Survey: Data Center Expansion Continues

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The nation’s leading users of data center space continue to increase their use of mission-critical facilities, as nearly two-thirds are in active expansion mode, according to a survey of Data Center Knowledge readers.

The results underscore the continued need for new data center space, but reflect some changes in how companies are procuring new facilities. The data also found mixed adoption of cloud computing services, suggesting that large users of data center space are moving cautiously in introducing cloud services.

63 Percent in Expansion Mode
Sixty three percent of Data Center Knowledge readers say they are either in the midst of data center expansion projects or have just completed a new facility. The majority (59 percent) continue to build and manage their data centers in-house, but 41 percent are now using a wholesale data center provider or other third-party company for their expansion.

Those findings support anecdotal accounts that a growing number of major data center users are seeking to preserve capital by making more use of third-party providers, a trend that has boosted the fortunes of wholesale data center providers that lease turn-key “plug-and-play” space.

Wholesale Deals May Limit Cost Overruns
In addition to offering savings on construction costs, DCK readers reported that using a wholesale provider limited cost cost overruns. About 20 percent of projects did not complete on time or came in over budget, but in-house data center projects were twice as likely to have cost over runs between $1 million and $10 million, as opposed to projects that involved a wholesale provider.

The Data Center Knowledge survey was conducted in July 2010, and gathered responses from more than 240 readers. DCK readers are among the most active users of mission-critical space, as 51 percent of respondents operate three or more data centers, including 26 percent who operate at least 10 data centers.

This research confirms that demand for data center space has continued through the economic downturn, as the growth of online services and digital data has prompted companies to continue to expand.

This supports results from major colocation and data center service providers, who have reported continued customer growth and leasing of new space in the wake of the September 2008 financial meltdown. While sales cycles have legnthened in some parts of the enterprise market as companies consider more options, Internet companies and managed hosting providers have been moving quickly to add data center space.

Mixed Picture on Cloud Implementation
The growth of cloud computing is being carefully watched by many in the hosting and data center industry. The Data Center Knowledge survey found that nearly half of respondents have implemented cloud services one some level. Eleven percent say they have implemented cloud computing “broadly” while another 21 percent have implemented selectively in production and 15 percent are using the cloud for testing and development.

But holdouts remain. Twelve percent reports plans to implement cloud services within the next two years, while 19 percent of readers said they had “no plans for cloud computing.” 

Strong Interest in Green IT
The survey results reflected the industry’s recent focus on energy efficiency and adapting facilities to use less electricity. According to the survey the topics of greatest interest to the Center Knowledge Readers are:
1) Data Center Design
2) Green IT and Energy Efficiency
3) Power and Cooling
4) Data Center Management and Automation
5) Solutions to Reduce Energy Cost

A recent report projected that the drive to build greener data centers will push data center investments from $7.5 billion to $41.1 billion by 2015.

Thank you to all of our readers who participated in this past survey.

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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5 Comments

  1. Interesting survey, particularly regarding cloud. How many respondents were there?

  2. I’m not surprised that the survey results headed this direction. People are definitely expanding and starting to use wholesale hosting as an alternative to building their own. Hosting sites will soon reach some capacity constraints and this may change as the pricing increases. Regarding cloud, a lot of people have fears about the putting information into the cloud. These fears include irrational issues around privacy and security of emails, as well as the service/could availability. Regarding the security, if hackers want the data they’ll get it, regardless of where it’s located. The more important concerns should be around service levels. Most cloud providers don’t provide the high level of availability that people are used to and downtime for these services will potentially be their downfall.