Development Magazine Spring 2012

Development - Ownership

Data Centers' Place in the Cloud

With cloud computing ubiquitous, data centers will pass from use like eight-track tapes...or will they? According to a recent survey by CoreNet Global and Newmark Knight Frank, 50 percent of companies are investing in and/or are planning to build or expand data centers. The chief concern is risk management and business continuity. There is a strong preference among corporations to manage the function internally and not outsource it.

“Data centers are the digital-age equivalent of the engine room driving today’s globally networked corporate enterprise,” observed Bryan Loewen, senior managing director/data centers, for Newmark Knight Frank Global Corporate Services. “The reliable, secure, continuous and efficient operation of data centers has thus become a function vital to the profitability of many companies in today’s and tomorrow’s worlds of e-commerce.”

The survey revealed that nearly two-thirds (62 percent) of executives surveyed from 30 multi-national corporations emphasize the selection of low-risk areas for their data center sites. A majority of the respondents (52 percent) also identified redundant power sources as a key location decision factor, along with access to high-speed fiber optic networks (57 percent). The two primary drivers for opening data centers are lack of existing capacity (48 percent) and company growth (47 percent).

The joint survey points out low adoption of LEED-certified facilities and outsourced operations. For example, only five percent of respondents rate LEED-certified centers as a top criterion for data center site selection. Yet a strong majority (57 percent) think LEED-certified owned or leased data centers are important in terms of future occupancy.

At the same time, very few companies (six percent) currently outsource their entire data center computing to the cloud. Nearly one-fourth (24 percent) do not use the cloud at all. Conversely, nearly three-fourths (71 percent) say their companies outsource at least some of their data center computing to the cloud. Almost one-third (29 percent), however, expressed a willingness to use outsourced partners to handle future data center requirements.

The survey shows that companies are also increasingly consolidating or combining their data centers. Some of the biggest concerns are:

  • Cost of relocation (32 percent)
  • Disaster recovery limitations (26 percent)
  • Need for infrastructure upgrades (26 percent)
  • Future rent escalations on leased centers (5 percent)
  • Growth and expansion limited by power supply (5 percent)
  • Growth limited by cooling capacity (5 percent)

Power usage effectiveness (PUE) is also a strategic priority in most data center cases. Survey participants rated a wide range of ways to improve their PUE, including:

  • Dedicated cooling infrastructure
  • IT loads with higher efficiency
  • Increasing control functionality with aim of improving efficiency
  • Increasing efficacy of server usage

A Solutions Series program on trends driving demand and location for today’s data centers is available in the eLibrary. These programs are available at no cost.

For more information

Newmark Knight Frank
CoreNet Global

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