Some say that cloud computing will be like the PC revolution all over again. The availability of commodity services will convince everyone that they’re IT experts and they don’t need a CIO to tell them how to create a new system. The cloud will be ominous for corporate datacentre (DC) managers too. Vendors such as CA, Sun and Microsoft have made dire predictions for anyone who runs a datacentre for a company whose core business is not IT. Fortunately at least one analyst thinks this is nonsense. According to Steve Wallage, MD of research firm BroadGroup, the datacentre is the foundation of the cloud. “The great advantage of the datacentre is it’s the one physical port in the virtual economy,” he argues. “That physicality can be tremendously reassuring.” However, Wallage warns, just as IT can be dislocated from business strategy, datacentres are often dislocated from IT. They become a low priority and can be the cause of clashes between the heads of property, facilities management and IT, so companies tend not to concentrate on their power or their impact on the business. In a way, the rise of cloud computing could help remind the business of the strategic importance of the datacentre. “The cloud will not kill off datacentres, but will instead make them more important,” says Wallage. Projections see the internet expanding fifty-fold over next decade, adds the analyst. Even with virtualisation’s savings, this means there’ll be a tenfold increase in server numbers. “The uncertainty around cloud’s security, performance and ROI have created a lot of resistance to change in the datacentre,” says Wallage. The majority of investment in datacentres goes on mechanical and engineering (M&E) elements such as chillers, power distribution and generators, all solid reliable items that are as far from cloud culture as it is possible to get. Uncertainty is a big factor driving the demand for datacentres. Any company spending a hundred million plus on a large new DC – Google spent $900m last quarter – will want it to last at least 15 years, he argues. “Given the uncertainty around cloud and IT development, can you have any confidence in IT needs over that period?” says Wallage. Banks like Lloyds TSB, who clearly also have business uncertainties, are delaying major datacentre decisions, he reports. The cloud is making datacentres both smaller and more remote, Wallage adds. Ten years ago, global datacentre builder Digital Realty was building installations with an average life of 14 years and 20,000ft2 in size. Today, a typical UK deal is for a datacentre of between 4000 and 6000ft2 in size with a life of five to seven years. Similarly, in 2001 80 per cent of outsourced datacentres were in London or within the M25. A new trend, reports Wallage, is for banks to take advantage of improvements in telecoms and cloud computing to build further out. HSBC has built in Wakefield and Morgan Stanley in Bournemouth, as banks have realised that only 15 per cent of apps really need to be run locally.

Chop or change The cloud will certainly affect the roles of datacentre staff. Clive Longbottom, head of research at analyst Quocirca, has predicted that IT datacentre staff have two options: to leave and find a job in a technical environment, such as a service provider’s datacentre, or to change their mindset, understand the business they are in and become the trusted conduit between business and IT. “If they choose the latter, I believe they will be doing the business far more of a service and will find it far more interesting and fulfilling,” says Longbottom. If they take the former, then they will become drones. Tasks will increasingly be automated and they’ll be left to deal with technical exceptions to the automated tasks. On the other hand, the cloud will be great for those CIOs who perform a more strategic role. Rather than being constrained by the hardware resources available to them, the cloud puts the CIO a great position – “like a kid in a sweetshop”, according to Longbottom. The promised elasticity of the cloud allows the CIO to concentrate on what functionality is required. “If the business has a problem with customers, let’s get a CRM solution,” says Longbottom. “This isn’t cloud computing, it’s hosting, and just takes existing problems and puts them on someone else’s hardware.” If the business runs on a set of processes and each process is made up of a set of tasks, then by identifying the individual tasks and the technical resources available to fulfil these, you can identify the gaps that cloud apps can fill. It’s a lot quicker to buy cloud services than to build the functionality into a datacentre, he says.

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But this raises questions, says Longbottom. “How are the various functional pieces to be stuck together to work in an efficient manner? Do the various risks involved with placing the function in-house or in the cloud match with the organisation’s corporate risk strategy?” he asks. CIOs should be prepared for more dilemmas, he says. “What is Plan B should our chosen provider go out of business, be acquired by a company we don’t like or if service levels fall below our requirements? Who owns any data created, and how can we get our hands on it?”

Resourceful thinking Meanwhile, within the datacentre, cloud technology will bring about efficiencies. Cloud-oriented datacentres will have a much more intelligent infrastructure. Resources will be automatically re-allocated and moved around to create a more fluid management of resources. Schneider Electric and VMware, for example, have created a joint system that brings the physical layer of a datacentre – heating, lighting, cooling systems and power consumption – into the domain of a virtualisation system. What this means, in practice, is that when a fan or cooling system breaks down and the temperature around a server pushes up, a virtual server can be found a new home automatically, before its current hardware home crashes. So pro-active management of the datacentre can be automated, an efficiency created entirely out of techniques honed by the disciples of cloud computing and virtualisation. The greater control and rapid scalability in an on-demand environment could help CIOs head-off problems or institute solutions rapidly. Legal and regulatory demands mean many business applications can’t go near a cloud model. The Sarbanes-Oxley Act prevents legacy systems and mainframe datacentres from being moved out of a fixed location, and business-critical or commercially sensitive information that is best policed in house will help maintain the traditional passive role of many datacentres. But does that prevent the use of cloud in the datacentre? Yes, the data has a virtual home, but is it confined within one warehouse? The added complexity of a virtual layer will only make people more conservative, says Rob Neave, VP of sustainable IT initiatives at datacentre vendor Nlyte Software. You need to argue that better datacentre infrastructure management will help prevent waste. “Whichever model of application and data management and access prevails, datacentres will always be needed and cannot possibly be rendered non-existent,” says Neave.

Public concerns But if you are a CIO in the public sector, the gathering cloud could be ominous, warns Mark O’Conor, partner and cloud computing specialist at law firm DLA Piper. With the public sector looking to consolidate its datacentre usage there’s a general perception that huge numbers of dormant datacentres and staff could be combined. “There will be consolidation at a corporate level as huge server farms are created,” says O’Conor. “There are interesting issues about where the datacentre is, how politically acceptable it would be for a datacentre to be offshore, and how an industry’s regulatory regime requires data to be treated.” The datacentre industry also needs to be more flexible in delivering services to end-user organisations, says Nathan Marke, CTO at ICT service provider 2e2. According to research by 2e2, 91 per cent of UK businesses want a blended or hybrid cloud model, as their infrastructure comprises on?premise, private and public clouds. “Customers want to pick and choose which apps are kept in which type of cloud,” says Marke. Datacentre providers must cater to this level of flexibility. But isn’t this a pretty tall order, given that business applications are increasingly being interlinked? Any engineer knows that the more moving parts there are in any machine, the more likely it is to break down. Datacentre providers must ensure that they are able to help customers manage the potential complexity the cloud will bring, warns Marke. For a simple historical context, we need to look back how mainframes were affected by the arrival of client-server, says Mac Scott, associate director at consultancy Xantus. “It’s likely that new computer and data loads will move to the cloud, but unlikely that this will replace any or all of the existing traditional datacentre computer and data loads,” says Scott. “In the short term there will be lots of work for datacentres and network staff integrating all of the old stuff with cloud in hybrid models.” In that case, CIOs should expect a shortage of people with integration and networking skills. But in the long term, you could find yourself letting go of low-level infrastructure IT staff.

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IT specialists in infrastructure sustenance will see their jobs industrialised away, says John Landau, VP of global managed services at Tata Communications, just as automation has done in many other industries. “Most of these people will repurpose towards new IT value,” says Landau. Although this is an issue that CIOs may be dragged into, they are more likely to be concerned that IT budgets will be rebalanced more than reduced significantly. First, cloud services are being used for small tasks in an enterprise datacentre. Their primary effect will be efficiency, as currently 85 per cent of corporate servers reside in small inefficient server rooms according to Savvis research.

Mixed environment For many of these servers, a shift into the cloud may be best in the long term, but a hybrid of legacy servers, co-location, managed services and cloud is the most likely intermediate step. “Whatever route is taken, the shift from server room to hosting will drive datacentre growth,” says Brian Klingbeil, general manager of Savvis’s hosting and cloud business unit. “When a CEO asks why you are not using or recommending cloud and you are not able to provide a good business reason, life might get a little difficult,” warns Klingbeil. The cloud won’t kill off the datacentre, but it is the end of the datacentre as we know it. The exaggerated promises for cloud computing in the enterprise community have inevitably led to misconceptions about what the ‘cloud’ actually is and which role the datacentre should play.

The success of the cloud computing model is dependent on a robust and reliable physical layer in the datacentre. With content more bandwidth-intensive, new applications emerging and the number of enterprise users increasing, consistently high performance is critical. This places a much higher level of importance on the network’s physical infrastructure as this is the lightning rod from the desktop to the cloud.