This has been dubbed the year of the cloud, and that represents a complete reengineering of the data center. SiliconANGLE founder and Editor in Chief John Furrier is leaving it to the alpha geeks to drive the innovation required to rethink the data center, noting a cultural shift in Silicon Valley. In the middle of it all, Furrier and his co-host Dave Vellante are broadcasting live from theCUBE at the Open Compute Project Summit in California today, sharing their expectations for the data center of the future.

Most notable is how these changes are impacting the enterprise, shifting away from proprietary “B.S.” and embracing open standards that innovate. How else can the enterprise achieve economy of scale? These are the tough questions and even tougher transitions we explore on theCUBE during today’s event.

The new home brew club

There’s a new paradigm in the valley, focused on hardware excellence. It’s what Furrier calls the new, modern home brew computer club, but for data centers and not PCs. As Furrier sees it, software-defined innovation is the future.

Vellante likens today’s transition to the previous decade’s downsizing days, where the mainframe took a turn for the worse. “Apps that should be in the cloud are going to the cloud,” Vellante points out. “Some harder to move than others. My prediction – more workloads will reside in the cloud than on premise.”

The growing enthusiasm around the reengineered data center is reflected in the growing number of attendees to the OCPSummit. Even Furrier was shocked to see how many people came out to the event. “You see the revolution happening,” he says. “You see the hardware geeks here. There’s hardware guys and there’s software guys. What you have here is the confluence of software engineering happening here.”

Leave it to the alpha geeks

Furrier then goes on to name some of these industry-leading alpha geeks, including Marc Andreesen. “They’re tinkerers, they’re software engineers. This is how the Mac came about and this is what’s happening in the data center.”

Such innovation could be a bad omen for proprietary data center providers, as Vellante notes. The converged infrastructure market is $400 billion strong, and this is the target market that’s currently being democratized through reengineered data centers and open source standards. It’s turning traditional IT thinking on its head.

“I’m very surprised at the number of people here, because we’re talking about underlying hardware,” Vellante goes on, highlighting the key points from a panel he led at the Summit. One panel member, Tim Lyons, an Executive Director at Merck, is focused on new applications like analytics, while Cole Crawford of the Open Compute Foundation is excited about crowdsourcing through initiatives like OCP.

• A cultural shift in the Valley

While excitement bubbles in Silicon Valley, it’s driving a cultural shift in the major metropolis of San Francisco. “There’s an inflection point, when you put politics aside, of people reengineering the future,” Furrier says.

Amazon is a leader in this space, Furrier goes on, demonstrated in their own cloud architecture and mimicked in their product offerings through AWS. So where is the market opportunity for others looking to disrupt traditional IT?

There’s two things to look at, according to Vellante. “Conventional wisdom says initiatives like OCP will eat into that market, but that’s flawed thinking. Proprietary infrastructure is a barrier to growth. We’ve seen this for decades. As the market drops, there’s new innovation.”

Vellante continues, making a second prediction: “A Renaissance in IT infrastructure. And the balance will shift up the stack to software, though there’s still lots of money to be made in infrastructure.”

Advice for CIOs in the reengineered data center

It’s at this point theCUBE hosts introduce Wikibon CTO David Floyer to join the discussion, bringing an analyst perspective. Furrier begins with the question of whether or not we’ll see hyperscale trends in the enterprise.

“I see a number of trends from these past two years,” Floyer starts. “One is towards cloud processing and outsourcing. There’s the convergence trend of making things more cost effective because you can create single manageable entities (SMEs). By pulling together hardware, software and applications into SMEs, you manage the cost. Every time you add on an SME you approximately double the cost of management.”

To achieve economy of scale, this cost must be managed. Floyer provides the solution:

“You’ve got to have a single SME between software and hardware,” he shares. “By having those standards, you can then go on up the stack and add on middleware, databases and applications to reach economies of scale by having single SMEs as high up the stack as you can. This drives innovation in multiple ways.”

To drive the point home, Vellante jumps in with the real-world scenario provided by Merck during his panel:

“Our interpretation of what Merck was saying was, don’t worry about ripping and replacing. That will take care of itself. Focus on new cloud infrastructure.”

Floyer adds his own bit of advice for CIOs, saying they need to step up their game. “Building your own data center is wasted money. Adding to your footprint is wasting money,” he warns. “Move it out to mega datacenters. You want efficient running of that, and you want your data to be close to the cloud. Major cloud providers are now in the business of mega datacenters. So expect a huge increase of external data from social media and the Internet of Things that you want to explore and exploit to drive innovation and new ways of marketing.

“I think the excitement is that, going away from lots of mini SMEs of compute, storage and network, these mini thiefdoms that exist within an organization, the industry has to learn how to come together and make it win-win,” Floyer concludes. “How to be a part of an open stack — part of open standards and contribute to them positively and add value to the stack as a whole. By contributing in that way you’re going to increase the rate of growth the importance of IT, and that’s such a different way of doing it. There will be a need for new leadership of taking things on in this way.”