Facebook earlier this year decided to build its own data center, and now Twitter is planning to break ground in Utah. With these moves, two pillars of Web 2.0 innovation send a crisp message that owning and running IT infrastructure can deliver a competitive advantage.
Twitter's decision is more than a simple rent-versus-buy financial calculation. This lies at the heart of the company's brand and growth ambitions. Twitter has become far too big and vital to give off a "such is life with startups" attitude toward outages and poor performance. Jean-Paul Cozzatti emphasizes control, reliability, and flexibility in announcing the decision:
… Twitter will have full control over network and systems configuration, with a much larger footprint in a building designed specifically around our unique power and cooling needs. Twitter will be able to define and manage to a finer grained SLA on the service as we are managing and monitoring at all layers. The data center will house a mixed-vendor environment for servers running open source OS and applications. Importantly, having our own data center will give us the flexibility to more quickly make adjustments as our infrastructure needs change.
Compare Twitter's experience to what eBay went through during its growth explosion more than a decade ago. By chance this morning, I read an interview from 10 years ago with eBay founder Pierre Omidyar (via Business Insider's Tip of the Day) that speaks to eBay's realization that its future hinged on having extraordinarily good IT infrastructure. Said Omidyar:
"We had some fairly public failures in the middle of '99, and where our systems went down for 22 hours and then went down for eight hours after that. And we had a very large community then. Not as large as today obviously, but still very large, front page news. We had CNN satellite trucks in the parking lot. I mean, it was big, big. 'The world is watching, this company is gone. It's going away.' And I think failure of that magnitude, or a challenge of that magnitude, is really important and I'm glad that we faced it so early in our evolution, because Meg, who is the CEO -- I brought on Meg in March of '98 -- she really woke up to the fact that infrastructure and technology was critical and just really built that organization out over the next--it was a six to nine month process for us to kind of get over that."
Twitter could take a different growth path than eBay, thanks to the highly evolved state of the IT outsourcing industry. It managed growth initially with cloud services including Joyent, then went to an outsourced collocation data center facility, which it will continue to use. But Twitter is arriving at the same destination as eBay, concluding that it's future hinges in part on running a world-class IT infrastructure highly tuned to its unique needs.
Are Facebook and Twitter outliers, the rare Web leviathans that can justify their own information factories? Not even close. Companies will take many tactics to their data centers, including outsourcing and infrastructure as a service cloud computing. But plenty of companies, from the Chicago Mercantile Exchange to JPMorgan Chase to Hewlett-Packard, also continue to invest in data centers as strategic assets they'll run themselves. Server virtualization is spurring the effort, letting companies cut their costs and reduce the number of physical data center buildings they need, making it more practical to keep this asset in house. Many CIOs, in fact, spent the downturn shoring up their IT infrastructures. JPMorgan Chase, for example, poured millions into upgrading its IBM mainframes.
Cloud computing is supposed to change this, making it easier for companies to push commodity computing outside its walls. And there's real interest in that. There's booming interest in cloud-based applications. But so far, when it comes to infrastructure, the greatest interest in cloud computing is in private clouds, according to our research. IT leaders are looking to harness the flexibility and scalability of cloud architecture inside a company's own data center. eBay itself will help push the development of private clouds, working hand-in-hand with Microsoft.
No doubt, CIOs will look for chances to push certain kinds of work, like testing and development, out of their data centers and into the cloud. Some will hand over every piece of operational IT they can. But many execs still see competitive advantage in running their own data centers, ones flexible and responsive enough to meet their changing needs. And that's likely to continue.
Chris Murphy is editor of InformationWeek.
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