Is Power the Key to Controlling the Cloud?

While the idea of “cloud computing” is, at best, a nebulous definition, most experts and pundits agree that cloud computing is based upon Internet-scale technologies that involve large data centers such as those built and managed by companies like Google and Microsoft. But is there a dark side to the trend towards larger and larger data centers?

While “dark side” may be a bit strong, the idea that Google and Microsoft are intentionally soaking up excess power capacity in order to dominate the future of cloud computing is one that is being floated by Steve Denegri in a new article that will be published by Virtual Strategy Magazine tomorrow. As I understand it, you’ll need to sign up for a membership with Virtual Strategy to read the article.

Mr. Denegri’s theory is based on a number of contributing factors:

1. Both Microsoft and Google are building “mega-sized facilities” in areas where power is cheap.
2. State and local governments are granting multi-year tax incentives and relief from sales tax on equipment purchased for these data centers.
3. Local utility companies are agreeing to power purchase agreements (PPAs) that grant Microsoft and Google incredibly favorable power costs.
4. Both companies are working with supplies of emission-free renewable energy to help them avoid taxes based on environmental sustainability, like carbon dioxide emissions.

When you put all these factors together, Mr. Denegri theorizes, it gives Google and Microsoft the ability to dominate the future of cloud computing because they will be able to offer computing services at a cost that no one else can even come close to matching. Even the largest multinational enterprises will have a hard time gaining the same kind of economic advantages that Microsoft and Google will have already secured.

So are power and environmental sustainability the keys to controlling the future of cloud computing? Tell me what you think.