Sunday, November 20, 2016

Public Cloud Echo in the Data Center

The ecosystem effects of workload placement in the cloud have a real effect on the enterprise Data Center that all CIOs should be aware of.

The cost of managing a Data Center is a fixed cost.

  •      The real estate cost plus infrastructure cost defined when the DC was built.
  •      There's the taxes that, depending on the jurisdiction, may see an increase or decrease over some relative but relevant time period.
  •      The "nearly" fixed costs of electricity at volume required to operate the DC.
  •      The maintenance, which also comes in relatively flat over time.
  •      Then there is the inevitable upgrade/renew/replace that comes in roughly the 15-20 year mark that keeps DC managers up at night.

All of these costs must be liquidated against the cost of running everything within the Data Center. (This is a pretty important factor.)

At this moment in time, the Data Center business is seeing a significant increase in volume usage that makes the likes of a Mega Data Center (Mega as in MegaWatt) a viable size of delivery.

This is a fight in the economy of scale that ultimately resolves in Data Center operating in a Utility business model.  It is arguable that Public Cloud DCs are already operating in a Utility model.

What does this mean for the ever venerable Enterprise Data Center?

Figure 1:  DC Workload Shift toward Public Cloud

Workloads transitioned or transformed to operate in the Public Cloud moving out of the Enterprise Data Center are changing the cost base over time.  As indicated in the two simple trajectory graphs, the available inventory will increase as will cost per unit measured and the volume of workloads will decrease over time.

Add this to some really exciting capabilities in Software Defined Networking between the Enterprise (not necessarily the DC) and the Public Cloud and the economies of scale that the Enterprise Data Center were originally deployed for start to errode.

The workloads move for cost optimal delivery.  It provides agility to the business with the means to execute workloads significantly more rapidly.  Then there's the case of Software Defined Networking in this space providing Security, QoS and Latency management spread out over an entirely new capability and dimension.

As the Data Center is operated with a very large number of primarily fixed cost financials, scaling the Enterprise Data Center is incredibly difficult.  With this in mind, and no other means to spread the cost of the Enterprise DC investment, usage of Public Cloud will drive UP the per-workload cost of execution within the Enterprise Data Center as workload volume shifts.


Part 1:  There is a shift afoot, that is changing the business.

Part 2: Moving time for the Enterprise Data Center?

Part 3: The Enterprise Data Center is getting smaller.  Time to add that to the roadmap.

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