One Fortune 500 company decided to take a somewhat unconventional approach to outsourcing its data center--by selling its New Jersey data center lock, stock, and barrel to the India-based outsourcer HCL for $15 million. The company, which HCL didn't name in announcing the move, contracted with HCL for infrastructure services. HCL, meanwhile, will use the data center not only to serve the company, but also to meet the growing demand HCL has for U.S.-based, outsourced IT data center services. "Our clients are looking for data centers where they are," says Shami Khorana, president of HCL America.
HCL does most of the remote monitoring needed for the data center from India. But companies don't worry much where the people working on the data center are, Khorana says. In financial services and pharmaceutical industries, in particular, it's the data they want to remain in the U.S. "Even for cloud computing, it's very important to clients where that data is residing," says Khorana.
These kind of deals may appeal to CIOs trying to cut as much IT capital expense as possible from the budget. However, a lot of stars need to align to make such a deal happen. Outsourcing that merely turn company employees into outsourced employees have a spotty record. The difference in this deal is HCL's using the data center as a base to support other clients, spreading fixed costs over multiple clients. For a CIO, finding an outsourcer that needs its data center capacity, and also is the right strategic partner to work with, is a nice match but tough to find.
Build A Data Center
For the most sophisticated users of computing power, building brand new data centers is still in style.
The CME Group, which runs some of the world's largest commodity exchanges, not only decided to build, it went big. CME runs the Chicago Mercantile Exchange, Chicago Board of Trade, and the NYMEX, in a world where trading clients measure success and failure in milliseconds. It has built a 260,000 square foot data center in the Chicago suburbs, while keeping the data center capacity it has in downtown Chicago, and New York.
Hewlett-Packard in late 2008 finished building six brand-new data centers in the U.S., part of a global consolidation effort to eliminate 70-plus smaller data centers around the world. CIO Randy Mott's strategy is to have the heavy computing done in hyper-efficient, large-scale data centers, and have employee's PCs around the world access them.
And of course, those that aspire to grand cloud computing ambitions, the likes of Google and Microsoft, have built data centers on a massive scale. Facebook is the latest to join the crowd, breaking ground on an Oregon facility.
My point in sharing these examples is to show the range of strategies CIOs are exploring in their data centers, and how there's no one simple option, from build to rent to sell to share to whatever new approaches you're cooking up.