Datacenter Knowledge published an interesting article today entitled Data Center Leasing: It’s All About the Megawatts. The article discusses how electric power, or the lack of it, is changing the business of data center leasing:
“The growing importance of electric power is remaking the business of leasing data center space, with megawatts replacing square feet as the primary benchmark for real estate deals.
“Our business is all about leasing access to power,” said Michael Foust, the CEO of Digital Realty Trust, the largest data center developer landlord. “The square footage is almost secondary in some cases.”
The consumer perspective:
“If your company isn’t measuring whatever the widget is by kilowatts, you need to,” said Chris Crosby, VP of business development at Digital Realty. “Power is really the key element for measurement. The clients that understand things in these terms make the best decisions.
“If you talk about square footage in the data center, you’ll get confused in your buying decision,” Crosby added. “Getting an understanding of your kilowatts will give you a lot of insight into your costs.”
The article then describes a leasing decision scenario for Currenex:
“An example is Currenex, an electronic trading platform specializing in the foreign exchange markets. The company’s business was growing quickly, but its two third-party data center providers had limited capacity.
“We were operating in data centers that were out of power,” said Chad Parris, VP of technical operations at Currenex. “We’re not big enough to build our own facility, so it became tempting to buy cage or cabinet solutions (in colocation centers).”
Instead, Currenex performed a detailed analysis of the power required to execute its trades, and then used those numbers to convert daily volume of foreign exchange trades into kilowatts. This allowed the company to model its future power needs based on estimates of its future trading volume.
Currenex wound up leasing 2,500 square feet space in a Digital Realty data center in New Jersey, with an option for additional space as its operation expands. The wholesale data center model “was the cheapest way to buy a long-term position in kilowatts,” Parris said. “In year four, our cost per kilowatt a month is about a third of what it would have been.””
——
Why is this interesting? After all, data center leasing doesn’t equate to cloud computing. As the economy recovers, there will be greater demand for all types of energy, which will raise all energy prices, including electricity. Understanding the kilowatt component of your workloads will enable better financial analysis on transaction run costs across computing environment destinations: traditional datacenter, outsourced datacenter, internally owned and managed clouds or third party owned and managed clouds.
Additionally, if the cloud computing environment providers start breaking out kilowatts as a pricing factor, you will be prepared.
Tagged as:
datacenter,
economy,
electricity
Posted by brenda michelson at 3:51 pm in Cloud Watch, billing & metering, economics | Permalink
| Comments(0)
| Trackback URL
McKinsey just published a new premium report, Time to raise the CIO’s game. According to the report, the post downturn “new normal is marked by persistent uncertainty, tighter credit, lower consumer spending, and greater government involvement in business.”
The report continues:
“For executives who run major IT organizations, the implications are clear: they will have to make the IT function dramatically more productive, use IT more effectively to meet larger company goals, and embrace disruptive technologies that will shape the new economic terrain.”
The full report speaks to improving business-IT alignment, making fundamental IT changes, as well as embracing technology-based innovation. The report is supported by a recent survey and focuses on Europe. However, as the report states, much of the advice can be applied globally.
Finally, the “Cloud Watch” piece. In a section on “Closing performance gaps”, McKinsey shares the following:
“Since the downturn began, many CIOs have scrambled to control costs by delaying investments where possible and pushing service providers to cut prices. Some CEOs are raising cash through the sale and leaseback of assets such as data centers. But as competition intensifies, a more fundamental restructuring of IT operations will be in order.
Certain companies are rethinking their current approaches to procurement in hopes of replacing the current model of capital spending on infrastructure with a more flexible approach to operating expenditures. Cloud computing and software-as-a-service, for example, allow companies to purchase computing power and application services that scale with demand and thus to avoid large capital outlays on infrastructure capacity to meet peak loads. The cash savings from such efforts can be critical for self-funding additional IT investments: shifts in certain basic IT operations, for instance, could finance a streamlined IT architecture that will improve long-term productivity.”
[emphasis is mine]
Tagged as:
business drivers,
CIO,
economy,
McKinsey
Posted by brenda michelson at 5:59 pm in Cloud Watch, economics | Permalink
| Comments(0)
| Trackback URL
On October 28, 2009 Joyent announced the launch of a cloud computing platform in China:
“Joyent becomes China’s first Cloud Computing vendor at a time where computing infrastructure is in very high demand. The company’s data center is located in the Qinhuangdao Economic and Technological Development Zone (QETDZ), Hebei Province, China. This announcement coincides with the QETDZ’s Investment Attraction Week.
“China is the world’s fastest growing economy and Joyent is there with the country’s first local Cloud Computing offering”, said David Young, CEO and Founder of Joyent. “This is definitely a very exciting and positive move for Joyent. We would especially like to thank our partners, QETDZ and Intel for their support in making this expansion possible. We are looking forward to providing the Chinese developer community and China’s enterprises with world-leading Cloud Computing technology.””
In a related blog post, Joyent spoke of the initial offering, the customer base and the ethical considerations:
“Today, we have opened a limited service of the Joyent Cloud to customers within mainland China and will be opening to the general public later this year. We are happy to be working with Intel and the Qinhuangdao Economic and Technology Development Zone, to bring the best infrastructure cloud computing service to customers in the Peoples’ Republic of China.
Joyent offers the best cloud for one of the fastest growing economies in the world today. Joyent will be bringing our full line of services to mainland China. We have been very impressed by the entrepreneurial and geek spirit of customers we have meet in China. Further, we have been very impressed by the open spirit of the officials of the development zone as their vision leap frogs server-hugging infrastructure for the future of the cloud: Joyent. We are excited to bring the Joyeur spirit to China.
Does our presence in China represent an ethical problem for Joyent? Isn’t the Chinese government known for censoring the internet? How can Joyent take part in that system? By entering the Chinese market, Joyent is signing up to play by the rules of the Chinese market. Joyent’s presence in the Chinese marketplace is our commitment to participate in the on-going conversation that is China moving between the systems of the past, and the aspirations of Joyent’s customers of the future. Joyent could not participate in the Chinese market were this conversation not vibrant and developing brilliantly…”
——–
Briefly: Why is this important?
1. Global expansion, particularly to an enormous market such as China, represents a boon for cloud computing in general, and specifically, is a big win for Joyent.
2. Given China’s potential as a true economic power, read competitive threat, it’s interesting to consider how that might be accelerated by sharing computational resources, therefore decreasing lead times and capital outlays for individual enterprises.
Tagged as:
China,
economy,
Joyent
Posted by brenda michelson at 10:55 am in Cloud Watch, cloud computing environment (cce), economics | Permalink
| Comments(0)
| Trackback URL
