I’ve been thinking about what to write as a response to James Hamilton’s blog post on Private Clouds are not the Future.  It is well written and logical in its efficiency.

Last week Alistair Croll wrote an excellent InformationWeek article arguing that “the true cloud operators will have an unavoidable cost advantage because it's all they worry about. They'll also be closer to consumers (because they have POPs everywhere and partnerships with content delivery systems), and connecting with consumers and partners will become an increasingly essential part of any enterprise IT strategy.” Have a look at Private Clouds are a Fix, Not the Future.

Private clouds are better than nothing but an investment in a private cloud is an investment in a temporary fix that will only slow the path to the final destination: shared clouds. A decision to go with a private cloud is a decision to run lower utilization levels, consume more power, be less efficient environmentally, and to run higher costs.

But  I am glad I waited, because Mike Manos posts his response to James’s posts and makes the case for private clouds. 

Private Clouds – Not just a Cost and Technology issue, Its all about trust, the family jewels, corporate value, and identity

January 24, 2010 by mmanos

I recently read a post by my good friend James Hamilton at Amazon regarding Private Clouds.   James and I worked closely together at Microsoft and he was always a good source for out of the box thinking and challenging the status quo.    While James post found here, speaks to the Private Cloud initiative being what amounts to be an evolutionary dead end, I would have to respectfully disagree.

I agree that there is more than the technical and economics benefits of shared clouds.  Human nature in trusting others and risk management are big factors in cloud computing adoption.

But this brings up one of the key criticisms that this is not just about cost and technology.   I believe what is really at stake here is much more than that.

Mike has a perspective many don’t.

In my role at Digital I have visibility into tens of data centers, across hundreds of customers that span just about every industry.  There is not, nor has there been a massive move (or any move for that matter) to become more efficient in the utilization of their resources.   We have had years of people bantering about how wonderful, cool, and how revolutionary a lot of this stuff is, but world wide Data center utilization levels have remained abysmally low.   Some providers bank on this.  Over subscription of their facilities is part of their business plan.  They know companies will lease and take down what they think they need, and never take it down in REALITY.  

and Mike Repeats a standard view that most likely many top executives have when looking at technology adoption like cloud computing.

The cloud is an interesting place, today.  It is dominated by technologists.  Extremely smart engineering people who like to optimize and solve for technological challenges.  The actual business adoption of this technology set has yet to be fully explored.   Just wait until the “Business” side of the companies get their hooks into this technology set and start placing other artificial constraints, or optimizations around other factors.  There are thousands of different motivators out in the world.  Once they starts to happen earnest.  I think what you will find is a solution that looks more like a hybrid solution than the pure plays we dream about today.

Is the Private Cloud Dead or Alive?

I vote alive.