OUR RECENT ANALYSIS of 900 end-user surveys and 25 in-depth interviews reveals that the worldwide data centre install base grew at +0.2% year on year in Q4 2014 to 4.3 million data centres and IT sites.
We found that it is only the sheer force of growing organic demand for IT resources that is propping up investment in new data centre space by traditional enterprises. Almost all the overarching market trends are working against the need for enterprises to build out more of their own data centre space.
The bright spot for facilities vendors is that cloud and MTDC providers will need to accommodate the growing demand for outsourced IT resources with their own facilities, albeit fewer and more efficient ones.
The average enterprise data centre does not look like the massive Web-scale properties that are widely covered in the news. They are far smaller, built for modest power densities, and are hitting middle age. Most premiums, centralised sites average approximately 10,100 square feet, followed by 6,200 square feet for regional and 4,500 square feet at local sites. The average age of facility is between 8-10 years old, and typical power densities are modest, ranging from 5-7kW.
Many of these sites were built during the heyday of 2004-2007 where massive numbers of new construction and retrofit projects were launched to deal with what everyone assumed would be a crisis in data centre supply as server and storage demand peaked. The economic downturn of 2008 combined with server virtualisation and site consolidation projects has led to a modest data centre portfolio that is tempered by growth in increasingly robust off-premises options such as colocation and cloud.
There is a massive installed base of premium centralised, regional and local data centres of various sizes that have required a significant investment by enterprise organisations. On average, enterprises t own approximately seven data centres along with dozens of server rooms and closets. Many are currently building or plan to build more data centres for projects such as disaster recovery and ongoing consolidation projects. However, due to consolidation, they expect their total data centre footprint to decrease over the next two years to an average of six sites. Their expectation is that the number of local and regional sites will decline as they maintain their already-modest premium centralised data centre portfolio.
Enterprise data centre project priorities point to efficiency and the desire to continually better utilize existing infrastructure and facilities. This is realistically the job of any good IT manager. But the job of a good facilities manager is to ensure uptime and recoverability. As IT assets have become centralised in fewer sites, there is increased emphasis on protection with modernised data centre infrastructure equipment. More than one-quarter of respondents said upgrading or retrofitting their existing facility is a high-priority project, with a further 23% upgrading power and cooling equipment.
There is a real desire for more advanced data recovery capabilities for enterprises today. Many are now realising the need to manage the risk of having all their eggs in one basket; if the data centre is down, the business is down. Eighteen percent (18%) of those who plan to build a new data centre in the next two years expect to do so to support a data recovery project. Conversations with senior IT professionals point to active-active architectures with synchronous replication.
Enterprises that do not own their own premium, regional or local data centres (but that may have server closets or rooms) say they prefer to use service providers such as colocation, hosting and public cloud suppliers. For this group, as their IT needs expand, it is unlikely that they will be building their own data centres, with only 8% considering it likely in the next two years. When it comes to selecting their hosting or public cloud providers, Amazon is the most widely named provider, followed closely by Microsoft, and then Google and Rackspace. For colocation providers the list is much more fragmented, with AT&T most frequently mentioned, followed closely by SunGard, CenturyLink and Equinix.
Just under one-third of non-data centre owners previously operated their own facilities that were closed for a number of reasons, including to save on capex and to ‘get out of the data centre business.’ As an indicator for net new enterprise data centre demand, it does not appear that those who either have never owned a site, or recently closed their facilities, will be pouring concrete soon.
Overall, data centre facilities and IT infrastructure budgets are flat to increasing. For enterprises that are increasing spending, data centre projects are focused on procuring equipment for modernising and upgrading their data centre as well as for data recovery projects. For those that are decreasing spending, efficiency and consolidation remain the priorities.
The enterprise data centre market is going through a significant transition. But organisations are dealing with these changes on their own time and within their own best interests. Cloud and third-party providers are rapidly maturing and doing their best to convince enterprise organisations to trust them with their infrastructure and data needs. But the reality is most enterprises have significant existing investments in the data centre space that they are not (for the most part) growing out of in the near future. As organisations evaluate what is best for them from a security, performance, cost and regulatory point of view, these facilities will continue to be the workhorse for their IT. While the enterprise data centre market is by no means booming, there are significant benefits to be derived from modernising and protecting these centralised facilities while organisations plan for their next phase of IT operations.
Data centre disruption:
More options than ever
IT organisations now have the opportunity to choose from a huge number of new, potentially disruptive technologies whether through on-premises private cloud, colocation, hosting or public cloud resources. One of the more difficult questions to answer is at what rate will these new resources be adopted? Will the majority of organisations move to public cloud over the next 10 years? 20 years? Never? What are the indicators or triggers for mass adoption of off-premises capabilities? An often-overlooked method when trying to answer this multibillion-dollar question is to understand what corporations intend to do with their owner-operated data centre footprint. A marked decline in the investment for enterprise data centres and equipment can signal a step function shift to third-party providers. Additionally, if a large representation of enterprises indicate that they will reinvest in their own data centres with 10-plus-year lifespans, will they be likely to divest of that investment so soon?
Understanding the profile of today’s corporate data centre footprint is critical to predicting the future of IT. Metrics such as age, square footage, power density and location are indicators that can help predict future decision-making.
Profiling today’s data centre -
Hint: most are not measured in football fields
The average facilities portfolio for data centre-owning organisations is two premium centralised data centres, two regional data centres, and three local data centres. Most (77%) cite their premium centralised facilities as their primary facility. By definition, the premium centralised data centre is the most reliable and redundant, housing IT systems that service the majority of the enterprises IT users. These data centres are supplemented by dozens of server rooms and closets to sup- port local and branch offices. When asked to consider how many of these data centre sites organisations expect to have in two years’ time, the response was resoundingly a lower number. Much of the expectation focused around a decline in the number of server rooms and local data centres, while maintaining the number of premium centralised sites under management. This is no surprise, considering that 33% of respondents say they constructed their primary facility for data- center consolidation efforts.
Conversations with these data centre operators indicate that many of them have a significant amount of headroom in their primary facilities. And reported server counts (see chart) suggest that many enterprise data centre owners still have room for growth. Ongoing annual consolidation has meant that their data centres of 10 years ago, built for massive scale, are now overprovisioned, with additional space and power capacity. This allows for further centralisation without necessarily requiring new construction investments. “We are looking at consolidation of all the data centres basically from this 20-plus [data centres] model to two, and in-sourcing the disaster recovery, having it basically between our main two data centres. So that’s our big project, what we are looking [at] probably next year.”
Size doesn’t matter in the way it used to. With the advent of virtualisation, it is possible for thousands of virtual servers to be deployed in a single rack. At premium centralised facilities, the average site is typically 10,100 square feet; only 17% of the sample has primary sites with more than 25,000 square feet. For regional and local sites, the average is much smaller, at 6,200 and 4,400 square feet, respectively.
This is an important level set for an industry often focused on mega-size data centres from the likes of Google and Facebook that can be in the hundreds of thousands of square feet. That is simply not the reality for most enterprises today, nor is it a requirement. What matters is capability and agility, as the speed of innovation increases and virtual server deployments are automated and orchestrated based on changing business demands.
Data centre and facilities providers should focus their efforts toward helping enterprises modernise and retrofit their existing facilities to support increasingly dense IT equipment. Disaster recovery offerings should also be positioned to protect those centralised investments. New data centre builds may come unexpectedly from market trends such as mobility enablement and Internet of Things that require compute closer to the end user, but a new wave of immediate data centre construction is not on the horizon.
Vendors that can develop products and strategies to help their customers ‘right-size’ their environment, provide enterprise-class DR solutions and act as a trusted adviser during this onslaught of new IT solutions are best positioned to win.
