By Todd Campbell
September 8, 2006
“We’ll have storage in the cloud.”
– Bill Gates, July 28, 2005
“There really is a need for a platform . . . out in the cloud.”
– Steve Ballmer, May 11, 2006
Microsoft is a company that has succeeded in large measure based on its willingness to pursue what Steve Ballmer likes to call “big, bold bets.” Today, no bet is bolder or more important than the company’s push into Internet services.
From the fast-growing stable of services available under the Windows Live brand to Office Live, Xbox Live, Dynamics CRM Live and beyond, Microsoft has thrown its full weight to “lead[ing] the industry through the critical paradigm shift from software to software-based Internet services,” as Ballmer wrote in an employee memo this year.
But these services’ success ultimately will depend on the “cloud,” which raises the questions: What is the cloud, and what is Microsoft doing to ensure that its cloud will meet demands of the services era?
VIDEO: http://soapbox.msn.com/video.aspx?vid=c0f6e060-81fa-4108-9071-348c20cdcceb
Cloud Makers’ Efforts Scale Up Dramatically
The Windows Live Operations team members are the cloud makers, working under the charter to deliver Microsoft’s online services by building and operating the most efficient, global, Internet-scale services platform.
Simply put, the cloud is a network of tens of thousands of servers housed in data centers scattered around the globe. Stored on these servers is the information that makes Microsoft’s Live services offerings possible: transactions, e-mail, applications, documents and much more. Today Microsoft’s cloud consists of nine data centers in five nations. Combined, they equal 12 Madison Square Gardens in size, and they consume enough electricity to light 100,000 homes.
Those numbers are a dramatic change from the recent past, says Debra Chrapaty, corporate vice president of MSN Operations. When she joined the company in 2003, Microsoft data centers had about 10,000 servers. This past July alone, the company brought 9,000 new servers online.
But that is just the start. Under current plans, in five years, Microsoft will operate up to 28 data centers and support hundreds of thousands of servers – as many as 800,000, The New York Times estimated recently. (Microsoft does not make that information public.)
“The numbers are exponential,” Chrapaty said. “The number of data centers is going to expand three times by 2011. These are very important and costly investments and we want to be very smart about where we put them.”
In a Sleepy Town, Competitive Advantage
The most apparent manifestation of the company’s expansion plans can be found in a former bean field in Quincy, Wash., a town of about 5,300 people on the Columbia River, 135 miles east of Redmond. There, on 74 acres, the company is building the first phase of a projected 1.5 million-square-foot facility that could hold 150,000 servers.
Quincy was chosen for reasons ranging from geologic stability (earthquakes are bad for data centers) to tax climate, land prices, access to fiber optic networks, and power rates. Power was particularly important. With ample hydroelectric power thanks to a pair of nearby dams, the local utility district was able to offer Microsoft an average rate of 2.8 cents per kilowatt. Nationwide, the average cost of a kilowatt of electricity ranges from 5.1 to 6 cents.
“Think about FedEx. Why are they the world leader instead of UPS?” Chrapaty posed. “It’s not because they have the fastest planes or coolest logo. It’s because they bought strategic landing fields at affordable prices that were very thoughtfully located in terms of logistics. That gave them a huge competitive advantage. We looked at our data center infrastructure in the same way: These decisions are as important as decisions about our products and features.”
Quincy marks the first time that Microsoft has built a data center from the ground up. Until now, the company has leased data centers, taking advantage of the glut available at low cost in the wake of the dotcom’s initial bust, when companies’ services failed to materialize.
“There used to be an oversupply, but now there’s a shortage,” says Chrapaty. “So we have a combined strategy of leasing and building to ensure we have the flexibility we need.”
‘Operations Has Become an Enabler’
Because it’s the first data center to be built by Microsoft, the Quincy structure will be a prototype for future additions to the company’s cloud. It also provides an opportunity to incorporate research and new ideas in chip design, server design and heat dissipation being developed both at Microsoft and by hardware partners who build servers.
“We’re planning to be at 200 watts per square foot, which is industry-leading,” says David Gauthier, lead program manager in Windows Live data center development. He oversees many of the daily construction details in Quincy.
“Most of our existing facilities are between 75 … and 100 watts per square foot. But we have an eye on 400 watts per square foot. Because servers are getting so much denser, we can build smaller buildings, cram more power in the space where we have the servers, and save money in the process.”
Equally important will be innovations in server automation that will enable the Windows Live Operations team to manage its fast-growing network of data centers with maximum efficiency and minimum human involvement. The ultimate goal is to create a “cloud” that provides a competitive advantage through superior performance and the lowest possible cost.
“Infrastructure is becoming a core differentiator for the company,” said Chrapaty. “Creating a competitive cost structure is one part of it. At the same time, operations has become an enabler of products. The coolest feature doesn’t stand up if it isn’t available 24 hours a day. You can’t build great products any more without a great infrastructure. Our ability to architect for speed, reliability and performance is part of the Windows Live platform and key to the success of our products. So we’re proud of what we do.”
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Quincy, Wash. info
Founded as a railroad camp in 1892 and incorporated in 1907, Quincy was settled by homesteading farmers lured by the promise of rich soil and cheap land. Today, Quincy’s economy centers on 200,000 acres of irrigated farmland produce potatoes, apples, wheat, alfalfa and vegetables.
Population: 5,300
Income: Median household income is $32,181; 55 percent of Quincy workers earn less than $35,000.
Jobs: 52% of local jobs are in agriculture, 18% in construction, and 18% in education and health services.
Languages: Spanish is primary language in 57% of Quincy households.
Temperature:The average summer high temperature is 84 degrees F; in winter, 40 degrees.
Utility rates: On average, less than 2 cents per kilowatt hour for industrial customers, about one-third the U.S. average.
Source: Quincy Chamber of Commerce
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