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Large enterprises handing off data centre builds

Digital Realty Trust found a nearly unanimous need for more data centre space among the 300 large enterprises surveyed

Demand for data centre space is on the rise. IT pros responsible for facility planning are juggling physical requirements for secure, power-abundant space with operational considerations, including the need to improve disaster recovery, deploy new applications and services, and handle increasingly large data volumes.

In its annual study of the North American data centre market, published last month, Digital Realty Trust found a nearly unanimous need for more data centre space among the 300 large enterprises surveyed. A full 92 per cent of respondents said their companies will definitely or probably expand their data centre space in 2012 — the highest percentage in the six years that Digital Realty has conducted its survey. Among those respondents with concrete plans to expand in 2012, 38 per cent expect to expand in three or more locations.

The scale of projects being planned is also increasing, reports Digital Realty, which is one of the largest providers of data-centre real estate. Roughly half of respondents (54 per cent) said their projects will exceed 15,000 square feet, and 49 per cent expect their data centre projects to be supported by at least 2 megawatts of electrical power (including 12 per cent that are planning data centre projects with 5 megawatts or more).

The growth isn’t unexpected. Even during the IT project-crippling years that followed the financial industry meltdown in 2008, data centre construction didn’t dramatically slow, according to Matt Stansberry, director of content and publications at Uptime Institute. In its most recent poll of data centre managers, Uptime Institute found that 80 per cent of respondents have built a new data centre or upgraded an existing facility within the past five years.

“You still need data centre capacity, whether or not the economy booms,” Stansberry says.

But what has changed is how data centre space is being built or acquired. In the Digital Realty survey, 78 per cent of respondents with expansion plans in the works said they intend to use a partner — such as a wholesale data centre provider or a design/build partner — for one or all of their projects.

That’s a significant shift in mindset from years past, when the largest companies tended to keep data centre development in-house. “We see a lot of people looking at [colocation providers] and third-party data centre service providers who wouldn’t have before,” Stansberry says. “These are people who traditionally have run their own data centres, but that’s shifting pretty rapidly.”

Even companies such as Google and Yahoo, which are known for building their own cutting-edge data centres, are supplementing in-house development with third-party providers including Equinix, which specializes in network-neutral data centres and interconnection services.

“They’ll come to Equinix for the network hubs when they need low latency and access to multiple networks,” says Mark Adams, chief development officer at Equinix. “We’re a critical component in many of the major content companies’ architecture and infrastructure.”

Other reasons large enterprises are considering third-party providers include the high cost of constructing a private data centre and the continuing lack of enterprise capex funds. In addition, the colocation market has matured, and enterprises are more comfortable handing over non-core, engineering-heavy construction tasks to data centre providers that specialize in that kind of work. “There weren’t that many colocation providers five years ago that could provide enterprise-class data centres for a financial organization,” Stansberry says.

Certifications by the Uptime Institute, which offers a tier system that ranks data centres according to their expected levels of uptime and availability, show evidence of the trend. In the last couple of years, certifications for colocation and third-party providers’ facilities have jumped significantly, and today account for roughly 50 per cent of the certifications Uptime conducts, according to Stansberry.

Another trend catching on is containerized data centre capacity. In the Digital Realty survey, 41 per cent of respondents reported plans to use a containerized module as part of their expansions. Uptime Institute notes a similar uptick, though not as drastic. “About 10 per cent of our market said that they have deployed modular, prefabricated data centres, and another 8 per cent said they’re planning to,” Stansberry says.

Going wholesale

The managed data centre services the enterprises are tapping “run the gamut from somebody just building a raised floor and handing you a key to the building, to something as specific as cages in a site that’s fully staffed,” Stansberry notes.

Vantage Data Centers, a wholesale data centre provider, gets its tenants involved in the construction process early on, so they can customize attributes such as size, density, rack layout, distribution and cooling in their space.

“In wholesale data centres, you end up managing your infrastructure, you bring in your racks and stacks, and we furnish and lease the actual building, optimized for your infrastructure,” says Greg Ness, chief marketing officer for Vantage. During design and construction, “there’s a significant level of alignment and coordination between the enterprise and Vantage.”

One of those tenants is Mozilla Corp., which recently decided to make the leap from multiple retail colocation providers to a wholesale data centre model. Mozilla’s plan is to consolidate its four Silicon Valley data centres (which include space in facilities owned by CoreSite, Internap and Layer 42) into a single Santa Clara, Calif., facility owned and renovated by Vantage.

The tipping point came when Mozilla realized it was consuming more than 400 kilowatts of power in its multiple data centres, recalls Matthew Zeier, director of IT operations for Mozilla.

“At some point, this model doesn’t work. We’re spending a lot of money on power. So the cost model started to change,” Zeier says. “At this level, it started to make sense to look at moving away from a retail model and into a wholesale model.”