Will the Phone Company Run Your Data Center?

I love meeting people who rode one tech wave and have come back for more. They not only understand the big picture, but also present the most intriguing ideas. Last week, I got to meet Bill Coleman — he’s the B in BEA Software — who now runs a company called Cassatt. Cassatt’s tools help large enterprises get the most from their data centers and virtualization efforts. (Companies use Cassatt’s tools to ensure service level automation, balance hardware loads, and — here’s the cool part — dynamically shift hardware resources on the fly. Coleman says most data centers are significantly over-provisioned now, in terms of both hardware and software, and it’s easy to see how dynamic shifting of resources could cut costs and improve flexibility.) The technology is interesting stuff, in itself. But Coleman left me with an even more interesting idea: Would you as CIO trust the phone company to run your data center?

Coleman predicts that within 10 to 15 years, you CIOs of large enterprises will do just that, leaving almost the entire operation of your data centers to the likes of AT&T, Verizon or BT. You’ll pay for data center horsepower the way you pay for electricity or gas. You’ll maintain control via console software.

Why does he envision this shift? First, technology is making it more possible to automate data center tasks and measure data center output, he says. Second, CIOs would love to stop worrying about the everyday operational aspects of the data center and focus more on strategic business issues. Third, given this scenario, you wouldn’t have to support a big roster of IT employees to care for your data center; the phone company’s employees would do it for you. You’d pay the phone company for this service based on how much compute power you actually used. Coleman calls the idea utility computing.

And by the way, he says, since there will be intense global competition among these firms to win your business, the prices will be reasonable.

My first reaction: Would CIOs really be comfortable with this approach to such a key responsibility? And would telecom companies be able to properly secure and protect all this precious data, in this day of complex compliance requirements and ever-morphing security threats?

Coleman says the idea is in the ten-year plan of one of his biggest customers, a company whose name you know well.

Think of the implications if this vision comes to pass: For starters, data center hardware becomes more commoditized. There would be massive consolidation among hardware companies. What would it mean for innovation? Maybe not such good news. When was the last time you heard about a big breakthrough in phone company equipment?

A colleague of mine had a reasonable take on the idea: It’s a vision. It won’t come to pass. CIOs will not be comfortable shipping out this much data center responsibility. The security question alone will be too tough.

So, CIOs, what do you think? Is Coleman’s vision one that’s reasonable? One that would solve some of your biggest strategic wishes? Or simply one that’s too far out? Let’s hear what you see in your data center’s future in ten years. I’m intrigued.