Data center growth rates slow

Posted by Mike Vizard on Feb 24, 2015 2:00:00 PM

It would appear that the rise of cloud computing coupled with the advances in processors and storage technologies are finally conspiring to slow the growth of data centers around the world.

new report from 451 Research finds that the installed base of data centers only grew by two tenths of a percentage point year over year in the fourth quarter of 2014, representing some 4.3 million data centers and IT site locations.

81918853_f182e0f342_zFrom a square footage perspective, the report finds that traditional enterprise IT organizations continue to control 83 percent of the worldwide market. Multi-tenant data centers and cloud providers control 12 percent and 5 percent, respectively.

Demand for multi-tenant data centers

Demand for data center space among enterprise IT organizations dropped, but a corresponding rise in demand for multi-tenant data centers offset that drop, resulting in flat growth.

There’s also a global shift in terms of where data centers are being located. Growth in markets such as North America and Europe declined one percent and two percent, respectively, while emerging Asian, Latin American, and Middle Eastern markets all grew at 2 percent year over year.

Obviously, enterprise IT organizations are moving some of their workloads into the cloud. But just as significant are the arrival of high-performance processors that consume much less space.

At the same time, the rise of Flash storage enables organizations to reduce the physical footprint of their data storage.

Most enterprise IT organizations are just beginning to avail themselves of recent advances in processor and storage technologies, so IT services firms should expect to see the amount of physical data center space consumed by enterprise IT organizations continue to drop. One exception is the large amounts of Big Data likely to wind up being stored in the cloud given rise of Big Data and the relative cost of storing that same data inside a traditional enterprise IT environment.

Lower energy costs, higher savings 

The biggest challenge facing IT service providers is getting organizations to appreciate those savings. Reducing the amount of space required in the data center generally results in much lower energy costs. That can result in millions of dollars in savings in markets where the cost of electricity is relatively expensive. But all too often, it’s the facilities department that gets the credit for saving those dollars, which sometimes doesn’t give the internal IT organization the proper level of incentives needed to justify a major upgrade to the data center environment.

The end result is a scenario where the IT services provider has to make the case for modernizing the data center environment to the customer’s executive leadership. Most CIOs are happy to provide supporting evidence. It’s just that they don’t always have the best command of the financial benefits, such as representing how such an upgrade would impact the capital and operating expenses of the organization.

Most senior business executives, unfortunately, are not as focused on IT issues as they should be. But as more businesses start to realize that to one degree or another IT is their business, the easier the IT conversation will continue to become.

Photo Credit: Simor Carr on Flikr. Used under CC 2.0 license.

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Topics: Cloud Industry and Technology, Cloud Trends

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