We talk about “cloud computing.” Where is the cloud? Data centers. Amazon is the largest player in this space. Microsoft and Alphabet are now catching up. The three companies spent a combined $31.54 billion in 2016, according Wall Street Journal. Investors don’t seem to mind such huge capital expenditures, as reflected in the companies’ stock prices. The WSJ article compared tech giants’ investments in data centers to those of energy companies’ exploration costs. Fair enough. Data centers are the strategic control points in the infrastructure of the future. They will eventually turn into profit centers. Once a company decides to move its IT operations to the cloud, it is extremely difficult to switch vendors, not to mention going back to the old way of hosting everything in-house. The distinguishing factors would eventually be how efficient the infrastructure services are, and, perhaps how sustainable the data centers are.

Image credit: Wall Street Journal