Posted by: Greg Ness | December 28, 2011

The Cloud and the Great Data Center Race

In the same way that the rise of the Internet led to the enterprise web (web-enabled enterprise applications) the public and private cloud is driving IT to new modes of operation, most of which demand more agility, more capacity and an even keener  focus on operating and capital expenses.  This profound tension -between a substantial evolution in demands on IT and an extended period of economic doldrums- has placed CIOs in the crossfire.

The Good News

Companies like VMware, Microsoft and Citrix have helped to ease infrastructure challenges with new automation and management capabilities, centered on servers, virtualization and the promise of greater IT automation.  The public cloud players (Amazon, Google and Microsoft) have also helped enterprises with edge cases where agility was needed or building for peak capacity wasn’t economically feasible.

The Not So Good News

Networking and security players have been notably slower in addressing today’s agility and scale-related networking challenges; network automation has progressed more slowly than server automation as many network vendors have continued to focus on hardware-centric and feudalistic product and marketing strategies. The hope for private clouds is the evolution of the network and the emergence of cloud operating systems which can increase efficiency and agility by managing and securing workloads beyond VLAN constraints.

Yet the biggest challenge facing CIOs today may have more to do with the data center facility itself.

The Coming Data Center Race

The last ten years have seen an accelerating pace of change within IT, especially when it comes to agility, capacity and the need for capital and operating efficiency.  Yet most data centers are obsolete, and many enterprises are in the dark at what point obsolescence occurs. 

Most data center decision makers have been focused on securing adequate floor space, walls and back-up generator capacity, and have otherwise treated the data center as just another building in a portfolio of real estate holdings.  They have no idea how energy efficient their data centers are under most if not all operating conditions and measure capacity by available space. 

Virtualization has eased this problem by enabling more power density (more server capacity per rack) but that has shifted the issue to efficient power capacity.  Increased growth means increased waste as a data center passes its point of efficient power and cooling capacity.  Yet many operators don’t have a clear idea of where that point is beyond whether or not the data center is full of racks.

This has left many CIOs in the precarious position of driving innovation from facilities where growth may risk putting an IT team at a disadvantage.

The data center industry and the pace of innovation is at the core of the problem.  Data centers need to be more scalable and more energy efficient than typical office buildings because they: 1) are disproportionate consumers of power; 2) are increasingly strategic to a company’s operating posture; and 3) can be the most significant factor in a company’s ongoing ability to profitably innovate and grow.

Yet most data centers are designed (by today’s standards) to become obsolete in less than ten years, forcing more transactions than necessary for the same amount of IT capabilities and driving up capital and operating expense.   They leave the “at risk” CIO tasked with increasing agility and capacity at the expense of rising operating and capital expenses, which exacerbates an already difficult challenge.

For example, in ten years a highly efficient and vertically scalable data center can reduce operating expenses by about $70 million and allow for a doubling of IT capacity within a single building. Those who deliver IT services and apps from a more efficient data center can outperform those in obsolete facilities on pretty much every quantifiable measure.

The Good News: The Race is On

This widening gap between obsolescence and increasing demands on IT has spurred data center innovation in two areas.  At the low end of the market a multitude of vendors are offering highly efficient containerized data centers, complete with racks, which can be deployed quickly.  They offer viable alternatives to retail colocation and public cloud, but do have their drawbacks.  For example, you can still run out of space quickly and you might end up paying more for the contents than you could otherwise obtain directly from a supplier.  Some of them are not comfortable work environments for your IT teams and many offer a fixed offering that may not address your unique infrastructure needs.

Above 500 kWs of power consumption CIOs may want their teams to have more control over power densities, electrical and mechanical architectures, amenities, etc.  That leads to a larger, wholesale data center, where enterprises can have virtually complete control over a building financed by a public or private REIT. 

These REITs, however, can vary widely in terms of design and efficiency innovation.  Some have a preset “one size fits all” design (your capacity grows you simply buy/lease more space) while others offer comprehensive customization and collaboration options, including the vertical scalability game-changer which allows for considerable opex savings.

You can see examples of highly efficient and vertically scalable facilities by looking at Facebook’s Prineville (especially for infrastructure innovation), and Vantage’s Santa Clara Campus for facilities innovation. Note: I work for Vantage Data Centers, a private wholesale data center REIT.



Poster available upon request



  1. […] The Cloud and the Great Data Center Race by Gregness […]

  2. Reblogged this on Bret Carpenter's Blog and commented:
    Where is the Cloud going?

  3. I still think that Data Centers should be funded indirectly though HUD…that is if Romney does shut down the Department.

  4. […] The Cloud and the Great Data Center Race I talked about the role of the network as one of three key areas of interest to CIOs migrating to […]

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