by Christine Hodgson

Datacentre dilemmas

Aug 14, 20125 mins
Cloud ComputingIT LeadershipIT Strategy

Many CIOs today entrust the management of their data centres to those with specialised skills.

These typically include advanced mechanical and electrical engineering knowledge, a close understanding of the minutiae of hardware technology. Increasingly, these need to be combined with an appreciation of environmental and sustainability issues linked to data centre operations.

But there are two issues the CIO takes personal charge of.

– Integrity: Problems of security, compliance or reliability in the data centre are serious enough to impact the business will bring demands for answers and solutions from the CIO’s boardroom colleagues. However it’s an eventuality which can reasonably be expected to happen infrequently, and may never happen at all. – Cost: The other circumstance, however, is inevitable. It is the question of cost whenever a major upgrade or new build becomes unavoidable.

With a typical modern, medium-to-large (1000 square metre) tier-3 data centre coming with a price tag upwards of £50m, it is a question not only for the CIO but also the CEO and CFO.

A data centre has an effective working life of 12 years or less before major refurbishments are needed.

In light of the peak in data centre construction that occurred in the UK during 2001 to 2008 (after Y2k and before the global financial crisis), new investment is soon going to be high on the agenda for many CIOs in the UK.

As well as finding the money, many might also struggle to find the skills for a big new data centre programme, given the last time they did this was 12 -15 years ago.

With today’s tight budgets across the public and private sectors showing no sign of easing in the foreseeable future, a request from the CIO for capital expenditure of £50m is unlikely to be given the nod quickly or easily in many organisations.

The pressure to look for alternative options is huge, so what are the alternatives?

An obvious choice is to avoid a massive all-or-nothing financial hit by upgrading existing data centres on a step-by-step, piecemeal basis.

The problem with that is two-fold:

– First, modern data centre technology demands a consistent and unified architecture, a mixture of old and new technology does not always sit together comfortably. Like putting new racing tyres on an old banger, the hoped-for performance boost is unlikely to happen, and increased stress on the older components is likely to bring serious risk of new problems and increased downtime. – Second, this approach means returning to the Board over and again with repeated requests for funds.

Another option is outsourcing, and it is interesting to note that through the recession, IT outsourcing continues to thrive globally, according to the latest research from Gartner, published in May 2012.

Worldwide IT outsourcing revenue totalled $246.6bn (£155.7bn) in 2011, a 7.8 per cent increase from 2010 revenue of $228.7bn (£144.4bn), according to Gartner.

Indian-based IT services providers and those offering cloud-based services delivered the highest growth rates in 2011.

The UK is no exception to the global trend. According to research from Oxford Economics, about 20 per cent of total outsourcing sales in the UK, across all industries, were made in IT and data-related services last year.

The IT outsourcing industry in the UK was found to be the largest contributor to the UK’s £207bn outsourcing sector with £41.7bn in sales.

The report predicted:

“The maturing UK IT outsourcing sector looks set to see demand increase, as companies realise that outsourcing, despite the negative aspects such as some job losses, allows them to compete better because they can invest more in their core business, creating more jobs.”

Cloud computing is essentially just another form of outsourcing, and with cloud techniques and experience maturing, the growth in cloud adoption is seemingly unstoppable.

Cloud formations Buying additional capacity in the cloud for development or non-critical applications is now commonplace and has fuelled much of this growth.

However the real transformation is in replacing hosted or owned data centres with infrastructure-as-a-service, which can shift all or most of a company’s systems, storage, and databases to the cloud.

Many businesses have been adopting a wait-and-see approach to cloud computing, but with big decisions about capital expenditure on data centres looming, the issue is, in my view, likely to become more urgent very soon.

The attractions of flexible, scalable, modern IT without massive capital expenditure will surely prove an irresistible lure.

I believe it is inevitable that looming cost pressures and flexibility will soon be driving the next wave of cloud computing.

In most businesses the move to pay-as-you-go models is likely to be a gradual one over a period of years as confidence in the cloud is tested and gained.

The urgent need for CIOs is to get themselves fully briefed on upcoming needs for data centre investment within their own organisation, and on the alternatives.

Christine Hodgson is Chairman of Capgemini UK

Pic: Mark Fischercc2.0