Market Update: Polycom Lands HP Videoconferencing Business

Ann All

Increasing interest in cloud computing and software-as-a-service is leading more companies to consider outsourcing IT functions, including data management. IT Business Edge blogger Loraine Lawson last month wrote about a mid-sized Louisiana company that outsourced fully half of its IT in this way. Its CIO couldn't say enough good things about the initiative. Integration was easier than expected and offloading operational activities to outside providers gives him more time to focus on strategic issues.

 

The coming growth in this kind of business is inspiring Google, Microsoft and others well-positioned to cash in on the cloud business to build huge data centers. Especially attractive are remote and chilly areas, where electricity generally is inexpensive and less of it is required for cooling, which explains Microsoft's construction of a 10,000-server center in Siberia.

 

Some sites hope the centers will spur a wave of new economic development, reports The Los Angeles Times. Officials in Quincy, Wash., specifically set out to attract the centers by paving roads, installing cable and making other infrastructure improvements. It worked. Microsoft, Yahoo and Intuit all built data centers in the town of almost 6,000 residents, which has a median income level far below the rest of the state.

 

Though an area real-estate developer optimistically predicts the centers will boost both population and earnings in Quincy, others aren't so sure. Says the executive director of the Quincy Valley Chamber of Commerce:

So far, we're not really seeing the growth we expected.

Monthly tax revenues rose from $250,000 to $1 million and ground has been broken on a new shopping complex. But there have been few buyers in a new subdivision of pricey homes and rumors of a Starbucks and Blockbuster remain groundless. The article points out that data centers employ dozens of people, not hundreds. Many are blue-collar positions such as electricians and plumbers. Economic aspirations are becoming more realistic, says the city administrator:

There was a lot of excitement. You could say things have leveled off. What we hope these companies will do is diversify the economy, which we sorely needed.

A recent article in Harper's Magazine takes Google to task for its new data center in The Dalles, Ore. It's an "energy glutton" expected to use about 103 megawatts of electricity, or enough to power 82,000 homes, notes the article. Google imposed many conditions, including a hefty tax exemption, guarantees of cheap energy and a new fiber-optic ring paid for by The Dalles.


 

Companies like Microsoft and Google are looking to areas like Siberia and Lithuania, where Google hopes to locate a data center, because of their lack of environmental regulations. Society will ultimately pay a heavy environmental price for these monster data centers being established to accommodate the growing demand for digital data, contends the article. Its overheated conclusion:

As the functions long performed by personal computers come to be executed at these far-flung data centers, the technology has rapturously rebranded the Internet as "the cloud." The metaphor is apt, both for our foggy notions of a green Web and for the storm that awaits a culture that squanders its resources.

There's no question data centers gobble a lot of power. But it's worth noting that vendors are experimenting with lots of alternate methods, including wind and water. And Microsoft, among others, is building centers that incorporate at least some of these conservation concepts

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