Is the Corporate Data Center Disappearing?

The rise of the cloud has seen Google, Facebook, Microsoft, and others build mega-data centers the likes of which the world has never seen. These tech behemoths custom-built many of their facilities to include revolutionary cooling configurations, massive compute resources, and the ability to store endless amount of data. To make them greener, they added wind, solar, and battery resources. In short, they took the state of the art to a whole new level. 

That, in turn, led many organizations to utilize more of their resources. Over time, they relied less and less on their own internal data centers. In some cases, companies ended the practice of owning and operating their own data centers. 

IT Becoming a Utility?

Some wondered if eventually we would see the end to in-house data centers. Would the IT landscape morph into a wholly utility model similar to the way phone, water, gas, and power are provided – a few compute resource utilities serving the entire populace? 

For the last few years, that looked to be the case. The number of data centers declined. But the latest State of the Data Center report from AFCOM and Data Center World indicates that the end of the data center may well be a long way off. The report highlights the fact that for the second year in a row, there has been a plateau in the building of new data centers and in the renovation of existing data centers. 

The name of the game at the moment appears to be to maximize return on existing spaces in terms of density, efficiency, and return on investment. Thus, data center managers are packing more into the facilities they already have. 

In terms of raw survey results: 

  • 62% of respondents are all set in terms of space requirements for the next three years. 
  • 48% plan to build data centers or expand existing ones between 12 and 36 months from now.
  • 19% intend to deploy at least one new data center and another 19% plan to add two or more.
  • 5% stated they’d be building between five and nice new locations over the next 36 months. 

Colo and Hyperscale Expansion

Bill Kleyman, author of the report and Executive Vice President of Digital Solutions at Switch, noted that those building or expanding their data centers are mainly represented by colocation providers and the hyperscale/multi-tenant providers. 

“There continues to be a slow decline in enterprise data centers as leaders in the space focus on the business’s core competencies,” he said. “The way we design and build data centers is changing as well: a broader focus on performance, density, and efficiency.” 

This shows up in ways such as 62% of respondents saying rack density has increased over the past three years. 25% have rack densities as high as 7 kW to 10kW – not so long ago, 3 kW was regarded as being relatively dense.  

The Corporate Data Center’s Not Dead Yet

In summary, then, the corporate data center is far from dead. Those that possess them right now are unlikely to give them up any time soon. They have invested millions in then and in most cases, it would be financially irresponsible to toss those dollars out the window. 

But outside of the mega-providers and largest colos, don’t expect to hear many announcements about new corporate data centers. Instead, organizations are more likely to continue to raise density, keep some workloads in-house, and send others to the cloud. It will be a long time before anything even remotely resembling the current power market business model materializes whereby a few compute utilities serve the multitudes. 

Drew Robb
Drew Robb
Drew Robb has been writing about IT and engineering for more than 25 years. Originally from Scotland, he now lives in Florida.

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