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The credit crunch has only added to the economic pressures facing data centre managers. Luckily, there are a wide range of alternative approaches

In early 2008, data centre managers would hardly have believed that the intense pressure they were already under was about to get a lot worse.

At the time, a new-found environmental concern among businesses was forcing them to reduce the energy footprint of their facilities, while the explosive growth in user appetite for applications, storage and connectivity was showing no signs of abating.

Back then, it was up to IT professionals in charge of data centres to reconcile these conflicting drivers just as energy prices were beginning to escalate and the available data centre real estate, at least within a reasonable distance of London, was shrinking to a sliver.

By the end of the year, however, the incipient migraines of the country’s data centre managers had another significant pressure point to contend with: the impact of the credit crunch on their budgets.

This can only have intensified what was in June 2008, when Information Age hosted a round-table debate on issues surrounding data centre management, a sense of exasperation.

The IT directors and managers in attendance reported that their facilities were bursting at the seams. “An oversubscribed data centre is the norm,” said the IT director of a large business services company. His thoughts are corroborated by a report conducted by Hewlett-Packard in December 2008 which found that the average data centre is running at 82% of its maximum capacity.

Back in June, the answer to this problem was apparent, at least to businesses in the US – buy more data centres – or rent space. A survey by the Digital Realty Trust found that 86% of US organisations were planning data centre expansions in 2008 to 2009, increasing the average data centre size by 50% to 15,000 square feet.

The budgetary impact of the credit crunch is just one more reason, however, that the strategy of data centre expansion is difficult for UK organisations to pull off.

For one thing, the availability of power in the London area is becoming scarce. The capital’s power infrastructure is already being tested, and the coming 2012 Olympics are only going to put further strain upon it.

Some believe this problem is being overstated. “There is a huge problem securing power [in London], but it can be done,” said Greg McCulloch, UK managing director of data centre hosting provider Interxion, at Information Age’s Future of the Data Centre 08 conference in June 2008 “No one has ever said ‘there is no power left’.”
Nevertheless, the simple equation of supply and demand means that even if London power is attainable, the price is heading in one direction only.

That price uptick, exaggerated by movements in the energy utilities industry, coincided with a surge in Green sympathy to put intense pressure on data centre managers to contain the amount of electricity consumed. Unfortunately, organisational realities have often concealed the true power footprint of the data centre from IT.

“Only when I was put in charge of the facilities department did I get to see the utility bills of the data centre,” said the CIO of a technology consultancy at the Information Age round table. “Only then did I understand the scale of the problem.”

One of the only strategies offering any relief from this combined assault on data centre resources is server virtualisation, as adopted by 56% of respondents to the Effective IT Survey 2009. By allowing organisations to derive more functionality from their existing infrastructure, virtualisation promises to redefine the economics of power, cost and space in the data centre.

But even that is only a temporary reprieve, according to the data centre manager of a City law firm speaking at the round table. “Server virtualisation is probably going to save my bacon for a while but not forever,” he said.

Virtualisation may buy some time, therefore, but it is still essential that UK companies consider data centre strategies beyond expanding their own facilities.

Data centre alternatives

The most immediate solution is to outsource data centre provision. Third-party providers can exploit economies of scale and leverage their relationships with utilities companies to cut the cost of running data centre infrastructure.

Interxion’s McCulloch argues, however, that the principle advantage of data centre outsourcing is improved uptime and availability. At the Future of the Data Centre 08 conference, he expressed surprise at the finding of an IDC survey that suggested cost-cutting was the principle driver for data centre outsourcing.

“I would have thought that protecting uptime and resilience would have been the top priority for co-location customers,” he says. “I think that is far and away the most important factor; businesses simply can’t afford to have their systems go down.”
But that attitude neglects the circumstances that lead businesses to outsource. Most believe themselves to be capable of running their own operations; it is the bill at the end of each month that causes the headaches.

Speaking to Information Age in April 2008, Ann Livermore, who heads HP’s Technology Services Group, predicted that for many organisations the complexity of managing and upgrading data centres may lead to an altogether more radical form of outsourcing: cloud computing.

“One of the things we have seen is that many companies don’t want to take the time or make the effort to build the next generation data centre for themselves,” she said. “What they would really love to be able to do is almost the equivalent of plugging into the wall and having the service delivered to them.”

At least some of the data centre capacity currently operated on a proprietary basis will in the coming 12 months move to the facilities of the likes Microsoft, Amazon.com and Google as businesses make greater use of available cloud computing services.

It must be noted that Livermore anticipated growing demand for HP’s server products and virtualisation tools; there will always be organisations that wish to run their own data centres. However, the squeeze on resources is bound to result in the movement of the IT workload across organisational boundaries.

A world of difference

Data centre workload will also cross geographical boundaries, according to businesses and development agencies hoping to promote novel data centre locations.

At the Future of the Data Centre 08 conference, Thordur Hilmarsson, managing director of Invest in Iceland, made the case for the country as an ideal location for data centre builds. The key selling point then was the country’s low carbon footprint – 100% of its energy is provided by a mixture of hydroelectric and geothermal power plants. Plus, the cold climate also helps to cut cooling costs.

In October 2008, Iceland’s economy all but collapsed. One week saw many of the country’s banks nationalised and the Icelandic krona plummet in value. That arguably makes the island an even better location for data centre investments, as resources will be cheap for foreign businesses.

Closer to home, Scotland is vying to become a data centre location of choice, thanks also to its cold climate and the availability of hydroelectric power. Three major data centre building projects were announced at the tail-end of 2008, including one proposed build in the Lockerbie area that, if completed according to plan, will be the largest data centre in the world at three million square feet.

These directives reveal that the investment is available to build a more geographically diverse data centre ecosystem. But the success of this ecosystem depends on the willingness of large IT organisations to place data centre resources in locations that are a plane ride away from their headquarters, something they have traditionally been reluctant to do. However, competition for resources in the South East is reaching boiling point and that is forcing companies to look further afield.

In the shadow of the credit crunch, data centre initiatives such as new builds that require significant capital expenditure are unlikely to get the go ahead. Data centre managers will be instead expected to make the most of existing investments.

Conversely, subscription-based data centre outsourcing will be an attractive option for many as the recession bites. But it is up to the providers to help ease the prohibitive cost of data centre migration.