Lackluster cloud demand kills a data center

Harris Corp. shuts down its cloud hosting operation because customers still want to control mission-critical data.

An interesting bit of news hit the wires Monday – Harris Corp. announced it was closing its cloud hosting operation and selling the data center – and quite a few folks covered the story. IT World’s sister publication Network World (and many others) reported the move as a sign that companies still don’t’ trust the cloud for their mission-critical data.

It wasn’t just the pundits saying that. In the release announcing its plans to discontinue its Cyber Integrated Solutions operation, which provided remote cloud hosting, and sell its related data center facility in Harrisonburg, Va., Harris said it had determined that while there is demand for cyber security and cloud-enabled solutions, its government and commercial customers currently prefer hosting mission-critical information on their own premises rather than remotely.

Harris only opened the 100,000 square-foot data center in May 2011, which supported a variety of industry and government standards designed to assure customers of the facility’s security and trustworthiness. Among the supported standards: NIST 800-53 High, ISO 27001, SAS 70 and compliance and automation frameworks including S-CAP, HIPAA, PCI, and Sarbanes- Oxley. In addition, the facility was awarded Tier 3 certification for high availability by the Uptime Institute and a LEED Silver certification for energy and environmental efficiency.

Though the data center is closing, Harris said in its statement that it will continue to provide customers with advanced cyber security and cloud-enabled software applications and solutions as a service.

"There is a large and growing market for cyber security and cloud-enabled solutions, and Harris is committed to continuing to be a significant player in this area," William M. Brown, Harris president and CEO, said in the prepared statement. "These actions allow us to refocus our capital and efforts on the secure, cost-effective communications and IT solutions that our customers are demanding."

The company expects to incur an after-tax charge of $70 million to $80 million during fiscal 2012 as a result of these actions. It will be interesting to see whether other, similar operations shut down or cut back, due to limited demand.

Could it be that reality is finally catching up to the hype, or is this simply a blip in what is sure to be a long road to full-scale cloud utilization? I’d love to hear your thoughts. Weigh in in our comments section.

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