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Data Center Design Trends

December 19, 2016

Kelly Morgan, research vice president for services at analyst firm 451 Research, discusses the major trends in data center design, markets to watch and data center technologies that are likely to impact infrastructure decisions in 2017.

Big data remains a hot topic among data center professionals because of the storage, compute power and other demands it can place on the data center. How do you see big data and data analytics adoption trending in 2017? What is driving interest in these technologies?

Kelly Morgan: Adoption will continue to grow, driven by the increase in data available from equipment, products and customers, and the greater availability (and lower cost) of programs and systems to analyze it.

What impact are big data and data analytics having on data centers? With the impact of big data, wearable technology, etc., how are companies preparing for future capacity as it relates to data centers?

Kelly Morgan: So far, in our surveys, the majority of enterprises report that they are storing data and putting data analytics applications into their own enterprise data centers.

We believe that as the Internet of Things takes off, generating large amounts of data, more data processing and storage will need to take place close to the end points where the data is generated. This could boost demand for micro-data centers for storing data rather at the “edge.”

However, there will still need to be some data analysis done centrally, so this should boost demand for space in enterprise facilities or leased network-dense data centers.

What markets do you see taking off for data center providers in 2017?

Kelly Morgan: We expect Northern Virginia, Silicon Valley, Chicago and Dallas to continue to be strong markets, with Toronto taking off this year as well and possibly Montreal.

Which markets do you see stabilizing or losing traction?

Kelly Morgan: We believe Seattle, Boston, Atlanta and possibly Los Angeles will continue to grow relatively slowly and see muted demand for the next couple of years.

As it relates to data center design, what trends are you forecasting for 2017 (i.e., increased focus on sustainability features, more demand for redundancy, flexibility, etc.)?

Kelly Morgan: We see continued interest in varying levels of redundancy within the same building from customers – although this is difficult for operators to provide. We also see growing demand for small builds in “edge” locations, or markets outside of the global top 20.

Do you see enterprises taking more of an in-house, outsource or hybrid approach to IT infrastructure and data center requirements? What is driving these decisions (expertise, costs, type of applications)?

Kelly Morgan: We continue to see enterprises taking a hybrid approach. The majority of enterprises will continue to use IaaS (public cloud) for particular applications, with some smaller firms going all-cloud.

Many larger enterprises will continue to rely on in-house data centers, particularly for legacy equipment and applications, with leased data center space used for particular locations and requirements (e.g. for disaster recovery space).

Some enterprises will combine cloud with hosting and colocation services, particularly those with a relatively small IT staff.

Learn more about how hybrid cloud enables high performance.

About Kelly Morgan: Kelly joined 451 Research in April 2011 as an analyst covering the economics and finances of the data center and hosting industries. In her current role, she leads the services analyst teams, which track hosting, managed services and multi-tenant data center providers worldwide. Coverage includes providers, market size, data center supply and demand, and the dynamics of the industry overall.

Before joining 451 Research, Kelly spent nearly 10 years in private equity, focusing on investments in telecommunications, IT and data centers. Prior to that, she worked for several years at the OECD in Paris, managing the organization's budget process.

She has a BA from Wesleyan University and an MA in International Business and Economics from the Fletcher School at Tufts University.

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