According to the UK Online Measurement company (UKOM), Internet usage is 'exploding' with users spending 65% more time 'surfing' the Internet than they did 3 years ago. According to the survey carried out by UKOM, users spend an average of 22 hours and 15 minutes online every month. Whilst the survey suggests that the majority of this time is spent on social networking sites, it does have big implications for data centres. Migration Solutions MD, Alex Rabbetts, looks at what these implications are likely to be.
Data centres are at the very heart of the internet. Data centres are the facilities that house the computers that serve everything that the internet is. When we browse to a website, talk on instant messaging, upload our latest holiday photos, or download the latest track from our favourite band, it is almost certainly going to be served from a data centre. The latest figures, if they are to be believed, (and frankly even if they were only half right), mean that the exponential rise in demand for data centre space is going to continue. Facebook, for example, are opening a new 147,000 square foot data centre in Prineville, Oregon. This is just one amongst many data centres that the social networking site needs as its user base grows to more than 350 million people worldwide.
In the UK there has long been a 'drought' of data centre space. It is true that there is always some space available, but at what cost and at what quality? The problem is that there is very little good data centre space around - and that that exists tends to be very expensive. The issue goes way back to the Dot Com boom and, more importantly, bust. In the late 1990s there were literally hundreds of data centres being built around the world. Money was no object as the data centre companies that were springing up almost every day were so overvalued that raising debt was easy. Then came the bust - some argue that MCI Worldcom was the root cause of the problem, but the reality was it was pretty much every internet company that was overvalued. Many of these new operators went bust, while some survived but only with the protection of Chapter 11. There was a glut of data centre space and those companies that survived were desperate to fill the space. Clients of the surviving internet companies were able to secure space at very low cost, sometimes even at prices below cost to the operator. What this resulted in was that internet companies had no money to maintain space and no money to build new. Most internet companies were in 'survival mode' and almost gave away space to secure customers.
Over the last few years, the data centre operators have had very little money to maintain the space that they have and this has resulted in some very tired data centre space. It is true that a few operators have managed to build their businesses and offer high quality data centre space, but these are but a few - Telecity, Equinix, Interxion, Savvis, to name a few. Others though, have just not had the revenues to allow them to maintain high quality data centre space. Today, those operators that have managed to maintain their data centre space to a high quality have very little space available - good quality space gets snapped up and at a premium price too.
The recession has also impacted the availability of data centre space. Before the world fell off a cliff there were numerous projects planned to build new data centre space, but when money became tight, many were shelved or cancelled altogether. The average data centre takes 2 years to get from the planning stage to opening its doors to customers - the knock-on effect of the recession will be felt for some years yet with the shortage of good quality data centre space worsening before it gets better.
If the UKOM survey results are a true reflection of the rise in internet use, the shortage of good quality data centre space is going to continue for some time. Take this, coupled with the Digital Britain Report published by the Government last year, and the continuing rise in regulation that is forcing businesses to store more and more data, and it is clear that the demand for data centre space is going to continue for the foreseeable future. Whilst some, poorer quality data centre space will remain available, why would anyone want to place their data in a sub-standard facility? Good quality space will always be in demand, the question is how will the data centre landscape change over the next few years? The probability is that the good operators will continue to grow, quality space will be offered at a premium, but the poorer quality space is likely to fall by the wayside. The data centre landscape is likely to change once again over the next few years. Interesting times are ahead!