It’s impressive; lots of new, gleaming white PVC and galvanized steel tubing. The facility has the ability to shutdown its chillers in the winter and get free cooling when it’s below 45 degrees outside, thanks to modern plate and frame heat exchangers (they are bright blue, probably to set off the red water pumps that connect to the PVC chiller pipes. Red, white and blue!). Solar panels can provide about 75Kw, they have a handful of megawatts worth of generators, etc, and everything is shipshape and shiny.

On the floor (36″ raised) we saw customer cages and racks for AT&T’s co-location business, the massive switching and internet hub (four 10 GB pipes to the local backbone) and we saw the AT&T managed services infrastructure, a good dozen aisles of rack space, mostly full, with alternating hot/cold aisles with about a 20 degree difference between them.

This is where AT&T puts its virtualization, hosting, application services, managed services and yes, its Synaptic cloud services for the local area. Currently, AT&T offers Synaptic Storage as an on-demand, pay-as-you-go cloud service, and Synaptic Compute is live as a “controlled launch” with a limited number of users. Currently, AT&T Business Services says that cloud is its second heaviest investment area after mobile services.

AT&T currently runs all of its production services that are virtualized on VMware, but it plans to roll out additional hypervisor support very quickly. It is also pitching its “virtual private cloud” as an area of first interest to customers. AT&T has the ability, like Verizon, to offer truly dedicated cloud environments that do not have to be exposed to standard Internet traffic at all (it’s a telecom, it can do any dedicated circuit you want from copper POTS to fiber optic, if you pony up).

A couple of quick thoughts about what I saw: Density in the AT&T infrastructure was easily 10x that of customer colocated racks, both in use of space and the floorplan. It is clearly a beast of a different order than the individual server environments.

There was a LOT of empty space. AT&T has walled off about 70,000 square feet of raised floor for later; it has the space to double its capacity for cooling, power and switching, and it isn’t using a lot of the capacity its already got online. AT&T could treble its managed services infrastructure footprint in the current ready space and still take on co-lo and hosting customers.

That says to me that the market is ready to supply IT infrastructure, and cloud infrastructure, when the demand is there. Much ado is made over Google’s uncountable, bleeding-edge servers, and Amazon’s enormous cloud environment, or Microsoft’s data centers, but here in Watertown is the plain fact that the people who really do infrastructure are ready, and waiting, for the market. The long-term future of cloud infrastructures is probably in these facilities, and not with Google or Microsoft or Amazon.

Oh, and, Verizon has a building right next door. It’s bigger than AT&T’s.

The new Amazon VPC offering is “virtual” because the networking and the machine images are opaque to the physical infrastructure. It’s “private,” because unlike standard EC2 instances, they don’t have a public IP address. And it’s “cloud,” naturally, because you pay $0.05/hour for the service and you can quit whenever you want.

The cloud computing blogosphere was abuzz with the announcement (e.g., here, here, and here). But is Amazon VPC, as these blogs say, really revolutionary, a re-definition of private cloud, and a validation in thinking about public, private and hybrid clouds?

None of the above, I believe. While it’s fun to poke holes on an announcement such as this, especially when it’s by acknowledged cloud market leader Amazon, there has to be a street-level view of this that looks at the reality of what’s in the offering and why.

Frankly, Amazon VPC is a terrible virtual private cloud. Network control and management are rudimentary, the VPN is stone-age, users can’t expose clients to the internet and can’t assign them IP addresses. Clearly it is not ready for prime-time, and clearly it is not aimed at Amazon’s existing user base, because they’d all have to uproot their current infrastructures to use it. It is for experimenters who start with requirements that preclude public cloud.

Granted, it’s early days, and changes are in the works, but the kind of technology in Amazon VPC was hashed out with hosting, complex hosting and managed hosting years ago. Compared to what is standard for secure VPN infrastructures in these areas, the Amazon VPC and VPN are decidedly small beer.

Next, arguments that this announcement validates definitions for different types of cloud computing or somehow affect the current market as it applies to private cloud are risible. Suppliers don’t define a marketplace — they react to it.

Cloud computing is essentially a consumption model: as much as, for as long as, and whenever you like. Cloud underpinnings like virtualization, security and costing models are just a means to an end. It was only natural that when large enterprises saw this new model of self-service and low-overhead management, they would want to try it out in their own data centers.

It’s also natural that those interested in private clouds wouldn’t want to use public clouds — public cloud is antithetical to controlling your IT environment. Hosting providers quickly realized that enterprises wanted fenced off reserves to noodle around with cloud stuff, not open pasture.

Indeed, VMware has been leaping to fill that need since last year, with vSphere and vCloud and hosting partnerships with Rackspace and Terremark, among others.

So Amazon isn’t defining the conversation by any means- they’re playing catch-up. As it stands, the Amazon public cloud isn’t designed to be private — just the opposite. Amazon VPC is a radical change of pace for them, not for the cloud market. The cloud market is rapidly filling up with providers who understand the enterprise cloud market and want to service it, which has never been Amazon’s goal.

In the near future (*cough* VMworld *cough*), we’ll see products and services that make the Amazon VPC look like chopped liver, and it will be abundantly clear that Amazon is just starting to react to a segment of cloud that is already well under way and they never set out to capture, but is taking off faster than many thought possible.