Washington Chooses Data Center Over The Cloud

The state of Washington is investing $180 million to build a new data center, and not everyone is thrilled about it. Opponents wonder if cloud computing wouldn't be a cheaper alternative. Ironically, Washington is home to two of the biggest cloud service providers, Amazon.com and Microsoft.As reported by The Olympian, a bond sale and groundbreaking for the new facility, which will also serve as the headquarters for the state's Information Services division, is imminent. Construction equipment is due to arrive on the site in Olympia within a few days.

Two state representatives, Reuven Carlyle and Hans Dunshee, tried to put a halt to the project. In a letter to Gov. Chris Gregoire, they pointed to data centers operated by Google, Microsoft, and others -- a.k.a. cloud computing centers -- as potentially cheaper alternatives. For a state that spends upwards of $1 billion annually on IT (according to Carlyle), lawmakers and tax payers can't be blamed for balking.

Other government agencies and businesses will increasingly face the same predicament: Do they lay out millions of dollars to build new data centers in support of growing IT requirements or opt for cloud computing as a faster, better, cheaper approach. In June, the state of Massachusetts, in partnership with Cisco and EMC, announced plans to build a $100 million data center for research and green computing. As I said at the time, it's hard to fathom why they could invest so much in a brick-and-mortar facility with cloud computing on the rise. (See "Cloud Computing Vs. $100 Million Data Center.")

In weighing their options, business people, IT managers, and government technologists will have to test the commonly held assumption that cloud computing is cheaper. McKinsey & Co. did so and came to the controversial conclusion that cloud computing is twice as expensive as do-it-yourself data centers for wholesale data center operations.

Is Washington's decision to plow ahead, literally, with a new data center a good one? Without knowing more about the exact requirements, I won't pretend to know the answer. But it's certainly a missed opportunity. Washington's IT leaders and lawmakers might have collaborated with leading technology companies in their own state to demonstrate the viability of cloud computing. Instead, the bull dozers will be rolling as yet another capital-improvement project gets underway.