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Data Centers: The Next Wave of IT Innovation

Industry poised for electrical, mechanical and architectural innovations

Energy has been one of the largest variable costs for large technology companies and today is becoming increasingly material for large enterprises of all kinds.  Last week at the FIRE Conference I heard Ford's CTO talk about how Ford wanted to be seen as a technology company.  As I listened to Paul Mascarenas talk about smart cars I couldn't help but to wonder how many of the world's largest companies have at least discretely considered evolving into more technology-centric products.

The data center is the factory of the new cloud economy and is a major inflection point for enterprise profitability.  Those who deliver the most apps, services, etc. per kilowatt/hour have a competitive advantage.  And with data centers accounting for close to 1.5% of electricity consumption in the U.S., increasing energy efficiency in the data center is becoming a strategic business and community imperative.

Since before the dotcom era, enterprises have built their own data centers with a keen focus on availability, or uptime.  Many of those data centers have now outlived their usefulness and are substantial burdens on their IT teams.  As new data centers are built, uptime considerations need to be combined with efficiency considerations.  They must be addressed together.

Increasing demands for IT resources, rising rack densities, and increased power and cooling requirements are exposing tired designs, and increasing power requirements. Simply adding more space is a shortsighted approach to what promises to be a longstanding issue: the efficient use of company resources, especially those strategic to the bottom line.

Today's modern data centers are, on average, 30%+ more efficient than data centers built even five years ago, due to rising densities and the impact on electrical and mechanical innovation.  Well-capitalized tech companies (including Google and Facebook) have invested billions in data center innovation, from sophisticated water-cooling to internal rack architectures optimized for efficient airflow.

Many enterprises, however, are suspended between the cost and risk of building innovative data centers and leasing wholesale data centers.  The traditional wholesale data center industry (including Digital Realty Trust [DLR], Dupont Fabros Technology [DFT}, and regional player CoreSite [COR]) has been very successful in building standardized designs that address a subset of the enterprise data center market.  Innovation, in a nutshell, has been limited to those with the deep pockets and courage to build their own.

Today wholesale data centers can be classified as innovative (engineering-optimized for specific enterprise goals and local resource abundance/scarcity) or traditional (from pods to containers, once type of space serves all).

With Vantage Data Centers entering the market (see highlights from our Smart Data Center Revolution event on Earth Day 2011), expect to see some changes in an otherwise transaction-centric industry.

Increasing Reliability and Efficiency

As wholesale data center providers evolve you can expect more campus-scale projects with:

  • dedicated substations and higher voltage distribution from the substation to the data center floor;
  • elimination of PDUs;
  • redundant backup generator power with 2N electrical configurations to the floor;
  • high efficiency UPS units; and
  • pre-provisioning of data centers for additional load (vertical scalability) including skid-mounted generators and UPS and preprovisioned switch gear.

Enterprises that continue to operate or lease traditional data center space (where only about half the electricity entering the building is used to power and cool the data center facility), put themselves at a competitive disadvantage. They pay significantly more for the operation of every server.  Increasingly what is good for business is good for the environment, and vice versa.

The problem was starting to appear as early as five years ago (from Computerworld):

Data centers "are becoming more and more swollen," IDC analyst Vernon Turner said today at the IDC Virtualization Forum here. Most of the servers purchased today cost less than $3,000. And while that may sound inexpensive, the annual power and cooling bill for 100 servers is about $40,000. In total, for every $1 spent on a server, $7 is spent on support, he said.

-          Patrick Thibodeau, Servers Swamp Data Centers as Chip Vendors Move Ahead, Feb 6, 2006

After the energy consumed directly by the servers, routers and switches within a data center, power distribution and cooling provide significant opportunities for energy conservation.  New, high efficiency data centers -from the innovators- are bringing power closer to the data center at utility distribution 12 kV to 34.5 kW. Stepping it down close to 480 V conditioned power loads results in less loss of power.

Cooling is the other major area where energy savings are being achieved. Where geography and climate permit, data center owners and operators are taking advantage of free cooling via airside and water side economization. Supplementing this form of cooling with chillers only in hot months and operating the data center at higher overall temperatures is also positively impacting energy consumption.

You can therefore expect to see more data center customization based on location, including climate, humidity and air and water quality.  Efficient data centers will be designed for the optimum use of both scarce and plentiful local resources, instead of the "one design fits all" approach common today.   There will always be a robust demand for traditional data centers, but expect more of the tech-centric enterprises to shift to highly-customized solutions engineered for specific needs and locations.

Recent advancements in specialized mechanical architectures will also optimize the flow of air and enable granular visibility and control of cooling with real-time data and power metering.

With these electrical, mechanical and architectural innovations campus-scale wholesale data centers are matching or closely approaching the best Power Usage Effectiveness (PUE) numbers for enterprise-owned data centers by the likes of Facebook and Google.  With the closing of the innovation gap, the decision then becomes one of whether to build or lease.

Here is a recent (April 2011) article in InformationWeek on How to Build a Modern Data Center.

Upgrading, Consolidating or... Leasing

By understanding the critical elements of a high efficiency data center and the options, and by looking at metrics such as PUE plus Carbon Usage Effectiveness (CUE) which looks at the carbon emissions associated with operating a data center (not its construction) and Water Usage Effectiveness (WUE) which measures how efficiently a data center is using water, enterprises can make better decisions about whether or not their existing data center(s) can or should be upgraded.

Per IDC (2010) the average data center in the U.S. is 12 years old, meaning it cannot be upgraded economically because of inadequate electrical systems and other physical and site limitations. A site's power distribution features for example, are not something that a company can readily go back and replace to save energy.

Every business will need to assess for itself the difference that leasing a more efficient building could make compared with owning an older building that is wasting increasing amounts of power and cooling every year as power demands increase.

If it is not possible to upgrade a data center, the build/lease question should be addressed.

What is the capital expense and risk involved in building or expanding data center capacity and what is the lost opportunity cost in time and potential unrealized return in making a decision to build? As innovation accelerates how reasonable is it to expect internal teams to keep up?  What will be the ongoing operating expense to run the new data center and what is the TCO over the 10-15 year lifespan of a modern, optimized data center that offers more IT capacity (more services, applications, etc.)  per kW?

What are the costs, advantages and others considerations of leasing data center space?

The ability to quickly access secure space and scale economies with operational service levels as needs evolve has strategic competitive implications, as does being able to reduce OPEX while preserving ownership and control of critical IT assets.

Smart data centers, whether they are owned or leased, offer significant environmental benefits and measureable cost savings.  For example, a 20k square foot space in a smart data center can reduce power and cooling by more than $1 million per year.  Data center innovation will become a critical inflection point, especially for technology-centric organizations, in the next 5-10 years.  And the location of those data centers will drive the location of strategic jobs, economic growth and the efficient stewardship of environmental resources.  The innovations being designed into these new catalysts of innovation will similarly drive additional IT efficiencies and innovations in other commercial and even residential construction.

More Stories By Greg Ness

Gregory Ness is the VP of Marketing of Vidder and has over 30 years of experience in marketing technology, B2B and consumer products and services. Prior to Vidder, he was VP of Marketing at cloud migration pioneer CloudVelox. Before CloudVelox he held marketing leadership positions at Vantage Data Centers, Infoblox (BLOX), BlueLane Technologies (VMW), Redline Networks (JNPR), IntruVert (INTC) and ShoreTel (SHOR). He has a BA from Reed College and an MA from The University of Texas at Austin. He has spoken on virtualization, networking, security and cloud computing topics at numerous conferences including CiscoLive, Interop and Future in Review.

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