What Drives Data Center Decisions?


Rakesh Sharma, Contributor

February 18, 2014

Data is the new gold. And, data centers are the new gold mines.

“The future is in infrastructure,” says Raof Abdel, regional operating chief at Equinix, a data center company. “We are almost migrating back to the mainframe model.”

There has been a flurry of news about data centers in recent times. While Apple has plans to build a $2.7 billion data center in Eemshaven, a town near Netherlands, Google and Microsoft have already built or started construction on data center in the same town. Similarly, Twitter announced plans for a massive data center expansion last year.

The mainframe model Abdel is referring to has large servers or data repositories connected to terminals with keyboards. It was used by large corporations to crunch data and maintain records. The model was replaced by the client/server architecture with several nodes or servers in a network connected to multiple clients. Because they follow a similar monolithic architecture paradigm, modern data centers resemble the mainframe model.

The move towards data centers also makes financial sense for infrastructure companies. Otherwise ailing corporations, such as Cisco and Dell, have seen healthy growth in their data center companies.

Why Own A Data Center?

So, what drives consumer technology companies, such as Google and Facebook, to own a data center?

According to Abdel, there are several reasons for Google and Facebook to make their own data center rather than rent space from a player like Equinix.

Security is one. The transaction in a freemium business model is simple: consumers exchange personal information or data for services. This data is personal data and, as such, must be highly secured. By maintaining control of their data centers, large corporations can ensure security of their most critical asset.

Having a company-owned data center also enables organizations to scale their infrastructure based on consumer demand. This can be especially critical for established organizations during tests for new products, when consumer demand can rise or fall with experimentation on the service to meet customer demand.

The final benefit of owning a data center is about the physical separation between data centers and the company’s software. This means that, instead of depending on outside providers such as Amazon Web Services, Google is able to maintain and operate its own servers.

Factors That Affect The Location Of A Data Center

Surprisingly, the decision to locate a data center is not dependent on technology. Instead, the decision is a mix of finances, weather conditions, and network availability. For example, extreme temperatures, whether heat or cold, can damage equipment inside a data center. Instead, Abdel says data center companies can leverage outside temperatures to cool their infrastructure.  In this context, it is important to note that data centers operated by most technology companies are located in states with temperate weather conditions such as Oregon or North Carolina. Eemshaven, which is located close to Netherlands, has similar temperate weather conditions that can be leveraged by data center companies to cool their infrastructure.  In addition, Netherlands is a leader in generation of renewable energy, a fact that dovetails with Apple’s ambitions to only use renewable energy to power its data centers.

The second factor that affects the choice of data center operations is availability and speed of network providers to connect to their clients. In some cases, multinational corporations prefer to put a network hub at multitenant locations such as Equinix because this provides them with “the best of both worlds,” according to Abdel.

Connection to network hubs, such as Equinix, provides them access to other customers besides their own customers. This is because Equinix has multiple clients, ranging from small businesses to large companies, which use its services. In addition, Abdel says their connections are more secure than general Internet connections.

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