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Summary:

Data centers are like a virtual version of the traditional shipping industry, says Joyent founder and chief technology officer Jason Hoffman — they are becoming commoditized, but at the same time they are also disrupting digital businesses just as shipping disrupted traditional manufacturing.

The data-center business may seem like something brand new, but in many ways it is really just a virtual version of the traditional container-shipping business, Joyent founder and chief technology officer Jason Hoffman told attendees at GigaOM’s Structure Europe conference on Tuesday morning in Amsterdam. And just as the development of modern container ships and shipping technology disrupted the manufacturing business, data centers and cloud economics are doing the same to digital businesses.

The information bits that make up digital traffic may be virtual, but they live in containers called blocks, words and registers, Hoffman said, and it is rapidly becoming a commoditized industy — and so “we have a very similar model to what we’re doing in any transportation industry, where you put physical goods into containers and put them on container ships.”

The Joyent CTO added that traditional port cities like San Francisco and New York are also big data-center locations as well, just as the early building blocks of the internet were built on traditional shipping routes like the Silk Road. As a result, “the service-provider business is ultimately a digital shipping and logistics business.”

In a similar way, Hoffman said, companies need to think about data centers the same way they think about factories — in other words, if you use one a lot then you probably want to build and own it, but if you don’t need to control it then you might as well outsource that and rent space in one.

Check out the rest of our Structure Europe 2012 live coverage here, and a video recording of the session follows below.

  1. Commoditization needed virtualization to become the new factory. The two in combination are a significant step forward for technology but I suspect many don’t see it yet.

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