Assets and Liabilities in the Data Center

Abundant advice is available on such build-or-buy questions as whether to rely on public clouds, private clouds, hybrid clouds, leased datacenters, on-premises buildouts, and so on. Less common: strategic counsel that gets to what I see as the real heart of information technology (IT) provisioning.

I’m a big believer that the important generalizations in today’s economy are:

While the latter is a mouthful, its application is apparent every day in data centers around the world. Mark Tonsetic, Managing Director at Corporate Executive Board, illustrates this well in his “Deliberating data center development, evolution and investments“: “Several sectors, from financial services and logistics to high-tech manufacturing, have invested heavily in data centers to promote and preserve their competitive advantage.” With so much turmoil and opportunity in IT, though, “… the ‘data center of the future’ isn’t necessarily a matter of new investments and technologies. It really begins with the question of whether the data center should continue to exist in its present form and consume capital that might, over the long term, see more return elsewhere.” For Tonsetic, “Hosting and storage in 2015 are simply unlikely to require the same data center capabilities that most large enterprises support today.”

Bluntly, capital is fungible. CPU cyles and mass storage are fungible. Detailed, practical knowledge of how to leverage IT to relate effectively to your customers, suppliers, and employees is … not so easily replaceable.

This insight has a consequence: what matters strategically is what the organization decides matters. While leasing VMs from Rackspace has a different operational profile from, say, building in a greenfield in northern Michigan, smart organizations make both approaches work. What truly matters is not cloud vs. physical assets, but the will and knowledge to make either choice work as well as possible. All the cosmetics commoditize rapidly; left is organization-specific experience at application of standard computing units to organization-specific workflows that generate value.

That’s most of the reason I’m so conservative in regard to storage. I don’t want to save 5% or even 30% in operating costs or seek times, at the expense of multiplying my risk of catastrophic loss two or five years from now. That’s not a trade I consider responsible.

What technologies make your IT more nimble than it is now? What assets will help you make the most of the next opportunity you can’t predict, rather than holding you back when it arises? Those are the interesting questions now. Figure out the right answers for your organization, and details about how you should relate to The Cloud or software-defined networks (SDN) or other hot trends will quickly clear up.