Is Google your next data center?

Cloud computing is changing the way we think of the IT department

Jonathan Snyder's five-person team at Dreambuilder Investments isn't your typical IT organization. Or is it?

The New York-based company, which buys and sells defaulted residential mortgages, uses from as its financial services platform. It backs up data using EMC's hosted MozyPro service. The company's server is hosted by RackForce Networks in Canada and its e-mail is handled by Apptix, a hosted exchange.

Granted, Dreambuilder Investments is a five-year-old company that lacks the kind of IT infrastructure that's been built up over decades by a typical Fortune 1,000 enterprise. But as Chief Technology Officer Jonathan Snyder sees it, his company's core business is mortgages, not server maintenance and disk backups.

"If it's somebody else's core business to handle an Exchange server, let them do that," says Snyder.

It's not just small to midsize businesses that are following Snyder's lead. By 2013, at least one-fifth of enterprise IT workloads will be managed in cloud computing environments, according to Mike West, an analyst at Saugatuck Technology, a boutique consulting firm. He says that big companies are increasingly handing over their IT infrastructure activities to traditional IT services firms like IBM, Hewlett-Packard and even recent market entrants such as and Boomi. The goal is to lower their costs, access enhanced functionality, sidestep skilled labor shortages and reduce their data center footprints.

Moreover, companies are recognizing that building or installing commoditized applications or IT infrastructure services that don't provide them any competitive advantage "has become a diminishing return over the past several years," says John Dutra, CTO at Sun IT, a division of Sun Microsystems, which is preparing to launch a hosted computing platform for developers called

Companies "are no longer going to buy technology artifacts, like ERP systems," predicts Thornton May, a US-based futurist. Instead, he says, "They'll commit to a service."


The benefits of cloud computing -- the ability to store files and data on a remote network using the Internet -- include lowered infrastructure costs and speed to market, and they are making hosted IT infrastructure services a lot more enticing to IT leaders. Studies have shown that it would cost some companies millions of dollars to install and set up their own virtualized server and storage environments, says West.

With hosted IT services, notes West, "you don't have to buy the hardware and software; you just subscribe. There's not a lot of capital outlay. The attraction to that is huge."

Moreover, providers of hosted services such as Google and Amazon are making pricing extremely transparent. For instance, Google Apps (which includes e-mail, word processing, spreadsheets, presentations and calendaring) is priced at US$50 per user per year, says Matthew Glotzbach, Google's director of product management for enterprise.

Amazon's Simple Storage Service is explained simply on its site and priced at 15 cents per gigabyte each month. "We've removed so much of the friction by being transparent about prices and not having to have lengthy contracts and negotiations," says Adam Selipsky, vice president of product management and developer relations at Amazon Web Services.

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about Amazon.comBIASCotyEMC CorporationGigabyteGoogleHewlett-Packard AustraliaIBM AustraliaSalesforce.comSatyam Computer ServicesSavvisSidestepSpeedStorage Networking Industry AssociationSun Microsystems

Show Comments