cloud alternatives and enterprises evolve to be more software and services-centric, the data center becomes even more strategic to the bottom line and competitive operating advantage. 

Another challenge is scalability.  Most facilities are provisioned for horizontal scalability, or the notion that IT growth (or more power consumption) requires more space or construction of another facility.  More advanced wholesale facilities are pre-provisioning the data center for higher loads within the same space (called “vertical scalability”). This substantially extends the life of the data center.

Obsolete networks and management practices as well as obsolete data centers may be two of the most significant impediments to the promise of the public and private cloud as well as the spread of virtualization.  They will also set the stage for a new generation of startups to disrupt once comfortable status quos.  Those who tackle the network and the data center strategically stand to reap strategic benefits as IT evolves into an even more important role in the enterprise.

1)       The rise of the enterprise web (applications being delivered across WANS, etc.) drove massive increases in application delivery equipment shipments (FFIV, RVBD, CSCO), not to mention more than $1 billion in acquisitions (Redline, NetScaler, FineGround).  More traffic to servers in data centers, but not nearly the explosion in endpoints we’re seeing today.

2)       Based on power pricing in Santa Clara, California.  In other markets the impact may vary due to local power costs.

3)       You can find it via Gartner’s portal:  Forecast: Data Centers, Worldwide, 2010-20157 Oct 2011 | ID: G00221544By Jonathon Hardcastle.

The cloud hysteria and the “end of PC” debate is today’s equivalent to the dancing shadows on the walls of Plato’s famous cave (see Plato’s cave allegory);  both topics are keeping companies and their customers distracted while the technology industry is entering an era of accelerating change more like Kurzweil’s Singularity than Moore’s law.

The mainframe is being reinvented as the green data center; the hard drive is becoming a mere front end for applications and services residing on servers.  The network is becoming the new mother of all motherboards, pushing innovation to the ever expanding edge. 

We saw the network usher in the age of network security, then application delivery, the consumer web, the enterprise web and the branch office.  Now it is bringing us logarithmic rates of change and increasing connectivity at levels that make the dotcom era look like the mainframe era. 

We’re now talking about billions of devices being connected to the network (and servers) in the near future, compared to less than 100 million total in 1999. These devices are collecting and spewing information at an unprecedented pace to an unprecedented population of connected users and systems.

Archimedius has been discussing the impacts of virtualization, netbooks/tablets and cloud operating models (see the three horsemen) on the IT industry since 2008, especially as it relates to the network.  In 2011 we’ve seen a host of major cloud outages, many due to network-related issues and involving some of the most sophisticated IT teams in the world; recently tech legend Microsoft was a victim.

Yet these outages are mere harbingers.  They are indications that we are collectively entering uncharted territory where our existing frames of reference don’t prepare us well for estimating future needs.

Witness the contrast in the data center industry, where some wonder if the world already has enough data center space and yet growth -even in massively built markets like Santa Clara, CA- is defying the great recession of 2011.

You can see for yourself in two separate but related articles in today’s Data Center Knowledge:

2011 Data Center Market Insight Report

Vantage Quickly Filling Santa Clara Space » Data Center Knowledge

The concept of obsolescence is now entering the data center world and enterprises are wondering whether their existing facilities are up for the new demands and opportunities.  Hence the survey results reporting that readers are now most interested in data center scalability, design and technology versus merely who they select for construction.  That marks a major shift in thinking no doubt influenced by the realization that the data center is becoming critically important to IT, which is becoming critically important to the bottom line.

While the computing revolution shifts from PC to server-centricity, market caps are shifting from hardware-centric to software and services-centric enterprises.  This places the data center at front and center for the foreseeable future, and promises a much-needed disruption at the core of how data centers are designed, built and managed.

Note the theme from the last section of this August 29 piece from GigaOM on Dell and VMware, which IMHO is one of the first shots fired in the coming network hardware versus server software battle for the future of the network.  Derrick Harris previously talked about this last fall in “At Cloud Scale, Data Centers are the New Servers”. 

Most data centers in use today are not particularly innovative and, like filling stations with leaky hoses on their pumps, waste about half of the power and cooling intended for the IT infrastructure.  Many are also running out of headroom for growth, are located in or maintain poor work environments and are losing their value as critical business assets, ironically at the time when IT applications and services are becoming increasingly critical to profits and valuations.

So while the IT hardware giants slug it out to gain share in a shrinking habitat mired in manual processes or make the leap to the software and server-centric world, the once stodgy world of data center development is poised for a revolution.  See Jim Trout’s recent Industry Perspective in Data Center Knowledge.  Facebook, Google, Yahoo, Apple, Microsoft and others have demonstrated leadership by developing data centers customized for their applications and services while also embracing unprecedented innovation, especially related to energy efficiency and localization.

Archimedius readers can track the drivers of the data center revolution, from the spread of virtualization into production, into the predestined yet messy Cisco-HP decoupling and into today’s PC “End of Era” head fake (which is really about the decline of shrink wrap software and the rise of the server).  As we lament Steve Jobs CEO departure we enter an era which he has defined, an era of downloads and boutique services and entertainment competing for ever more fickle customers against ever more nimble competitors.  In this era the data center is the channel, the storefront and the fortress for the modern enterprise. 

As the PC eclipses the server, the data center becomes the creator and destroyer of market caps. The data center becomes the server, the cloud and the future.

I never thought I would hear Steve Jobs hail the post-PC era, much less IBM PC legend Mark Dean .  They must be right, because HP just announced its exit from the PC business. 

But then Microsoft has said that the PC isn’t even middle-aged.

This is as close as it gets to a meaningless debate among marketeers.  Remember all the worthless noise around definitions of cloud computing?  Welcome to the PC-era fluff fight. 

It’s too easy to get lost in the form factor discussion and miss the more important massive transformation taking place throughout IT, driven by the return to prominence of the server/mainframe model in computing.

Erica Ogg (GigaOM) hints at the bigger story when talking about the end of the PC era:

So while the era of the primacy of personal computers in their traditional form is fading, they are not disappearing entirely. They’re just taking on a different form.

The Bigger Story: This is the Dawning of the Age of the Server

Thanks to Apple and others the server is upending the shrink wrap, pre-installed, one-size- fits-all computing era. While the personal computer is evolving into a variety of form factors, complete with hard drives, keyboards and screens/monitors, a major change is taking place in how applications/services are delivered.

The server is becoming more prominent and delivering applications and services more efficiently to larger audiences; and end-users are getting more choice, more customization and more service.

Consumers are no longer forced to buy a PC with pre-loaded software or shop in a nearby store with a few hundred shrink wrap titles selected by merchants and middle men based on anticipated demand, marketing spiffs and channel relationships.  And now enterprises are experiencing the consumerization, and it is putting the squeeze on the power once enjoyed by enterprise tech players with powerful channels, certifications and control.

The software channel was brutish to Apple in its earlier years.  I was one of those many frustrated Mac owners who finally gave up when I couldn’t find the software I wanted.  How many other players were driven out of the game because they didn’t have the funds to go to market (fight for limited shelf space by waving ad spends and promotional discounts or flexing developer relationship muscle based on other mature products, training, etc.).  A similar dynamic has played out in the enterprise market, and so on.

Now Jobs has had his revenge by offering hordes of applications for download… from the server to the device.  That is the real story underneath the “post-PC era” headline.  Apple has placed the server at the forefront of its flank attack on software, music and entertainment channels and the consumer has become the middle man, and the enterprise is catching up.

The server is front and center, which makes the data center increasingly strategic.  It is essentially the new distribution channel for software as consumers get more involved in what they download and when it is downloaded.  That makes the data center ripe for the next wave of innovation.

The Data Center is the New Channel

The requisite investments that once poured into greasing the channel for maximum sales results will now shift into revitalizing the once stodgy data center, the plant and operations architecture and gear that was once “just a building or a room”.  The age of the server will become the age of the data center as enterprises wake up to the increasingly strategic role of application and service delivery directly to end-users.

The bottom line: don’t waste too many cycles focusing on which form factors will win or determining when the PC era is over.  Let consumers decide.  Focus your attention on just how efficient, scalable and aligned your data centers will be to the new competitive demands of your business. 

It has been refreshing to see more coverage in the business and tech press related to the wholesale data center category, or what Michael Vizard has recognized as data center warehouses.  The concept of a company that builds and leases data center space in large quantities is unknown to many CIOs and CFOs, but I think that may change as data center developers ramp up data center innovation  and start to take unique enterprise and geographical needs seriously.

Vizard: Moving the Data Center to a New Warehouse | Blogs | ITBusinessEdge.com

Vizard: The Lost Art of the Data Center | CTO Edge

Edwards: Grow your data center with colocation – Computerworld

Troianovski: Web Growth Sparks Data-Center Boom – WSJ.com  (must be a subscriber)

Trout: Data Center Design Finally Addresses Major Sources of Wasted Energy · Environmental Management & Energy News · Environmental Leader

When you consider the macro opportunities and operating pressures facing IT today -and the capital efficiency challenges confronting most organizations- one cannot help but to see the data center as becoming increasingly strategic to virtually all enterprises.

Another encouraging development: news outlets talking about the difference between retail colocation and wholesale (John Edwards at Computerworld):

There are two general types of colocation providers: wholesale and retail. Wholesale colocation providers deal with large spaces — a 10,000-square-foot data center, for example. Except for the power and cooling infrastructure, it’s essentially empty space. The customer, or tenant, does the work of rolling in the servers and racks, cabling up the gear and making sure it all works.

 

Last week I had a brief meeting with Yoram Heller of hot cloud player Morphlabs and we talked about the next wave of cloud innovations.  Of particular interest was the concept of specialized software suites that ride on top of the commoditized cloud platforms that have so far captured most of the popular interest in cloud computing.

It is possible, if indeed likely, that most forms of dedicated hardware or appliances in the network will be replaced by powerful instances, workloads and or/ boutique platforms that transcend the physical and technical boundaries that have been in place since the rise of the enterprise network.   Perhaps that is how network automation plays itself out, as software trumps specialized network hardware.

Check out the Open Networking Foundation for a similar perspective.

Of course that has significant ramifications for the market leaders in networking, their channels of distribution and increasing power densities in already out of date data centers incapable of supporting increasing populations of cheaper yet more powerful (and power consuming) servers running growing populations of workloads, virtual machines and specialized management applications.

Cheaper and more powerful commodity servers replace arrays of dedicated appliances installed for specialized network and IT operations, driving power densities higher as power and cooling costs surpass hardware and software costs.  The physical data center itself then becomes a point of strategic leverage with customization driven by business need, climate, network access, local resources and power and tax considerations. 

Dedicated power plants, higher voltages to the floor, air and water economization all then lead to competitive advantage as cheaper and more powerful infrastructure increase the relative cost of power and cooling to total IT TCO and Cisco’s Lew Tucker’s (see Lew’s Law) prediction is fulfilled.  An advanced data center substantially reduces IT operating expenses as energy costs grow.

Read more at: Data Centers: The Next Wave of IT Innovation; How To Build A Modern Data Center; and  Data Center Design Finally Addresses Major Sources of Wasted Energy.