Strong Data Center Demand Seen for 2010

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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 DataCenterDynamics 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.

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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7 Comments

  1. Great news, glad to hear about the strong demand. We have space available here in eastern PA! :)

  2. The energy we do not use is the cheapest way to save. We do not have to build new power plants or for that matter new data centers. I am interested to know how many idle servers virtual or physical have been identified in data centers and then turned off to reduce power. I would like to know how many data centers have turned the thermostat up to 80 degrees F. I am keen to understand if companies are scheduling their desktops to be turned off at night to reduce power. I thought I heard that DELL saved 40% on their energy bill by turning off desktops. Full disclosure: our company helps folks reduce their energy costs!

  3. So many issues here that need to be addressed. We would be appreciative of any constructive comments on our new product, the InteliCloud 360 (www.intelicloud.com) and some of the solutions it has to offer. This product uses up to 60% less energy running multiple applications from the same platform. Thank you, Andrew Birnbaum

  4. Steve Lester

    We've gone through our data centers and are consolidating the under-utilized (have been for years) and removing out of production systems. We're segregating our low and mid-density systems to better balance power usage and cooling deliver. We're moving to 74* F not 80* as most of the data indicates dimishing returns after you exceed that set-point and it leave little room for error/issues. But we're still adding significant demand which these actions don't fully mitigate so we're building new capacity in several areas of the country. That all said, you can't easily remove or consolidate your DR systems unless you can accept degraded performance in a fail-over scenario. Nor, can you easily force your customers onto new hardware or software to save power when their concern is delivering a solution/service to their customer. I think most companies are doing a lot of the same things we are but there are still business driven challenges out there and power costs are still too removed from the final customer

  5. Du Pont fabros technology.. we are gonna take over the market

  6. How much time does a Zeon server(DATACENTRE TYPE) to switch on after it has been switched off in the following contingencies SAAS PAAS IAAS Idle switching