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FOCUS BEHIND THE NUMBERS


Issue 1, December 2008


WHAT LIES BENEATH? – BUDGET TRANSFER,


DECISION DEFERRAL AND THE EVOLUTION OF ANXIETY The DatacenterDynamics Research & Analysis Programme tracked answers by the same respondents in 2007 and 2008 to shed light on what is really happening in the data center sector


The conflicting pressures of delivery, growth and efficiency, and the accelerating development of management and technological solutions requires a detailed mapping of industry trends. Trend research that maps a simple path from one point in time to another will tend to over- simplify current market complexities (see page 19 - The method).


The following research indicates that a high level of flexibility has emerged in the planning and budgeting for new data center investment. Pressures on upfront costs are accentuating concern about operating costs, the key concerns of power/cooling have shifted, facility development has reached a point of transition and that the uptake of technologies and solutions appears to be in a state of deferral.


There is an increasing emphasis on measurement, EER, planning and data center strategy methodologies. These appear to act in deferring adoption of particular options in situations where there is a choice of solutions. This may be the mark of growing market sophistication (i.e. to base decisions on understanding and analysis), of the increasing need for risk mitigation and financial accountability and, particularly outside the larger markets, of an increasing wariness of vendor claims.


GROWING INVESTMENT Figure 1


Based on aggregated data, both continents have (see The Sample below) seen a rise in investment each year from 2006 to 2009 and that, in 2007, both projected with reasonable accuracy what the levels of investment through to 2008. Both continents indicate reasonable levels of increase into 2009. (Figure 1) This overall data suggests a reasonable level of accuracy in budget projection and the likelihood that the credit crunch may impact later than the period under study.


BUDGETS IN FLUX Figure 2 THE SAMPLE


307 individuals responded in both 2007 and 2008. They work for 211 data center owner/operator organisations and attended a DatacenterDynamics conference in one of seven cities – New York (March), Paris (May), Washington (May), San Francisco (July), Chicago (September), Amsterdam (September), Frankfurt (September).


Collectively the sample organisations own and/or operate around 70000 racks globally and around 50000 square metres of space in key organisations in the IT, telecoms, finance, commerce, Government and managed services sectors.


Data center investments of North American respondents was around $7.5 billion in the 2007-8 financial period. Western European organisations invested Є2.0 billion over the same period (it should be noted that the European data does not include its biggest market – London – as this event is held at the end of the year).


18 www.datacenterdynamics.com


However the tracking of individual organisations suggests a period of considerable flux in budgetary provision with almost 40% of budget (i.e. billions of each currency) allocated for particular purposes finding its way into other forms of investment, in particular from refit into new build and vice-versa. (Figure 2) Since inertia usually slows significant budgetary changes, the profile below may be understated and no level of detail was collected on changes that may have happened within projects.


TECHNOLOGY ADOPTION PLANS Figure 3


There is also variation between those technologies and solutions intended for adoption and those actually adopted. While most technologies cluster in the middle of the chart, there are clusters at the periphery including:


• Those indicating high intention of adoption and which are most likely to be put on the back burner tend to include a range of possibly longer term ‘environmental’ measures


• At the converse point lie a range of planning, IT architecture and ‘whole of data center/management solutions


• Clustered to the bottom left in the low adoption/low intention quadrant are the majority of the power distribution technologies


• There are few technologies or solutions in the segment of the chart, at the high intention/high adoption quadrant. This is perhaps unsurprising since levels of adoption are almost always lower than levels of consideration. This is also the mark of a competitive and fast moving market where the technological landscape has changed over the time period in which the research has been compiled.


POWER AVAILABILITY WORRIES ON THE RISE Figure 4


The tracking research indicates also changes in the facility profile from 2007 to 2008. (Figure 4) While the number of racks under management has increased in aggregate by 11.9% the spectre of power costs and power availability, and moves towards efficiency mean that in a transitional period before efficiencies really kick in, the pattern of power demand changes. It seems to be one of moderate reduction of average demands (above 6 or 7 kW/rack) and the more intermittent reduction of maximum power demands in the 12 to 18 kW/rack range. Over the same period there have been marked increases in both average power demands below 4 to 5 kW/rack and maximum power demands below 10 to 11 kW/rack. [On this chart a factor of 1.0 equates to the maintenance of the 2007 power demand. A factor lower than 1.0 means that the 2008 kW/rack is lower than 2007; a factor higher than 1.0 means an increase in kW/rack between 2007 and 2008].


The research also indicates the evolution of anxiety between 2007 and 2008. Last year’s general concerns about power and cooling have morphed into more specific concerns about power costs and TCO. Individuals who last year expressed power and cooling concerns now highlight the problem of basic power availability (i.e. regardless of what it costs, will it be available to buy?). 


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