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July 11, 2006

Web 2.0 brings operations back

Posted by David Hunter at 9:10 AM ET.

The arcane science of IT operations never really went away, of course, but the transition from raised floor glass house to client-server to Internet seemed to make it less visible and deemphasized physical plant in favor of the management of numerous servers. Now, however, the advent of online Web services with the vast server farms required has brought operations back to prominence again, but with a completely different slant. Tim O’Reilly:

I spoke last week with Debra Chrapaty, the VP of Operations for Windows Live, to explore one of the big ideas I have about Web 2.0, namely that once we move to software as a service, everything we thought we knew about competitive advantage has to be rethought. Operations becomes the elephant in the room. Debra agrees. She’s absolutely convinced that what she does is one of the big differentiators for Microsoft going forward.

People talk about “cloud storage” but Debra points out that that means servers somewhere, hundreds of thousands of them, with good access to power, cooling, and bandwidth. She describes how her “strategic locations group” has a “heatmap” rating locations by their access to all these key limiting factors, and how they are locking up key locations and favorable power and bandwidth deals. And as in other areas of real estate, getting the good locations first can matter a lot. She points out, for example, that her cost of power at her Quincy, WA data center, soon to go online, is 1.9 cents per kwh, versus about 8 cents in CA. And she says, “I’ve learned that when you multiply a small number by a big number, the small number turns into a big number.” Once Web 2.0 becomes the norm, the current demands are only a small foretaste of what’s to come. For that matter, even server procurement is “not pretty” and there will be economies of scale that accrue to the big players.

Blaine Harden at the Washington Post had more last Sunday on the odd history of low cost power in Quincy, WA and on the subject of server provisioning, see what David Carr and the CIO Tech Informer have to say how about how Google builds its custom server infrastructure.

Of course, there’s more to it than just bricks, mortar, megawatts, servers, and other gear. The applications have to be deployed and managed over thousands of machines at multiple data centers, and most of all, they have to actually work in such an environment. Dare Obasanjo:

I remember talking to a coworker about all the changes we were making so that MSN Spaces could be deployed in multiple data centers and he asked why we didn’t get this for free from “the platform”. I jokingly responded “It isn’t like the .NET Framework has a RouteThisUserToTheRightDataCenterBasedOnTheirGeographicalLocation() API does it?”.

The subtext here is that only a few of the big players like Google, Yahoo, and Microsoft are ever going to fully develop these competencies and of the players, only Microsoft completely develops its own platform. Back to O’Reilly who kicks the following argument back and forth:

Internet-scale applications are pushing the envelope on operational competence, but enterprise-class applications will follow. And here, Microsoft has a key advantage over open source, because the Windows Live team and the Windows Server and tools team work far more closely together than open source projects work with companies like Yahoo!, Amazon, or Google.

Regardless of who has the advantage, it’s clear that there’s a divide building and the question is how much of today’s enterprise and personal computing gets pushed across into the new world of hosted online services. Nicholas Carr refers to it as the Utility Age of IT which would be better if the term “utility” hadn’t been so abused during the dotcom boom, but what else would you call the few big players who own the massive, geographically dispersed datacenters? And as long as you are calling them “utilities,” what do you say when someone gets the idea to regulate them like a conventional utility? That may seem far-fetched, but if the computing assets and resources of a very large number of users no longer exist in their desktops, but in ubiquitous online services hosted in a huge building in Quincy, Washington you can bet that the politicians will want to get in on the action.



Filed under Amazon, Coopetition, General Business, Google, Governmental Relations, Microsoft, Online Services, Real Estate, Yahoo

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