GE has big plans to close most of its data centers and move to the public cloud. When I was talking about this story idea last week with my editor, she was surprised by the idea that GE, an industrial giant that makes appliances and ginormous things like jet engines, railroad locomotives and wind turbines would be progressive enough to make a major move to the cloud like this — but in an interview with InfoWorld recently, GE COO of IT Chris Drumgoole said GE was in fact making a big move to the public cloud.
This is not a company afraid to make moves. Although the extent to which they will embrace the cloud is still very much subject to internal debate, the fact is the plan calls for the company to eventually close 90 percent of its own data centers. It sees computing as a utility and it wants to get out of the business of running data centers and move it all to the public cloud.
That's right, we're talking the public cloud, not the private cloud set up in their own data centers. It's important to note, however, that even though they are using public cloud resources, Drumgoole told InfoWorld that they will remain single tenant. In other words, they won't be on the public cloud with unwashed masses in a multi-tenant environment.
In spite of this, it's a bold move for a company like GE to make, but the fact is even though you might see GE as a staid vestige of the industrial age, it's actually a company that is moving forward and pushing a 21st century technology agenda. GE signed a deal with cloud vendor Box in May for 300,000 seats worldwide in the largest deal for Box in its history. GE is also making a big bet around the Internet of Things, hoping to create an entire platform on top of which industrial giants with oil platforms and wind turbine farms can build intelligent sensor-driven applications.
It's difficult to say if this is a trend that other large companies will follow, but it's entirely possible. Certainly most companies born today are unlikely to build their own data centers and as larger companies look to upgrade their enterprise software and hardware, they may very well decide to move to the cloud because like GE they see it as a utility like electricity, not something they should necessarily be focused on as a company.
When I first heard about cloud computing years ago, someone explained it this way: Every company doesn't own its own power plant to generate electricity and every company doesn't need to run its own data center. Moving to the cloud is not just an economic decision though. It has other more concrete business advantages.
It enables companies to focus on the core business without worrying about servers and upgrades and hard drive failures and everything else involved in running, managing and maintaining a data center. The company doesn't have to keep an eye on the next hardware upgrade cycle because the cloud vendor will take care of that for them and they have flexibility around their compute requirements because they can buy as much or as little as they need and pay based on what they use. All of this gives companies much greater flexibility around their computing needs because they aren't locked into older hardware and they aren't limited by resource requirements.
GE is progressive enough to recognize this and it's a big step when a company the size of GE goes on record as committing to cloud infrastructure to this extent. The question remains if other big companies will follow.