What does the GM move to bring its IT in house and start building data centers tell us about cloud hype?

Published on 15th January 2013 by Ambrose McNevin

To read the cloud hype one would think that everywhere one looks enterprises are closing down their data centers and buying everything as a service from cloud, infrastructure and software providers. 
Why saddle yourself with the cost and complexity of owning and operating a data center when there are experts who specialise in this and who can provide it for you at a known cost over a fixed period. You can plan better and dedicate yourself to doing what you do best - that is growing your business, expanding into new markets and developing new products. All very convincing.

But car maker GM is doing exactly the opposite. In October we reported that GM is hiring 3,000 HP staff who were  working on its outsourced services contract and bringing them in-house. And just last week on January 10th we reported GM's plans to hire 1,000 IT specialists for its innovation centers including a new data center in Atlanta

While we quoted GM CIO Randy Mott, the GM story as told by Dow Jones reported chief executive Dan Akerson as saying: “You just assumed that a company of our stature, our size, our complexity, our global reach, that we had to have a 21st century IT infrastructure,” Mr. Akerson said. “We didn’t. We are attacking that on a scale that is prodigious. We are making great progress but it is going to take three or so years to get it done minimum. It took us 30 years to miss the train. It is going to take us three to four years to catch up."

There are doubtless many reasons why GM's outsourcing strategy and its contract with EDS (subsequently bought by HP) failed to provide the car maker with what it wanted.  
And looking at the application developers and systems managers it intends to employ the manufacturer will doubtless deploy many and varied hybrid solutions of a cloud and non-cloud nature.
But what this points to is that outsourcing to the cloud, whether it is discrete or wholesale is not some panacea to your workload concerns.
In the old days large scale long term outsourcing contracts were popular in uncertain economic times and tight money supply. Why tie up your capital when you can outsource to a third party who will manage the IT headache for you? Sound familiar? However what many forgot was that you can only outsource once and the savings don't accrue, the costs do.
In today's uncertain times cloud services look very appealing but what GM is telling us is that nothing is free and the price of savings is control. 

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Ambrose McNevin is the editor of DatacenterDynamics Focus

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