Data Center Locations
Considerations for a new location
Power, regional economics, regulation and technical costs can have a major sway on a new data center site. By Jim Smith, CTO of Digital Realty Trust
The general consensus of leading market analysts and research fi rms is that the data center market can look forward to continued growth for at least the next fi ve years. A variety of factors are typically cited for these enviable macro growth projections including: the continued shift to a global transaction economy, the plethora of web-based applications and the rise of cloud-based services.
While there is wide consensus on the continued escalation of overall demand, there is stratifi cation in terms of the geographic distribution of the projected need for data center capacity. Each of the major geographic areas in the data center market (the US, Western Europe and Asia Pacifi c) and their individual city-level sub-markets are poised for growth but there are four factors that will infl uence the degree of expansion in each region: Power availability; Technical cost considerations; Regulation; and Regional economic considerations.
Power availability
There is no argument that data centers are some of the largest consumers of electricity. Continued technological and process developments like variable speed fans and hot and cold-aisle containment continue to drive effi ciency but despite this, these facilities will still continue to consume thousands of megawatt s of power each year.
This insatiable need for electricity will potentially serve as a “governor” on the rate of growth in markets around the world. Although we see data centers being constructed in a number of non- traditional areas, the major global metropolitan areas will still be the primary areas of focus for fi rms seeking additional data center capacity. Building a data center in a pine forest or a cave does not translate well for businesses in areas such as fi nancial services and banking.
What will govern these companies’ decisions is the availability of aff ordable power. Areas with unregulated power rates that off er the opportunity for volume purchasing discounts will become increasingly att ractive
over the next few years for all data center providers and customers. Regulated markets and those with existing capacity constraints will continue to see demand exceed supply but at a substantially lower rate than their less encumbered counterparts.
Technical cost considerations Although the cost of data center components is always a consideration, these one-time capital expenditures are not the primary issue in this area. In the context of our focus on growth, the importance of cost considerations is within the area of on-going operations. As the applications within a data center continue to increase in their generation of revenue for the organization the desire to continually minimize associated costs for their support will be omnipresent.
The magnifi cation of the emphasis on on-going cost reduction, or at the very least maintenance, are causing today’s data center decision-making process to include questions that traditionally have not been included within design discussions: Do I really need a raised fl oor? How much redundancy do I really need? These questions are now very real considerations. A prime example of this is the growing use of air- side economization as a cooling technology. Traditionally a taboo, its cost-eff ectiveness versus chilled-water alternatives is convincing companies to refl ect on their particulate reservations and more aggressively push traditional geographic boundaries.
Energy regulation To a large degree, regulation is a function of our fi rst two growth considerations: both currently proposed and in-place regulatory requirements will have impact on both the cost and consequences of energy usage.
The Carbon Reduction Commitment (CRC) in the UK and some of the proposed carbon related rulings of the US Environmental Protection Agency (EPA) exemplify government-mandated requirements that could potentially impact data center growth in selected geographies.
Jim Smith, CTO, Digital Realty Trust
The major concern related to any existing or proposed carbon related rulings in relation to data centers will be cost. For example, penalties placed on coal-fi red power plants in the US could force many providers to pass the new costs along to their customers thereby increasing the cost of power to data center facilities. In the case of the CRC levies on CO2 emissions it could potentially add expense to data center facilities that exceed documented emission thresholds.
Due to a variety of factors such as latency and synchronous communications requirements the potential of these additional energy cost burdens to dramatically reduce data center development in these areas is more than a litt le draconian but it will require many fi rms to revise their planning processes.
Global economics Although the global economic recession continues to have varying degrees of lingering eff ect on each of the three major global markets, its impact has not been as dramatic as on many other industries. Due to the continued growth in computing requirements and the inability of many current data centers to support them, the need for data center capacity has been exacerbated in many ways. The main impact that we have noted regarding the economic status of each of these three areas has been a more prolonged decision making cycle but not wholesale elimination of projects.
In assessing the global marketplace for data center expansion the industry has every reason to be bullish on its future. The modulation of demand for each geographical region will be based on the interrelationship between the four factors that I have described previously that highlight just how carefully companies will have to examine each to determine its eff ect on upcoming projects.
www.datacenterdynamics.com 5
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