Microsoft Corp. (Nasdaq: MSFT) and EMC Corp. (NYSE: EMC) are just a couple of IT's heavy-hitters that have been talking up cloud infrastructure. Actually, not just talking about it; they’re pouring a lot of money into building it -- as in bricks and mortar, servers, concrete, wiring looms... big honking data centers to provide infrastructure for the cloud.
I really wonder why this whole cloud infrastructure deal isn’t being talked about more, because, as far as I can fathom, it represents a huge shift in the business of tech. EMC, for example, hasn’t been so much about storage boxes as it’s been about storage software for a long time. Telecom switches stopped being about hardware way back when. Microsoft (Xbox and Zune notwithstanding) has always been about software. The last three decades of IT have been about the shift away from hardware power bases to software and, lately, services.
Isn’t the cloud the latest evolution of this shift to software and services? Sure, I buy that. But what fascinates me is how people are going about trying to realize the cloud.
If I build myself big, bad data centers all over the world with the fattest pipes, scariest machines, and Fort Knox security/redundancy, and I happen to have a software platform for building cloud services to go on my infrastructure... well, why shouldn’t everybody want to build to my platform?
So how did data centers get back into all of this? Isn’t software-and-services supposed to be about doing away with the big capital investments of the past? Ah, yes, but someone has to provide the infrastructure. So now we have the fascinating situation where key IT players are getting into becoming major infrastructure providers.
What I’m imagining is all of this exploding into an “arms race.” Think about it like this: In several years time, the world’s largest software company might be just as much about cloud infrastructure “plant and equipment” as it is about software. The world’s largest storage company could be just as much about cloud “plant and equipment” as it is about storage software and hardware. That’s transformational: Let’s say 20 years from now Microsoft is all about property and buildings and equipment!
Realizing the cloud could become just as much about capital investment -- machines and cooling and pipes and towers -- as it is about anything else. Not necessarily because this is the way it has to be; if it happens this way it’ll be because it’s where the players with the money and resources take it. A big old-fashioned dust-up to see who can build more, and build it faster.
Funny how the competition for the cloud could end up being fought on the ground.
— Warren Shiau, Senior Associate, The Strategic Counsel
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