Future of Cloud Computing: Data Centers, Outsourcing, and the Power of Cultures


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to focus their energies on new applications and services that weren’t possible before the Internet (the cloud). Applications such as e-mail and search are great examples. I’m sure there are many more!

Outsourcing IT to the cloud. One “application” enabled by ubiquitous Internet access is ability for organizations to move some of their on-premise IT infrastructure to some off-premise location. Doing so has clear ROI motivators, such as, eliminating significant capital expenditure when facing infrastructure deployment for a new application or expanding/replacing existing infrastructure. In other cases, it may be motivated by reducing ongoing operational expenses of running the IT infrastructure by letting a specialist organization do it more economically. This is the value proposition of many “cloud” (a.k.a. data center) players such as Amazon’s AWS, Rackspace, the Planet, and others. Note that this is analogous to IBM Global Services replacing internal IT staff in organizations with trained IGS consultants to improve efficiency through IGS’s best practice processes. However, outsourced IT in the cloud is a type of scenario that sometimes exaggerates the “replacement” hype about the new paradigm. By extrapolation, it seems to imply that all applications would eventually get hosted in the cloud—i.e., all IT will be hosted in a set of Internet Data Centers.

Something about this extrapolation bothers me. I’m unable to fathom how computing that is now highly decentralized and distributed all over the globe can be made to converge to a few data centers. Ironically, this doesn’t seem to compute in my little brain. Not all applications require Internet Data Centers. Such data centers are prohibitively expensive to build and operate—even more so than the mainframes! And such data centers have inherent physical limits in terms of scalability when you consider real estate, building, power, mechanical and bandwidth needs of such a facility. Why would it ever be a good idea to have a word processing application run in a data center and have millions of users all access it over the Internet when it is much cheaper and faster to run it right on the user’s personal device?

I believe that certain classes of applications lend themselves to needing data centers. Internet search is one of the best examples of that. Many mega e-commerce applications fit the bill as well. Applications that need to process large volumes of data, slice and dice data to find patterns and interrelationships at high speed, need the concentrated capacity of data centers. However, data centers are very expensive beasts, so the applications that run in these data centers better justify the ROI. I am so happy that Google figured out how to monetize Internet search through advertising! Unfortunately, not everything is monetizable through advertising. A large number of applications are much more efficient and cost effective to run on the edge of the Internet, rather than in the (data) center. The center may be provide facilities such as security, control, orchestration, rendezvousing or meta-data that enhance these edge applications to be more powerful, efficient and effective. The footprint of such a coordination facilities is usually small and in many cases it may even be better to have many small centers around the globe than one large one. I do not believe it makes sense to centralize these applications unless a strong revenue model can be demonstrated to support the underlying data center costs.

Power of Decentralization

So, I believe there are at least two classes of cloud applications: centralized and decentralized. Today, we are seeing most of the energy and investment being spent in building centralized cloud applications and surprisingly little energy is being spent on enabling decentralized cloud applications. Most applications we see on the Internet today are hosted centrally in some data center and take very little advantage of the capabilities on the edge. Heck, electronic mail, which was designed to be a decentralized application has been turned central with mega e-mail providers such as Hotmail, Yahoo, and Google! Business e-mail is still fairly decentralized, though we do see a definite trend towards … Next Page »

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Praerit Garg is the co-founder and president of Symform, a cloud data storage startup based in Seattle. Follow @

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4 responses to “Future of Cloud Computing: Data Centers, Outsourcing, and the Power of Cultures”

  1. The Black Book of Outsourcing just named Cloud Computing as one of the six biggest paradigm shifts in outsourcing for the next few years. I recommend you go to their downloads page and get the full free study entitled 2009 STATE OF THE OUTSOURCING INDUSTRY REPORT. Very comprehensive and free.

  2. Tom Cook says:

    There is a lot of spin about Cloud in the market. Fundamentally, we view the cloud as a distribution channel. It simply aggregates demand for efficiencies.

    We supply massively scalable deduped, value tier storage to enterprises. Among our customers are both SSPs for public clouds and Fortune 2000 enterprises with private cloud deployments. Both models are built upon one provider aggregating users to achieve better service levels and cost efficiencies than the operating units can attain on their own.

    What technologies are required to address the private/public cloud storage markets?
    1. Massively Scalability – the solution must scale to PBs to address today’s needs and those in the future.
    2. Always Available – the storage must must be fault tolerant and online.
    3. Secure – the target must be multi-tenant capable, compliant and encrypted.
    4. Cost Effective – the solution must provide high ROI.

    The attributes are simple but only a select few solutions make the cut. Like other distribution plays, winners will assemble best of breed products to supply a total solution.