VMware makes the smart move, Wholesale Lease vs. Build and Own

One of my good friends introduced me to a SW company that was going to build its first data center.  I told them why build, it is your first one.  Just lease three 2MW wholesale data center spaces.  You'll get a great price given your brand name recognition and you'll have three places to start your consolidation for the dozens of co-lo facilities around the world.  No, we've spent a lot of time with Gartner and we know what we are doing we are going to build our own. One year later I run into the consulting firm that brags they are building a 7.5 MW data center.  yeh, yeh.  you're building a small one when they have over 27 MW of space now.  One year later they finally pick a site.  One year later the IT exec leaves the SW company, and the data center is still not built.

I tell this story, because it is amazing what people will do to convince themselves that their move into data centers is to build their own data center and they don't seriously consider wholesale in multiple markets.  There will be plenty of consultants, site selection experts, analyst that will tell you why it is good to build a data center.  But, some of the smartest guys I know have figured out it is lower cost and faster time to market to lease wholesale than build their own data center.  

Case in point, VMware's announced 4 city cloud environment in Santa Clara, LV, Dallas, and Sterling will be in wholesale space. 

VMware is also in a poor position to compete by building ultra-modern data centers, as Facebook did in Prineville, Ore., and Forest City, N.C., and then offering low-cost compute cycles out of such infrastructure. On the contrary, VMware won't build anything. It will lease space from wholesale data center builders. It will then wheel in racks of servers, most likely from its Virtual Computing Environment (VCE) subsidiary, based on partner Cisco's converged compute and networking infrastructure, and throw on the switch.

With VMware going with a wholesale strategy, there may be more who understand that leasing wholesale can be more cost effective than building.  Maybe the folks at VMware after being in dozens and dozens of data centers for their VMware users have figured out their own data center market survey of what is cost effective.  The VMware guys are able to get 4 sites up and running in a fraction of time and cost compared to the executive I mentioned at the beginning who thought building a data center was the right answer.

One simple way to think about why this works is if you are brand name company with a pretty good footprint you can become an anchor tenant in a wholesale space.  Even though there are agreements that the client list is kept confidential, almost everyone knows who is connected to the inner circles find out who is in the space.  It's no different when famous people move into a high end apartment in NY.  With a stamp of endorsement that is good enough for the big brand name, the lesser known companies can be charged more to be in a space that was good enough for the rich and famous.  This is no different than the cachet that Apple has opening a retail store in a mall.  You know Apple is paying the lowest cost per sq ft, given they drive shopper traffic to the mall.

There is staff that VMware will be adding to run the data centers and here are some of the job posts.

Data Center Supervisor Job	Las Vegas, NV, US	May 4, 2013
Data Center Supervisor Job	Reston, VA, US	May 9, 2013

Data Center Engineer (Night Shift) Job	Las Vegas, NV, US	May 4, 2013
Data Center Engineer Job	Las Vegas, NV, US	May 7, 2013

Data Center Engineer Job	Reston, VA, US	May 9, 2013
Data Center Engineer Job	Reston, VA, US	May 9, 2013
Data Center Engineer Job	Reston, VA, US	May 9, 2013
Data Center Engineer Job	Reston, VA, US	May 4, 2013
Data Center Engineer Job	Reston, VA, US	May 4, 2013
Data Center Engineer Job	Reston, VA, US	May 4, 2013

VMware's first Wholesale space was in Sabey.

VMWare POD 3 - Sabey Data Center

Wenatchee, Washington

 

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Hermanson completed Full Mechanical construction for this fast-tracked installation of a new data center in shelled out space. The total project area is approximately 21,000 SF and consists of 15,000 SF of “data hall” space for IT/Lab equipment, plus electrical rooms and a grey water equipment room. The scope of work includes the installation of new self-contained package units that will include outside air economizer capability and evaporative cooling, a new grey water system, construction of hot aisle containment, with new diesel powered standby generators with exhaust pipe risers on the exterior of the building and a new diesel fuel tank. The generator room requires additional fresh air intake louvers in the wall of an existing penthouse and additional radiator discharge louvers in the existing tilt-up concrete exterior walls.

Hiding your intent in the public, cloaking technique used by teens documented

Danah Boyd post on Pew's report on report on Social, Media, and Privacy and she closes with this paragraph.

Over the last few years, I’ve watched as teens have given up on controlling access to content. It’s too hard, too frustrating, and technology simply can’t fix the power issues. Instead, what they’ve been doing is focusing on controlling access to meaning. A comment might look like it means one thing, when in fact it means something quite different. By cloaking their accessible content, teens reclaim power over those who they know who are surveilling them. This practice is still only really emerging en masse, so I was delighted that Pew could put numbers to it. I should note that, as Instagram grows, I’m seeing more and more of this. A picture of a donut may not be about a donut. While adults worry about how teens’ demographic data might be used, teens are becoming much more savvy at finding ways to encode their content and achieve privacy in public.

This technique of cloaking is not anything new.  The Chinese micro bloggers have learned to use this method to say things that don't trip censorship filters.

Pew report says

Other privacy protecting and obscuring behaviors

Many teen social media users will make the content they share more private by obscuring some of their updates and posts, sharing inside jokes and other coded messages that only certain friends will understand; 58% of teen social media users say they share inside jokes or cloak their messages in some way.45 Older teens are considerably more likely than younger teens to say that they share inside jokes and coded messages that only some of their friends understand (62% vs. 46%). Girls and boys are equally likely to post inside jokes and coded messages, as are teens across all socioeconomic groups 

In the data center world this is no different than inside jokes.

An in-joke, also known as an inside joke or in joke, is a joke whose humour is clear only to people who are in a particular social group, occupation, or other community of common understanding. It is an esoteric joke which is humorous only to those who know the situation behind it.

In-jokes may exist within a small social clique, such as a group of friends, or extend to an entire profession such as the film or professional wrestling industries, or a particular sporting endeavour. Even an ethnic or religious group may have its own in-jokes.^[1]

 I often use this same cloaking technique as I can say things to a specific set of readers that to others just looks like a regular blog post. :-)

Where is the VMware Cloud? Santa Clara, LV, Dallas, Sterling

Yevgeniy Sverdik tweets on the location of VMware's cloud.

 Following

Yevgeniy Sverdlik‏@yevgeniy_s

#VMware public cloud initial data center locations and two service offerings in a slide pic.twitter.com/iSSzAB7lQV

 

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Detroit vs. Iowa Data Centers, GM vs. Detroit competing for the IT talent

Chris Crosby has a post on Detroit as a data center location and brings up the folks in Iowa with Facebook.

Detroit. The Data Center Capital of America

Life is good in Altoona, Iowa. With the coming of Facebook, servers will quickly outnumber the community’s 15,000 residents and the city is poised to become one of the country’s leading data center destinations. The citizenry of Altoona are, of course, ecstatic at their good fortune. The economic benefits alone are too numerous to consider. The police department is contemplating adding a second car, the country club might add nine more holes so members can play a full 18, and there’s a rumor going around that Krispy Kreme might be coming to town. Yes indeed, the gentrification of Altoona has begun—and good for them. I have nothing against the good people of Altoona. And yet I have to ask, “Why Altoona?” Why this small oasis in the Hawkeye state as opposed to say, the Motor City? That’s right, why not Detroit? I pose this as a serious question. I realize that a few of you effete data center snobs might snort in derision at the mere mention of this discussion, but really, what has Altoona got that the buckle of the Rust Belt doesn’t?

Coincidentally, GM has been making some news not nearly as widely covered as Facebook on its data centers in Detroit.

Facebook adding to its existing infrastructure is actually less transformative as GM going from its past of outsourced IT to data centers it owns and runs.  GM has recognized that IT infrastructure is critical to its success just like Facebook.

The GM renaissance of IT, canceling outsource contracts, building state of the art data centers I think is actually a cooler story to read about the transformation of IT than just another Facebook data center.  WSJ tells the history of how in 2011 a three day HP mainframe shut down woke up the CIO how ancient their IT infrastructure is. 

Hewlett-Packard Co. ’s outsourcing relationship with General Motors Co. may have been doomed regardless, but the last straw might have occurred in October 2011, early in GM CEO Dan Akerson’s tenure, when a mainframe computer that H-P operated on its  behalf went on the fritz for three days.

“All of a sudden we started having slowdowns in our manufacturing around the globe.  A bell went off in my head,” Mr. Akerson told the Wall Street Journal in an interview earlier this year. “It was so fundamental you just assumed that a company of our stature, our size, our complexity, our global reach, you had to have a 21^st century IT infrastructure. We didn’t.”

General Motors Co.CIO Randy Mott

The outage meant that GM suppliers couldn’t be sure how to fill certain expected orders and had to guess at the details, according to Jeff Liedel, executive director of infrastructure engineering at GM. He said the outage probably “couldn’t have gone on longer, without forcing us to shut plants down.”

Here is a B-roll video with no sound that shows the new data center space.  It's not as sexy as a Facebook data center and the dress shirts with slacks don't look anything like the jeans and t-shirt culture.

The enterprise data center and a companion data center at the Milford Proving Ground are part of a previously announced plan to transform GM’s global IT footprint from 23 facilities to two by 2015. Construction of the $100 million data center expansion in Milford will begin this summer.

GM IT is leveraging the Warren and Milford data centers to create a secure, private cloud that allows super-computer applications, servers and data storage to be efficiently and quickly accessed among multiple users.  

“Our data center consolidation is just one of the initiatives driving the transformation of GM’s business,” said Randy Mott, GM vice president and CIO. “It’s part of an overarching strategy to transform not only information technology but also allow GM’s business operations to be more responsive to our customers, quicker to market and deliver on our objectives to shareholders.”

GM has a 2nd data center to provide an active fail over site where data can be mirrored.

The Milford location was chosen because it is more than 25 and less than 50 miles from Warren, allowing “mirrored” data, so if one facility is off line for any reason, the other will have the same data available without interruption.

"It's all about reducing risk and making sure no one event would affect both centers at the same time," said Curt Loehr, GM Information Technology project manager. "Each Center has its own utility feed using separate paths to provide uninterrupted power.  We even checked weather data going back a half century and Warren and Milford are affected by separate weather patterns." 

GM is saving money by having the data centers on existing campuses, which have negotiated bulk utility rates, existing infrastructure and security.

I guess I kind of felt compelled to write about GM given I have a Cadillac CTS as a rental car.  no comments on the car.  The data center is way more interesting. 

Looking for where to save time in projects, lessons from container revolution

Long before I worked in data centers, information warehouses, I used to work in physical warehouses for HP and Apple as a distribution engineer.  Pallets, forklifts, boxes, bar codes, and processes were what I worked with every day.  When containers arrived to data centers so many people made a big deal of it, but I had seems containers used over 30 years go to move massive quantities of goods and having containers to encapsulate IT white space is interesting, but not even close to as revolutionary containers were to the shipping industry. 

The Economist has an article on Containers where they discuss how innovative containers were.

Innovation

Big bills left in the shipping container

May 20th 2013, 21:16 by R.A. | WASHINGTON

I LOVE the history of the shipping container. Nothing could be more confounding to our usual ideas about innovation, stagnation, and technology.

And Contaners were a simple idea created by the execs not some whiz kid.

Except that's not how it works out. And not because an inventor came up with a revolutionary new technology. Instead, a few savvy shipping magnates figured out a better way to do things. A much, much better way.

The new system was simple. Customers or aggregating shipping firms would pack their cargo into giant, purpose-designed metal boxes. The boxes could be loaded on truck or rail trailers for transport to port, where purpose-built cranes would swing them onto purpose-built boats that don't carry anything but containers. Cargo could travel from factory to destination without ever being handled by a human. 

When you feel like there aren't any interesting opportunities turn around take a look behind you.  There may be some really good opportunities in your past that you didn't see.

Obviously container shipping revolutions don't come along every day. But I find this history to be a powerful antidote to economic pessimism. It's as if humanity faced a stand of trees stripped of low-hanging fruit and despaired of further economic gain, only to have someone shout, "Hey, there are also a bunch of trees behind us!"