In particular, the following trends have become more pronounced and clear over the last four years:
- The number of sophisticated data center customers is steadily increasing. Data on space, power, and network cost is more readily available in the market, and the competitive marketplace is stronger than ever. By and large this has not driven down cost across the board, but it has for the sophisticated clients, and it has slowed price increases for others. The magnitude of this can be stunning. I have seen reductions as high as 30%+ on very sizable contracts.
- It is all about cost per kW and Mbps. The only way to truly compare is to pull out the costs for these two elements -kW cost rolls up, space, cabinet, cooling, and all aspects of power - utility, back-up, UPS, etc.; -Mbps rolls up cross connect, circuit, peering, usage, etc. These numbers vary widely if customers have not been properly educated and focused on them. I routinely see kW costs as high as $600 per month and as low as $100 per month; and Mbps costs as high as $300 and as low as <$1.
- Private Cloud is real and it is devouring traditional federated infrastructure. Very few bare metal servers or storage are deployed today. Almost everything is going in under virtualization and much of it is dedicated to a single enterprise.
- Energy savings are real, and complex. There are a number of themes here - delivering power more efficiently, reducing idle time, raising data center temperature, employing new cooling technologies. Given that the power bill on an "old school" data center in New York can be $2 million per MegaWatt annually, and these technologies can save more than half that cost, this moves the budget needle, and is good for the world. (In a future blog I will delve into how these technologies can substantially increase capacity and extend the life of data centers that are currently tapped out.)
- Data Center reliability is over-rated. As more applications move to the cloud, the ability to deliver these is at least as dependent on the network as it is on the data center. Increasingly, concepts like High Availability, Fault Tolerance, Continuous Availability, and related methodologies depend on data, compute, and network distributed across multiple locations. The delivery systems can survive the loss of one or more locations, so the importance of reliability at locations is reduced. This has breathed new life into a plethora of Tier 2 data centers with N+1 or even N back-up. Many service providers are pushing the data center developers to offer this as a new product to further cut their cost structure.
Over the next days, weeks, and months I will dig deeper into these and other concepts shaping the future of the Data Center Industry.