Wednesday, March 17, 2010

Data Centers to Expand in 2010, 2011: Campos Research & Analysis said's demand will be high for data centers

Data Centers to Expand in 2010, 2011

Rich Miller

More than a third of large corporate data center users in North America plan to expand their footprint in 2010, and many are expanding because they have run out of power, not space. Those were the key findings in survey data released Wednesday by Digital Realty Trust. The survey of senior decision makers with responsibility for their companies’ data center strategies was conducted by Campos Research & Analysis for Digital Realty. Among the key findings:
    • 83 percent of respondents are planning data center expansions in the next 12 to 24 months;
    • 36 percent of respondents have definite plans to make those expansions during 2010;
    • 73 percent of respondents plan to add two or more facilities as part of their data center expansions;

It’s not surprising that Digital Realty believes demand will be high, since the company is in the business of building and leasing data centers. But the customer survey’s major points were echoed by multiple panelists at Wednesday’s New York event.

Financing is a Factor
“Demand has been pretty steady,” said Dan Golding, Managing Director at DH Capital, an investment bank specialized in hosting and telecom deals. “The story has really been supply. It’s been very, very difficult for people to finance new data centers.”

At the national level, the pending demand for data center space may be three times greater than the available supply of quality space, according to Jim Kerrigan, the director of the data center practice at the real estate firm Grubb & Ellis. “All those deals that got shelved in 2009 because the CFO said no .. they’re going to happen,” said Kerrigan.

The end users at DataCenterDynamics New York included large firms in the financial sector, who concurred with the notion that cost-cutting has resulted in pent-up demand for data center space. “A year and a half ago we were talking about new data centers,” said Glenn Neville, Director of Engineering at Deutsche Bank. “Since then we’ve been talking about how long we can go with our current data centers. Our plans for growth are still there. Those plans are being postponed, but they’re not being cancelled.”

“It feels like someone closed a door, and things are backing up behind it,” said David Schirmacher, a vice president at Goldman Sachs.

Big Chunks of Space Grow Scarce
Kerrigan said the supply and demand challenges will be most acute for companies needing large footprints of contiguous space. That imbalance stands in stark relief to the requirements described in the Digital Realty survey, in which 70 percent of companies planning data center expansions say they envision large projects of at least 15,000 square feet in size or 2 megwatts or more of power.

“One of the most interesting pieces of data in this study is the lead role that power is now playing in these expansions,” said Chris Crosby, Senior Vice President of Corporate Development for Digital Realty Trust. “The need for additional power has become the main driver for data center expansion plans as companies seek facilities with adequate power and favorable utility rates to control operating costs.”

As a result, more companies are tracking their data center power usage and using the data in their capacity planning. The survey found that 76 percent of respondents now meter their power use, while the number of companies that meter power down to the PDU level increased by 29 percent over last year. “These are very positive signs that companies better understand their data centers’ energy use and can make informed decisions to reduce energy consumption,” said Crosby.

Digital Realty Trust: Data Centers to Expand in 2010, 2011

Written by Jeffrey Clark
Tuesday, 09 March 2010
A 2010 survey conducted by Campos Research & Analysis on behalf of Digital Realty Trust indicates that a significant portion of large North American companies are planning to expand their data center infrastructure in 2010 and 2011. This survey, conducted in mid-January, queried high-level company employees (executives or upper-level managers in information technology or finance) from 300 large companies. The participant companies were required to have a minimum of 5,000 employees or a minimum annual revenue of a billion dollars, and the individual respondents were required to be in charge of managing some aspect of the company’s data centers, whether operation, expansion, or implementation.

The companies represented in the survey consist of a fairly wide cross section of industry, with slightly over a quarter dedicated to IT, the Internet, or telecommunications. About 15% of the companies were in finance, with the remainder in the “other” category. According to the survey, the companies average about four data centers each, with nearly 20% operating six or more data centers.

Of the companies represented in the survey, 22% built or acquired a new data center in the 12 months preceding the survey, and 63% did so between one and three years prior to the survey. With ever-increasing demand for data services despite the recent economic downturn and with most companies having built or acquired additional data center facilities over a year prior to the survey, a significant increase in data center facilities in 2010 and 2011 seems to make sense, especially as companies hope for continued economic recovery.

For 2010, 36% of responding companies indicated that they were “definitely” planning data center expansions; 46% responded that they would “probably” expand their data centers, leaving only 18% that were unlikely to initiate an expansion this year. The numbers for planned data center expansions in 2011 were virtually identical, with a total of 84% either “probably” or “definitely” planning an expansion. Most of the companies (63%) with definite plans to expand have only one or two locations slated for expansion; 14% indicated plans to expand four or more data center locations.

The survey also indicated that data center budgets are on the increase, with 75% of the respondents expecting some increase; 35% expect an increase of less than 10%, and 30% expect an increase between 10% and 20%. According to the survey report, the average budget increase for 2010 is forecast at 8.3%—a change of +1.7% over the 2009 budget increase. IT budgets followed a similar trend, with an average expected increase of 8.1% and with about 73% expecting some level of budget growth. On average, the survey report indicated that 35% of represented companies’ IT budgets are dedicated to data center operations and development.

At the top of the list of preferred locations for new or expanded data centers are several American metro areas, led by New York City, which is closely followed by Chicago, Los Angeles, and Dallas. Foreign locations that ranked high on the survey’s list included London, Singapore, Paris, and Tokyo.

The survey also inquired about the respondents’ reasoning for their expected data center expansion in 2010; those that indicated on the survey definite plans for expansion rated the relative importance of various reasons for this expansion. The leading reason was power capacity, with 74% of the respondents indicating that this reason was “extremely important.” Next was disaster recovery and Sarbanes-Oxley (compliance, presumably) at 72%, followed by security at 69% responding with “extremely important.” Other possible reasons cited in the survey include energy efficiency, consolidation, cooling, redundancy, potential regulations, environmental concerns, and need for additional space.

A potential indicator of the scope of the expected 2010 data center expansions is the expected change in power usage. According to the survey report, the average expected power usage increase among companies that have definite plans for expansion is 12.8%, with 40% planning between a 10% and 20% increase. For all companies included in the survey, the average expected power usage increase is 8.3%.

Overall, the survey commissioned by Digital Realty Trust indicates no slackening in large companies’ increasing need for data center services. The expected expansions over the next two years are likely predicated on whether the economy begins to recover or whether the United States (and, to a lesser extent, the rest of the world) is in for a so-called double-dip recession.

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Underground Secure Data Center Operations

Technology based companies are building new data centers in old mines, caves, and bunkers to host computer equipment below the Earth's surface.

Underground Secure Data Center Operations have a upward trend.

Operations launched in inactive gypsum mines, caves, old abandoned coal mines, abandoned solid limestone mines, positioned deep below the bedrock mines, abandoned hydrogen bomb nuclear bunkers, bunkers deep underground and secure from disasters, both natural and man-made.

The facility have advantages over traditional data centers, such as increased security, lower cost, scalability and ideal environmental conditions. There economic model works, despite the proliferation of data center providers, thanks largely to the natural qualities inherent in the Underground Data Centers.

With 10,000, to to over a 1,000,000 square feet available, there is lots of space to be subdivided to accommodate the growth needs of clients. In addition, the Underground Data Centers has an unlimited supply of naturally cool, 50-degree air, providing the ideal temperature and humidity for computer equipment with minimal HVAC cost.

They are the most secure data centers in the world and unparalleled in terms of square footage, scalability and environmental control.

Yet, while the physical and cost benefits of being underground make them attractive, they have to also invested heavily in high-speed connectivity and redundant power and fiber systems to ensure there operations are not just secure, but also state-of-the-art.

There initially focused on providing disaster recovery solutions, and backup co-location services.

Clients lease space for their own servers, while other provides secure facilities, power and bandwidth. They offers redundant power sources and multiple high-speed Internet connections through OC connected to SONET ring linked to outside connectivity providers through redundant fiber cables.

Underground Data Centers company augments there core services to include disaster recovery solutions, call centers, NOC, wireless connectivity and more.

Strategic partnering with international, and national information technology company, enable them to offer technology solutions ranging from system design and implementation to the sale of software and equipment.

The natural qualities of the Underground Data Centers allow them to offer the best of both worlds premier services and security at highly competitive rates.

Underground Data Centers were established starting in 1990's but really came into there own after September 11 attacks in 2001 when there founders realized the former mines, and bunker offered optimal conditions for a data center. The mines, and bunkers offered superior environmental conditions for electronic equipment, almost invulnerable security and they located near power grids.

Adam Couture, a Mass.-based analyst for Gartner Inc. said Underground Data Centers could find a niche serving businesses that want to reduce vulnerability to any future attacks. Some Underground Data Centers fact sheet said that the Underground Data Center would protect the data center from a cruise missile explosion or plane crash.

Every company after September 11 attacks in 2001 are all going back and re-evaluating their business-continuity plans, This doesn't say everybody's changing them, but everybody's going back and revisiting them in the wake of what happened and the Underground Data Center may be just that.

Comparison chart: Underground data centers

Five facilities compared
Name InfoBunker, LLC The Bunker Montgomery Westland Cavern Technologies Iron Mountain The Underground
Location Des Moines, Iowa* Dover, UK Montgomery, Tex. Lenexa, Kan. Butler County, Penn.*
In business since 2006 1999 2007 2007 Opened by National Storage in 1954. Acquired by Iron Mountain 1998.
Security /access control Biometric; keypad; pan, tilt and zoom cameras; door event and camera logging CCTV, dogs, guards, fence Gated, with access control card, biometrics and a 24x7 security guard Security guard, biometric scan, smart card access and motion detection alarms 24-hour armed guards, visitor escorts, magnetometer, x-ray scanner, closed-circuit television, badge access and other physical and electronic measures for securing the mine's perimeter and vaults
Distance underground (feet) 50 100 60 125 220
Ceiling height in data center space (feet) 16 12 to 50 10 16 to 18 15 (10 feet from raised floor to dropped ceiling)
Original use Military communications bunker Royal Air Force military bunker Private bunker designed to survive a nuclear attack. Complex built in 1982 by Louis Kung (Nephew of Madam Chang Kai Shek) as a residence and headquarters for his oil company, including a secret, 40,000 square foot nuclear fallout shelter. The office building uses bulletproof glass on the first floor and reception area and 3-inch concrete walls with fold-down steel gun ports to protect the bunker 60 feet below. Limestone mine originally developed by an asphalt company that used the materials in road pavement Limestone mine
Total data center space (square feet) 34,000 50,000 28,000 plus 90,000 of office space in a hardened, above-ground building. 40,000 60,000
Total space in facility 65,000 60,000 28,000 3 million 145 acres developed; 1,000 acres total
Data center clients include Insurance company, telephone company, teaching hospital, financial services, e-commerce, security
monitoring/surveillance, veterinary, county government
Banking, mission critical Web applications, online trading NASA/T-Systems, Aker Solutions, Continental Airlines, Houston Chronicle, Express Jet Healthcare, insurance, universities, technology, manufacturing, professional services Marriott International Inc., Iron Mountain, three U.S. government agencies
Number of hosted primary or backup data centers 2 50+ 13 26 5
Services offered Leased data center space, disaster recovery space, wholesale bandwidth Fully managed platforms, partly managed platforms, co-location Disaster recovery/business continuity, co-location and managed services Data center space leasing, design, construction and management Data center leasing, design, construction and maintenance services
Distance from nearest large city Des Moines, about 45 miles* Canterbury, 10 miles; London, 60 miles Houston, 40 miles Kansas City, 15 miles Pittsburgh, 55 miles
Location of cooling system, includng cooling towers Underground Underground Above and below ground. All cooling towers above ground in secure facility. Air cooled systems located underground. Cooling towers located outside
Chillers located above ground to take advantage of "free cooling." Pumps located underground.
Location of generators and fuel tanks Underground Above ground and below ground Two below ground, four above ground. All fuel tanks buried topside. Underground Underground
*Declined to cite exact location/disatance for security reasons.