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Raising the Stakes for Data Centers at the 451 Cloud Computing Transformational Summit

Last weeks conference – 451 Cloud Computing Transformational Summit mixed business discussions and technology developments that are guiding the direction for data centers and “digital infrastructure” Highlighted where complex enterprise environments that require hosting providers and cloud platforms become be far more attuned not only to economic models, but to compliance and privacy needs, migration strategies, quality assurance and availability.

Data Center industry growth, while not at historic highs, is better than almost any other industry right now. So investments in the sector are strong and low cost capital plentiful. But it is not speculative growth like the Dot-Com days. The industry is matching capacity with customer needs. There is far less chance of seeing another internet “bubble” that climaxed March of 2000, and left years worth of overbuilt data center capacity.

In the managed data center and hosting services business, the pot is huge, and multiple players are competing. However, no single strategy has emerged as the “nuts” (unbeatable hand). Consequently, there are bets all over the table – multi-tenant collocation data centers, managed hosters or public cloud providers? While many are predicting shifts, all are viable and growing for different reasons.

• Public cloud for on demand self service email, Web hosting, and others. As well as an attractive option for backup/restore/archive.

• Wholesale collocation for readily available IT room space and when you want to redistribute your cash flow to operating and minimize real estate inventments.

• Managed hosters when you need a high degree of personal service.

Personal service is still a major concern. Public cloud computing does not usually have a staffed 1-800 number. Managed hosting facilities do, and customers pay a high premium.

There was also a buzz about consolidation being escalated due to pending tax increases in the US. This is driving urgency in many operators to sell before it becomes dilutive to valuations.

On the technology side, API’s application programming interface are still being standardized. Plus software-defined networking (SDN) tools like OpenFlow offer promise to pull the cork from the network bottleneck and let new volumes of data flow freely.

To sum it all up, data centers are one of the hot industries and its tempting to get excited about it. The future looks promising and many players in the field have stakes in the game, but the field is heading to the final table.

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