How do we scale datacenters? Should we build a few mammoth million machine datacenters or many smaller micro datacenters? Intuitively we usually go with a bigger is better economies of scale type argument, but it may not be so. What works for Walmart may not work for White Box World. Mega datacenters may actually exhibit diseconomies of scale. It may be better to run applications over many distributed micro datacenters instead of one large one. This paper by Ken Church, Albert Greenberg, and James Hamilton, all from Microsoft, takes a look at the different issues and concludes:
Putting it all together, the micro model offers a design point with attractive performance, reliability, scale and cost. Given how much the industry is currently investing in the mega model, the industry would do well to consider the micro alternative.