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The Emergence of Private Clouds

By Chuck Hollis

EMC Innovation Conference celebrates creative thinking

I've worked in the IT industry my whole professional life, and I can point to major inflection points that changed everything from that point onward. Maybe it wasn't obvious just how important something was when I first saw it, but—before long—it would be.

I got my hands on my first microprocessor-based computer when I was still in grade school. I remember thinking, "Gee, it won't be too long before everyone's going to have one of these things."

Early in my career, an engineer showed me how he could log onto another computer using something called "the Internet." Again, I had to take a moment and think about the implications of a world where every computer could talk to every other computer.

Virtualization is one of those evolutionary steps in IT. Like the Internet, it changes everything.

On March 10, EMC Corp. CEO Joe Tucci and VMware CEO Paul Maritz both spoke publicly for the first time about how virtualization is poised to change the very nature of enterprise IT and essentially turn it into a service. They committed EMC and VMware to a new strategy to accelerate this change.

For employees and participants in the IT industry, this is the next transformative event. It's the real deal. I consider myself extremely fortunate to be working for the company that's going to change everything in IT in the next few years. These chances don't come along very often!

So, what's the big deal? Simply put, virtualization puts the important stuff—applications and information—in standardized "shipping containers." It does this not only for applications running in data centers, but desktop experiences as well.

Imagine trying to ship a bunch of stuff without shipping containers, labels, tracking systems, etc.  It'd be horribly inefficient. Unfortunately, that's how most of IT is run these days.

In recent years, IT organizations have put applications and information into "virtual containers" using VMware and seeing how much more efficient things can be. Now they're feeling ready for the next step. And it's when the big changes will start.

The first big change is that enterprise IT can start running IT infrastructure as a giant pool of resources. (Today, it's largely one application to one server, which is horribly inefficient.) In a fully virtualized model, all resources are pooled—servers, network, storage. Applications take what resources they need and give back what they don't.

You'll hear people describe this as a "virtualized data center" or perhaps an "internal cloud."

From an EMC perspective, this change alone presents enormous opportunity. For example, storage must be designed and managed differently. New requirements arise for information management products that handle backup, archiving, and business continuity. New tools and processes are required to plan and manage IT resources and ensure information security. From a services perspective, these environments are built and operated entirely differently than today.

There are enormous implied changes for every EMC product and service if you think about it. For example, many EMC products require a dedicated pair of servers. Being able to run that software in virtual containers would bring enormous advantages to our customers and to us.

How much more efficient is the new way compared with the old? The potential is breathtaking—capital and operational costs might be only 30-50 percent of what customers spend today.

Now, if your IT shop is spending $1 million a year running IT infrastructure, the potential of saving $700,000 per year is attractive. But if your IT shop is spending $1 billion a year running IT infrastructure, the prospect of saving $700 million just can't be ignored—period.

The bigger your IT shop, the more compelled you'll be to make this transition sooner than later, especially if the economy isn't doing so well.

This change alone could be enough to get everyone in IT excited. But another aspect could turn how we think about enterprise IT entirely on its head.

Let's go back to our shipping container example. Consider, for a moment, that you can ship stuff without needing to own any trucks, airplanes, or trains, but you'll still know where your stuff might be or when it's going to get there.

The same will be true in the fully virtualized IT world. When you put important stuff (applications and information) in a virtual container, you don't have to own the plumbing. You could ship your applications to a compatible service provider if you wanted—or take them back again if things change.

If you're an enterprise IT shop, you've got important choices to make about how much IT infrastructure you'd like to own, and how much you'd like to rent.

This isn't true only for server applications; it's true for desktop devices. Imagine being able to use any desktop device, anywhere, any time, and get the exact same user experience with your applications and your files—maybe even your overgrown cellphone—just there!

EMC and other vendors have started to use the term "private cloud" to describe this new model. All applications, desktops, and information live in virtual containers. Enterprise IT organizations can choose either to pool their owned IT assets or federate with external service providers.

If you're an outsourcer, service provider, or telco, you can easily see an enormous opportunity to set up compatible infrastructure—based on virtualization—to meet the needs of these new customers. If you're a systems integrator or consultant, you see an enormous opportunity to help your clients get from the old world to the new one sooner.

The more you think about it, the more excited you get.

Tucci and Maritz have now publicly committed EMC and VMware to this vision. They also identified Cisco as a key partner in this journey. If you think about it, the network starts to play an even more significant role now, and Cisco has recently entered the market for server infrastructure designed for this new world.

Some long-term implications exist about where IT spending will flow over time. Clouds in general—private clouds specifically—get more efficient the bigger they are. Over time, I wouldn't be surprised if more midmarket IT customers end up preferring to rent IT infrastructure capacity from a service provider or telco, rather than own those servers, networks, and storage.

Is this private cloud model really new? Yes and no. It's new to IT but not to other forms of infrastructure. This model is how we use telephones, how we power homes and factories, how we ship products globally. The transformation of infrastructure into a service is finally catching up to IT. That's pretty exciting!

Chuck Hollis, EMC VP and Global Marketing CTO, speaks frequently to customer and industry audiences about technology topics and is considered one of the enterprise IT industry’s top bloggers.

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