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Data Centers Hitting a Wall of Cloud Computing

Equinix lowers guidance due to higher than expected churn in its data centers and price erosion on higher end customers

Equinix lowers guidance due to higher than expected churn in its data centers and price erosion on higher end customers.  Microsoft continues to promote hosted solutions and cloud computing.  Companies from Lee Technologies, CirraScale, Dell, HP, and SGI are producing containerized data centers to improve efficiency, cost, and manageability of high density server deployments.

The data center is facing a challenge.  The idea of a raised floor, cabinet-based data center is rapidly giving way to virtualization and highly expandable, easy to maintain, container farms.

The impact of cloud computing will be felt across every part of life, not least the data center which faces a degree of automation not yet seen.”

Microsoft CEO Steve Ballmer believes “the transition to the cloud <is> fundamentally changing the nature of data center deployment.” (Data Center Dynamics)

As companies such as Allied Fiber continue to develop visions of high density utility fiber ringing North America, with the added potential of dropping containerized cloud computing infrastructure along fiber routes and power distribution centers, AND the final interconnection of 4G/LTE/XYZ towers and metro cable along the main routes,the potential of creating a true 4th public utility of broadband with processing/storage capacity becomes clear.

Clouds Come of Age

Data center operators such as Equinix have traditionally provided a great product and service for companies wishing to either outsource their web-facing products into a facility with a variety of internet Service Providers or internet Exchange Points providing high performance network access, or eliminate the need for internal data center deployments through outsourcing IT infrastructure into a well-managed, secure, and reliable site.

However the industry is changing.  Companies, in particular startup companies. are finding there is no technical or business reason to manage their own servers or infrastructure, and that nearly all applications are becoming available on cloud-based SaaS (Software as a Service) hosted applications.

Whether you are developing your own virtual data center within a PaaS environment, or simply using Google Apps, Microsoft Hosted Office Applications, or other SaaS, the need to own and operate servers is beginning to make little sense.  Cloud service providers offer higher performance, flexible on-demand capacity, security, user management, and all the other features we have come to appreciate in the rapidly maturing cloud environment.

With containers providing a flexible physical apparatus to easily expand and distribute cloud infrastructure, as a combined broadband/compute utility, even cloud service providers are finding this a strong alternative to placing their systems within a traditional data center.

With the model of “flowing” cloud infrastructure along the fiber route to meet proximity, disaster recovery, or archival requirements, the container model will become a major threat to the data center industry.

What is the Data Center to Do?


“A data center should be like a container – that you can put under a roof or a cover to stop it getting wet. Put in a slab of concrete, plumb in a little garden hose to keep it cool, yes a garden hose – it is environmentally friendly, connect to the network and power it up. Think of all the time that takes out of the installation.”

Data center operators need to rethink their concept of the computer room.  Building a 150 Megawatt, 2 million square foot facility may not be the best way to approach computing in the future.

Green, low powered, efficient, highly virtualized utility compute capacity makes sense, and will continue to make more sense as cloud computing and dedicated containers continue to evolve.  Containers supporting virtualization and cloud computing can certainly be secured, hardened, moved, replaced, and refreshed with much less effort than the “uber-data center.”

It makes sense, will continue to make even more sense, and if I were to make a prediction, will dominate the data delivery industry within 5~10 years.  If I were the CEO of a large data center company, I would be doing a lot of homework, with a very high sense of urgency, to get a complete understanding of cloud computing and industry dynamics.

Focus less on selling individual cabinets and electricity, and direct my attention to better understanding cloud computing and the 4th Utility of broadband/compute capacity.  I wouldn’t turn out the lights in my carrier hotel or data center quite yet, but this industry will be different in 5 years than it is today.

Given the recent stock volatility in the data center industry, it appears investors are also becoming concerned.

Read the original blog entry...

More Stories By John Savageau

John Savageau is a life long telecom and Internet geek, with a deep interest in the environment and all things green. Whether drilling into the technology of human communications, cloud computing, or describing a blue whale off Catalina Island, Savageau will try to present complex ideas in terms that are easily appreciated and understood.

Savageau is currently focusing efforts on data center consolidation strategies, enterprise architectures, and cloud computing migration planning in developing countries, including Azerbaijan, The Philippines, Palestine, Indonesia, Moldova, Egypt, and Vietnam.

John Savageau is President of Pacific-Tier Communications dividing time between Honolulu and Burbank, California.

A former career US Air Force officer, Savageau graduated with a Master of Science degree in Operations Management from the University of Arkansas and also received Bachelor of Arts degrees in Asian Studies and Information Systems Management from the University of Maryland.

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