Cloud Computing in Moscow: From Russia With Love

I had the privilege of keynoting a data center conference in Moscow this week, speaking on the topic of what cloud computing means to the data center of the future. This is the largest data center conference in Russia, and attracts a mix of internal data center facilities executives as well as hosting providers. The conference was extremely well-attended, with record numbers of people registering.

[For timely cloud computing news and expert analysis, see CIO.com's Cloud Computing Drilldown section. ]

As background, 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.

To continue reading, register here to become an Insider. You'll get free access to premium content from CIO, Computerworld, CSO, InfoWorld, and Network World. See more Insider content or sign in.

I had the privilege of keynoting a data center conference in Moscow this week, speaking on the topic of what cloud computing means to the data center of the future. This is the largest data center conference in Russia, and attracts a mix of internal data center facilities executives as well as hosting providers. The conference was extremely well-attended, with record numbers of people registering.

[For timely cloud computing news and expert analysis, see CIO.com's Cloud Computing Drilldown section. ]

As background, 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.

Slideshow: Secrets of Successful Data Centers

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.

Leverage a hosting provider. This avoids making a commitment to building and maintaining a compute infrastructure, while still allowing a company to leverage a state-of-the-art data center environment. Moreover, it allows a company to avoid hiring at least a portion of the operations staff required by the previous option. It also offloads a capital expense onto another party, freeing up capital for investment in other, perhaps more business-focused, areas. This last item should not be minimized, given the common perspective I heard voiced that Russia provides tremendous business opportunities right now, and those that can jump into the lead may cement a permanent advantage. The ability to direct capital toward production capacity, store building, working capital, or even hiring additional customer-facing personnel is no small thing in such an environment.