In the wake of Microsoft's decision to remove its Windows Azure infrastructure from the state of Washington - where a change in local tax law has upped the price of building out the proverbial cloud - the company's former director of data center services has warned that Microsoft and other cloud-happy giants may soon find that the mega data center isn't all it's cracked up to be.
"[Large cloud providers] are burning through tremendous amounts of capital believing that these facilities will ultimately give them strategic advantage," reads a blog post from Mike Manos, who recently left Microsoft for data center outfit Digital Realty Trust.
"Ultimately, these advantages will be fleeting and short-lived. They will soon find themselves in a place where these facilities themselves will become a drag on their balance sheets or cause them to invest more in these aging assets."
Earlier this week, Microsoft told the world it was migrating the "USA Northwest" portion of its Windows Azure cloud out of the USA Northwest. Citing a change in the local tax laws, the company said it was closing off the region to new applications and that prior to the platform's official launch in November, all existing apps would have no choice but to move to Azure's "USA Southwest" region, hosted in San Antonio, Texas. The web-based development and hosting platform is currently in technology preview mode.
Microsoft will continue to host other online services in its Quincy, Washington data center, as the company told All About Microsoft blogger and friend of The Reg Mary Jo Foley. But with Azure set to scale up for who knows how many new customers after its official launch, Data Center Knowledge explains, Microsoft won't stomach the 7.9 per cent tax that Washington now lands on all new data center equipment.
When Microsoft first started work on its Quincy facility, it enjoyed from a manufacturer tax break, but in December 2007, the break was rescinded by the state attorney general because data centers "do not produce a product which is sold to the companies’ customers." Microsoft soon halted construction on its local data center (as did Yahoo!), and now, the company has gone so far as to move Azure out of Microsoft's home region.
This may be an effort to secure some leverage against local lawmakers, after efforts to push through tax break legislation, well, broke down. But for Mike Manos - who played no small part in setting up three of Microsoft's new data centers - the company's Azure migration shows that although Azure and similar services are painted as amorphous somethings that float in the sky, the reality is that they're built on somewhat shaky ground:
Lets pretend you own a cloud and have just sunk 100M dollars into a facility to house part of your cloud infrastructure. You spent lots of money in your site selection and up front due diligence to find the very best place to put a data center. Everything is going great, after 5 years you have a healthy population of servers in that facility, you have found a model to monetize your service, so things are going great, but then the locale where your data center lives changes the game a bit. They pass a law that states that servers engaged in the delivery of a service are a taxable entity. Suddenly that place becomes very inhospitable to your business model. You now have to worry about what that does to your business. It could be quite disastrous.
There's been a great deal of talk about constructing clouds so that applications can easily move from one to the other. But Manos argues that the infrastructure itself must be just as fluid.
"The cloud will need to be on the move, even if its a slow move," he says. "Because just as there are forces looking to regulate and control the cloud, there are also forces in play where locales are interested in attracting and cultivating the cloud. It will be a cycle that repeats itself over and over again."
What's needed, he says, is a software layer that readily shuttles infrastructure between physical facilities. And if the facilities themselves can move, all the better. Today, the most conspicuous web outfits use pod-like contraptions to build enormously permanent data centers, but Manos envisions a world where those pods do indeed move from place to place to place.
"Just as the concept of Follow the Moon has emerged for a potential energy savings strategy to move load around based on the lowest cost energy, it might someday be followed with a program similarly move information or work to more 'friendly' locales," he says. "The modularity movement of data center design will likely grow as well trying to reduce the overall exposure the cloud firms have in any given market or region."
And if this is the case, then the mega data center - the hardware, the brick, the mortar - becomes less important than the software infrastructure that moves everything to and fro. "In that evolution they will become more industrial, more commoditized, with more intelligence at the software layer to account for all these complexities," Manos continues.
"Ultimately the large cloud providers should care less and less about the data centers they live in. These will be software layer attributes to program against. Business level modifiers on code distribution. Data Centers should be immaterial components for the cloud providers. Nothing more than containers or folders in which to drop their operational code."
Google, it seems, is already working towards some sort of software layer that automatically moves compute loads between data centers. This is meant to sidestep hardware failure - in near real-time - but it isn't that far removed from what Manos envisions.
The rub is that Google has already erected nearly 40 data centers across the globe. Will it come to rue this epic investment as the political landscape changes beneath it? The Microsoft-Washington stand-off, Manos says, is just the beginning.
"You are essentially seeing the beginning of a cat and mouse game that will last for some time on a global basis. States and governments are currently using their blunt, imprecise instruments of rule (regulations and taxes) to try and regulate something they do not yet understand but know they need to play apart of. Its no secret that technology is advancing faster than our society can gauge its overall impact or its potential effects and the cloud is no different." ®