While utilities tend to be a conservative lot – particularly how they ensure reliability and supplies – our experience in the Microsoft Worldwide Utilities Group is that they are changing rapidly as they search for technologies that help with the environment, improve operational efficiencies and enable new business models.

For instance, when we talk to Power & Utility company executives about our vision for Cloud computing and Software Plus Services we see many of their eyes light up.

Utilities such as AEP are using Cloud computing to enhance their ability for emissions monitoring and reporting (see previous blog). When utilities acquire remote assets they view Cloud computing online services to quicken the deployment and lower the costs of providing corporate infrastructure to their new holdings. A good example is where a utility may acquire an energy retailer in a competitive market. In this scenario the retailer may have just the basic IT infrastructure to support the retailing activities and very often the mission critical applications and servers are setup in an office environment with little or no disaster recovery plans in place. One would think the utility would just extend the corporate IT environment to the energy retailer, right? But not so fast as the cost of deploying and maintaining this environment collapses the profit margin of the retailer making it a liability rather than a revenue generating asset. Solution: Online services that can be deployed quickly and at a much lower cost than the utilities corporate IT infrastructure.

By using Cloud computing online services utilities can put themselves in a position where they can not only scale up but also quickly scale down as they adjust their business models to economic conditions and business opportunities. And finally, we see great interest in the future where many of the utility functions are services in the Cloud allowing a utility to reduce their costs to the business and allow their highly skilled workforce to spend more timing working on the business rather than in the business. This is part of our vision for the integrated Utility of the future.

But, I know what many of you are thinking: it’s OK to have web pages and search engines in the Cloud but when it comes to mission critical business operations with service level agreements and service level guarantees, how can the infrastructure be built and who is building it to meet these demands? While we had been running large scale Internet services since 1995, this development led us to an entirely new level.  Additionally, our recently announced Cloud services platform (Azure) spans across both Internet and Enterprise businesses. Having been a CIO, I know that these are two very different worlds in operational models and challenges. It also meant that, to achieve the same level of reliability and performance required our infrastructure was going to have to scale globally and in a significant way.

To answer this I wanted to share some exciting news from our Global Foundation Services team, which manages Microsoft’s global infrastructure and its network of data centers. We are publicly sharing our vision for “Generation 4” modular data centers, a significant step forward that we anticipate will reshape how the industry approaches the design, build and management of data centers.

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“Gen 4” modular data centers

The concept behind the modular data center builds on the learning’s and innovations garnered from our research and data centers like the Chicago facility, which was designed to house hundreds of shipping containers packed with up to 2500 servers each. From our experience in designing Chicago and exploring the benefits modularity can provide, we have developed our vision for the future. Our “Gen 4” modular data centers will take the flexibility of containerized servers and apply it across the entire facility, which will be composed of modular “building blocks” of prefabricated mechanical, electrical and security components, etc. in addition to containerized servers. These facilities can be built incrementally as capacity grows and deployed in only 3-6 months, reducing capital costs and construction wastes, packaging and energy, etc. Modular data centers will enable smart growth and efficiency that is scalable and sustainable, ensuring that our global footprint is only as big as capacity demands that it be.

For full background on our modular data center vision, please visit the blog of Mike Manos, general manager for data center services as well as this video posted at Soapbox.

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We hope you can spend time exploring our vision for Cloud computing and software plus services. It’s an incredible journey of change and innovation! – Jon Arnold