Monday, 7 June 2010

Cloud Computing in Moscow: From Russia With Love

Russia is coming out of a severe financial dislocation; its economy shrank 7.9 percent in 2009.

It appears to be on a growth track today. Furthermore, its penetration of IT use in the economy is far lower than what we see in the U.S. and western Europe — it can be characterized as an emerging economy, though, if my observations are anything to go by, one with tremendous vitality and ambition.

What that means to the future of data centers is quite intriguing. Unlike the U.S., for example, a much lower percentage of companies in Russia have significant existing data center infrastructure. For many companies, the choice of computing infrastructure presents an interesting greenfield opportunity. The question, therefore, is what path to pursue as companies build out their infrastructure of the future.

A complicating factor is that Russia suffers the challenges of developing economies: reliable electricity and Internet connectivity — although I must say that at the Radisson I am staying at, the (free!) Wi-Fi delivers 13 Mbs down and 9 (!) Mbs up, well beyond what I've ever gotten at any U.S. hotel, at any price. Nevertheless, the power and connectivity challenges make running data centers difficult.

Those challenges argue for keeping a company's data center as close as practicable, to reduce the potential for service interruption. On the other hand, the cost of building a data center has skyrocketed over the past few years, because the sophistication and density of computing infrastructures has increased significantly.

These factors make it difficult to know which alternative makes the most sense:
Build an on-premise data center. This provides less potential for service interruption due to connectivity problems, and, should power go out in some other location in the area, enable the entity to continue compute activities. It does, however, commit a company residing in a less-developed economy to an expensive capital investment and an ongoing capital expenditure regime, as equipment wears out or becomes obsolete and requires replacement.

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