Why data centres?


Data centres originally started life as computer rooms in office buildings, but as the number of servers grew, they began to be housed in dedicated facilities to meet their huge power and cooling requirements.

Growing market in the Developed World:

The market is growing rapidly with the expansion of internet use in areas like banking, shopping and public services, as well as for providing online information and entertainment (1).  Large companies typically spend 25% of their IT budgets in this area (2).   This was the only area of IT spend that maintained itself in the recession (6) and is set for 15% growth per year (5).

Data centre clients’ highest priorities are having a physically and politically secure location, access to ultra-fast international telecommunications, and guaranteed availability of the facility nearly 100% of the time (3).  Small numbers of staff can support large operations, so labour costs are not a major consideration.  For these reasons, data centres are mostly located in N America and increasingly in Europe.  

Trends:
Fast moving:  IT equipment is replaced on average every 3 years.  New technologies such as blade servers which pack huge processing power in a very small space (3) or cloud computing (4), which allows data to be moved instantly from one physical location to another, spread very fast.

Location: Traditionally clients have wanted to be close to ‘their’ data so most are located in urban centres (5).  However, with cost pressures there is an increasing trend to build in areas where land is cheap (7) or energy is cheap (3).

Outsourcing:  Large Internet companies such as Google, Microsoft, Facebook, operate their own data centres but the recession is encouraging many others to outsource (8).  This can be either web hosting, where the outsourcing company provides and manages IT on behalf of a client; or data centre hosting where the client manages the IT and the outsourcer provides the building, facilities and local servicing.

Scale and Standardisation: On the one hand there is a trend towards ever larger data centres (9), these are often planned and built as a series of standard, smaller size modules which can then grow into large campuses.  Many of the biggest are in the US but there are also large ones in Europe: Microsoft opened a 51,000 m2 facility in Dublin last year (9); the first module in a planned 60,000m2 data centre opened in Cambridgeshire (10) and planning permission has been granted for a 250,000m2 data centre campus in Lockerbie, Scotland (7).

More and more energy needed:

The number of servers is growing fast, and so is their average processing power.  New technologies such as blade servers can pack huge processing power in a very small space (3).  Historically, more than half the energy used in a data centre was for cooling and refrigeration, but this can be reduced if the data centre is in a cool climate (11).  Until recently, costs of IT equipment was the major element in running a data centre; today, energy costs as much if not more (1).  According to McKinsey, rising data centre costs could threaten profits in information intensive industries (2).

Iceland is already marketing itself as an attractive location for data centre operators because of their cool climate and plentiful renewable energy (12).  Scotland could be equally attractive.

 

References used in this page:

(1) EPA 2007:  Report to Congress on Server and Data Centre Energy Efficiency, Public Law 109-431, EPA US, August
(2) Kaplan, J: Forrest, W; Kindler, N: Revolutionizing Data Centre Efficiency, McKinsey, July 2008
(3) PriceWaterhouse Coopers 2007: Benchmarking Study on Iceland as a Location for Data Centre Activity, May
(4) Marketwire  2009:   Iomart Hosting launches Cloud Computing service Marketwire, October 6, 2009 Tuesday
(5) Energy Cravings of the Data Explosion    ENDS-415, August  2009
(6) Computing.co.uk   2010:  Global IT industry to return to growth in 2010 http://www.computing.co.uk/computing/news/2256513/global-industry-return-growth,  21 Jan 2010, accessed 28 Feb 2010
(7) Lockerbie Data Centre  2009: Peelhouses Data Centre & Sustainable Village: Masterplan Document, March 2009 http://www.lockerbiedatacentres.co.uk/
accessed 2 Feb 2010
(8) Property Week 2008: European data centre market review, Property Week website, CB Richard Ellis; http://www.propertyweek.com/story.asp?storycode=3117737,  accessed 12 February 2010
(9) Miller, R 2010:  The World's Largest Data Center http://www.datacenterknowledge.com/special-report-the-worlds-largest-data-centers/          13 April, accessed 20 April 2010
(10) Cambridge Data Centre  2010    Website of Elean Data, http://www.eleandata.com/,   accessed 10 February 2010
(11) SLVG 2008: Silicon Valley Leadership Group: Data Centre Energy Forecast, August
(12) Verne Global 2010: Icelandic Advantage, http://www.verneglobal.com/icelandic_advantage/,  accessed 20th April 2010