Saturday, July 30, 2011

The "21st Century Bits Factory"

Growing up in Detroit, I was always fascinated by the auto factories. Beyond the fact that I had tons of friends and relatives that worked there, I used to love to go on the tours to watch the massive machinery turn out these incredible pieces of automative art. But over time, the atmosphere in the factories changed as competition from European and Asian carmakers increased. Things become more automated, resources were brought in "just in time", parts were sourced from all over the world and in some cases actually came from competitors. Terms like "lean manufacturing" and "six sigma" began to flood into the vocabulary of anyone involved in manufacturing in the 70s, 80s or 90s.

For people working in IT, a similar transition is rapidly taking place. For some people, they may view the burst of new Data Center building announcements (here, here, here, here, here, and many more) as just a new phase in IT evolution. But I actually believe it's something bigger than simply the natural trends of Moore's Law.

I've been using the phrase "21st Century Bits Factory" for about six months now because I believe this new trend toward hyper-efficient Data Center facilities and operations is a similar tipping point to what we saw in the manufacturing industry decades ago. But instead of making cars or widgets, these giants factories are creating products, commerce and business value through 1s and 0s. The businesses they support are almost entirely driven by the value of this data, so the businesses are beginning to invest in their data centers with laser focus.
On a side note, I had the opportunity to visit a number of factories in China a couple of years ago. There were two elements that seemed to be very consistent in many of the factories: 

  • The factory had been given the goal of trying to reduce their physical footprint by 30-50% every 12-18 months. Not only did this mean they needed to reduce the number of steps to create the unit, but potentially find new ways to do it in a small space. This might means new tools, different ways to store inventory, etc. The new space would be used to take on new production lines for the business. [Image if IT organizations had that mandate. What new doors could it open for the business?]

  • The factory managers were constantly pointing out unique "best practices" that the factory workers had created themselves, in response to motivating factors (usually $$ bonuses) to improve the productivity of the factory. Sometimes these resulted in better products and sometimes it reduced costs or time to completion. [Image if IT organizations were measured by those metrics, instead of primarily on uptime? Could their experience drive better products? Could their experience enable new business opportunities or business models?}

  • So what does all of this mean to the IT industry?

    1. The New CIO had better have a strong grasp on both his internal and external bit factories. If they are looking for leading practices, facilities like SuperNAP (here, here) might be a good place to start their education. This will help them decide if they want to be a renter or an owner.
    2. New standards and recommendations (here, here) will emerge that attempt to take the learnings from the largest of bit factories and attempt to bring those back into mainstream IT operations are various sizes. CIOs should educate themselves on how this new thinking could impact their Data Centers now and in the future.
    3. The common separation of costs between IT and Facilities will need to be re-evaluated. It was understandable when IT owned a few floors of a building or a bunch of closets, but when they run the entire facility it will be in everyone's best interest to drive collaboration between those groups as Cloud Computing is now measured in ROI/watt as often as it's measured in ROI/$. 
    4. CIOs should be looking to leverage the concepts within JIT, Lean and Six Sigma to potentially drive the operational efficiency that will allow IT services to be delivered at scale and at the pace of 21st century business.
    5. CIOs should be looking at ways to leverage Data Center efficiencies to drive tax breaks, energy efficiency tax credits or other forms of savings/rebates to offset other IT costs to the business.
    Not every company will have the budgets to build new Data Centers in the near term. Consolidation of resources (unified networks, virtualization, etc.) might resolve immediate space/power/cooling challenges. But over time, just as we saw in the manufacturing industry years ago, most businesses will be faced with the question of how they will evolve their 21st century bits factories, whether they are owners or renters.


    1. Auto factories should be thankful to the invention of roller conveyor. It made their work more efficient. I would not imagine manufacturing without the conveyor.

      Ryan Donovan III

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