Thursday, January 10 2019
By Angelos Angelou, Founder & CEO, AngelouEconomics, AngelouEconomics.com
In real estate, it’s about: “Location, Location, Location!” Location matters – no really, it does! When the data amount is region-specific, it is important to have data centers off-site in the areas when needed. It is also a great option for driving down costs coming from being away from a major data hub such as those in cities. This is more than just choosing a data center closest to the customer’s business operations. Additionally, communities looking to recruit a data center operation should look at their commercial energy costs, talent pool and potential underdeveloped areas to place a data center. Connectivity will be a key consideration for a data center and is a key consideration for data center customers.
Both technological advances and companies adapting to industry changes contributed to the growth in number of data centers and data center expansions. A significant amount of the IT budget is spent on maintenance to keep up with the updates from growing customer demand.
From a site selector’s point of view, both perspectives need to look at the countless scenarios impacting the ability of a data center to meet the needs of a customer looking to grow their company’s storage, managed cloud infrastructure and/or application hosting solutions. In evaluating potential data centers, there are five key variables to consider: Location, Power, Space, Flexibility and Connectivity.
Site Selector: Data Center Customer Perspective
A potential data center customer should evaluate the benefits of a public cloud (e.g. Amazon Web Services, Google) versus operating directly in a data center (private, co-located, off-site). If the business should be in a public cloud, then the data center customer is the public cloud.
Public clouds are key data center customers. Therefore, the data center has to meet the public clouds unique business requirements that enable them to serve their customers. For example, a new IoT startup would rather use a public cloud than working directly with a data center. Here are the primary reasons businesses and startups use a public cloud and allow their cloud provider to choose their best data center:
However, there are several types of businesses that require a data center such as a company specializing in next generation computer vision algorithms with heavy CPU simulations benefit from an on-premise server farm to process heavy workloads. Also, financial institutions such as Texas Municipal Retirement Systems wants and needs a tight grip on their financial data prefer their own private data center. Additionally, larger institutions may use a combination of owned and collocated data centers where non-secure data can be in a colocation facility, but business data is essential to operations in a company-owned data center due to disaster recovery requirements and other compliance needs.
In this scenario, businesses are building or selecting the best data center that meets their unique business requirements. Here are the primary reasons businesses choose their best data center:
Data centers offer a secure environment enabling their customer (internal/external) to handle their critical business application and big data workloads. Since data centers operate in a private cloud and hybrid cloud infrastructure, companies can take advantage of all the benefits the cloud has to offer, including reliability, availability, flexibility and high performance.
Site Selector: Data Center Perspective
Data centers are providing highly reliable and secure cloud hosting solutions 24x7x365 simultaneously to thousands of global customers and should be designed with the highest uptime and efficiency possible. Data centers help their customers maximize availability, performance and security as well as comply with strict security and compliance requirements.
Data centers must provide exceptional service along with innovative solutions that help companies move their workloads to the cloud while meeting the stringent security and compliance requirements. Customers expect high capacity, low latency and secure connectivity from the data center and cloud while simultaneously balancing cost, scalability, compliance and security while designed for the utmost redundancy, resiliency and reliability. Given the competitive nature of businesses today, with customers expecting faster response times at all hours of the day, the traditional data center, with its more limited scalability and the inability to address rapid changes in business demands, will not enable enterprises to support the new business models needed today.
From a site selector’s point of view, data centers should also be fully committed to being active, positive members of the communities they operate in. Communities also need to evaluate their brownfields and greenfields along with their energy costs to potentially attract a data center and create new jobs for their residents.
Data Center Challenge – Space
For example, in September 2018, Flexential, a leading provider of hybrid IT data center solutions completed the $32 million expansion of its data center near Portland, Oregon. The 115,000-square-foot expansion brought the data center to 240,000 square feet and boasts international connectivity, 18 MW critical load UPS capacity, and industry-leading efficiency and design. The efficient design, coupled with direct, low-latency connections that span the U.S. and provide access to Asia-Pacific, make it an ideal location for companies seeking a cost-efficient IT infrastructure solution complete with capacity to expand with a global connectivity reach.
Therefore, data center location is a critical component for meeting customer requirements dependent on latency, costs, performance and security regardless if it is company owned or a business-service provider.
Site Selector Tip: Economic developers should work with private partnerships to find obsolete buildings for redevelopment into data centers and develop a talent pool to bring more jobs.
Data Center Challenge – Power
Therefore, the data center infrastructure is only as capable, adaptable and reliable as the power system that supports it. If a data center is considering expansion, these are some power features to consider:
Site Selector Tip: Ensuring sufficient power will be available for future data center expansions is paramount. When working with a data center client, the team needs to ask a potential location utility provider what the overall supply capacity is and how quickly can it allocate capacity away from other residential and commercial utility customers.
Data Center Challenge – Location
According to JLL and Area Development, these U.S. real estate markets have increasingly-strong demands for data center expansion: Chicago, Austin-San Antonio, Dallas, Northern Virginia, Norther California, and Phoenix. Like many areas close to major populations, real estate is a scarce resource.
Other site location factors can include climate, the state of the local economy, proximity to consumers, availability of power and networking connections and, perhaps importantly, politics.
With the growing demand for cloud services, data center growth is expected to be solid according to industry analysts. According to GlobeSt.com, North American markets account for more than 60 percent of the near-400 megawatts currently under construction around the world.
For example, TierPoint recently expanded its New York Data Center for their financial industry customers who depend on ultra-low latency network connectivity to midtown and lower Manhattan. It is located outside New York City’s 12-mile blast zone and the 500-year flood zone. The facility is well positioned to deliver disaster recovery solutions, including business continuity workspace while meeting compliance standards for HIPAA, PCI-DSS, GLBA and SOC 2 Type II and holding a EU-US Privacy Shield certification and ITAR registration.
Houston’s Greenspoint District is positioned literally at the crossroads of the region’s fiber optic infrastructure. More than a dozen long-haul and last-mile carriers have available fiber optic cable. Additionally, Greenspoint’s location outside of the 500-year floodplain, and far enough from the coast, mitigates the threat of hurricanes and provides a safe location where companies feel their data will be secure. Houston’s Greenspoint District is home to enterprise and collocated data centers, as well as high performance computing centers. These firms benefit from the region’s demand for services, economic incentives and a friendly political environment. Data Foundry built a 350,000-square-foot data center campus to expand its presence and capabilities to meet the demands of Houston customers offering wholesale and retail data center space, as well as providing internet connection services. Other industry leaders with locations in Greenspoint are Digital Realty Trust and CyrusOne.
Site Selector Tip: When working with a data center client, location and other factors may change the entire financial equation for expansion versus a new data center. However, keep in mind, the data center customer is focused on saving time and becoming quickly operational.
Data Center Challenge – Flexibility
To summarize the factors causing the increased demands on the data center operator:
Since data center real estate is becoming scarce, the data center operator faces these challenges:
IT decision-makers must determine the following when choosing a data center as an expansion, new build, or partnering with a colocation service provider:
For example, H5 Data Centers, a national colocation and wholesale data center provider, recently expanded its downtown Cleveland data center. The data center expansion includes the build-out of an additional 25,000 square feet of space and associated mechanical and electrical systems. The Data center qualifies for Ohio: state sales and use tax abatement incentives.
Site Selector Tip: When working with a data center client, remind the data center to retain operating funds to purchase that equipment, and the experience, capabilities, skills and expertise to install and make equipment ready in very short time frames to meet IT demand.
Site Selector Tips - Data Center Selection in Practice
Location and Space: