Oil-and-gas-industry customers often have unique data center needs and are increasingly outsourcing their data center needs. Whether its upstream needs for High Performance Computing in the world's most remote locations or a desire to get out of the business of operating data centers and outsource core infrastructure on the distribution and supply side, opportunity for data center service providers abounds.
The industry's computing needs can be split into two categories: upstream and downstream (downstream also includes midstream). "Upsteam" refers to where they get the oil. This is where sector focuses on exploration and research and development. "Downstream" refers to where the oil and gas are ultimately going, or the needs on the distribution and supply side.
While oil prices dropping has some equity analysts concerned about the effect on colo providers that rely on energy-sector customers for big portions of their revenue, oil prices don't necessarily affect data center outsourcing needs negatively. Colocation becomes more attractive to those downstream as they look to save by outsourcing. Companies upstream have constant computing requirements for R&D and exploration.
Mansfield Outsources to QTS
The downstream sector is increasingly turning to data center outsourcing. One example is Mansfield Oil, which recently transitioned from company-owned data centers to a QTS Realty Trust facility in Suwanee, Georgia -- in the wider Atlanta Metro.
Mansfield is on the distribution and supply side. It is a North American energy supply, logistics, and services enterprise. It partners with clients to provide technology-based solutions to support their energy supply chain needs.
"Mansfield is consolidating a couple of data centers into QTS, so it’s all about increasing performance on what they do, which is providing technology," said Chad Giddings, vice president of marketing at QTS.
QTS will help Mansfield stabilize its core infrastructure platforms, transition network carriers, reconfigure and upgrade hardware, and more. In addition to migrating IT infrastructure, Mansfield also migrated its IT infrastructure team to the massive 370,000-square-foot QTS data center.
"We realized that it doesn't make sense for Mansfield Oil to be in the data center business, when experts like QTS build and maintain data centers at a level beyond what we can manage in terms of security, monitoring, and technology," said Hercu Rabsatt, an IT infrastructure director at Mansfield, in a release.
Sector Has Unique Reliability Requirements for HPC
CyrusOne is a data center provider that does a lot of business with companies on the R&D side of the energy industry.
These customers' HPC needs require special data center environments. “Top of mind [with HPC] is the level of redundancy,” said John Hatem, senior vice president of data center design at CyrusOne. “Over the past five years, it’s gone from single generator and UPS to either only UPS or just straight utility power. We’ve seen a shift from a need of five nines reliability to three nines. Geographic diversity of two sites with three nines in a single site is more favorable, as there’s less operational expense."
No maintaining generators and UPS means CyrusOne is able to deliver at a much lower cost per megawatt.
HPC customers are typically on a much higher density than a traditional enterprise-type client, said Hatem. High densities mean customers are more prone to water-cooled environments, which CyrusOne said it’s been doing for over seven years. There are also opportunities to innovate on the air side, as R&D customers in general are willing to push the ASHRAE envelopes.
“They’re typically knowledgeable and much more open with temperate and humidity,” said Hatem, saying some customers operate at 80F. The second edition of ASHRAE guidelines in 2008 recommended an upper limit of 81F.
Operating at higher temperatures means a lot more hours of free cooling. “These customers are trying to save front end and on the operational side by driving down PUE,” he said.
Prefab Modules Popular Choice for Exploration
Sometimes, these data centers are needed in some of the most remote parts of the world. For remote data center needs, pre-fabricated is the way to go, according to George Sutton, business development manager, prefabricated data centers North America at Schneider Electric. The company's AST modular offerings are used a lot for energy exploration in remote areas.
“As the price of oil has dropped, the size of opportunity is hard to explain,” said Sutton. While the opportunity seemed immense when prices were at an all-time high, lower prices don't mean fewer exploration needs, and these upstream needs are extremely unique, according to Sutton.
“Imagine having to build an Uptime-compliant, Tier-rated data center in a location that doesn’t produce any materials,” said Sutton. “It becomes quite an issue. Even things like concrete, they have to send over from U.S.” In other words, it's the logistics of building a facility in a remote location that makes pre-fab a good option.
Schneider’s AST delivers high-end pre-fab data centers to these locations in short order, for large companies that are often legally complex. Sutton said the nature of the structure tends to be hardened depending on the environments.