Executive Roundtable: The State of the Hyperscale Data Center

JAMES LEACH, RagingWire Data Centers

James Leach: I can’t imagine ever describing a hyperscaler as being “less active” in anything! They are actively deploying massive amounts of compute, storage, and network around the world. They are promoting, expanding, and developing renewable energy options for data centers. They are driving new efficiencies in data center designs and operations.

What we’re seeing from the hyperscalers is more effective capacity planning, a desire for more precise delivery windows, and a need for onsite deployment services and project management – all of which we are delivering. With the roll-out of new subsea cables and dark fiber, look for the hyperscalers to expand network capacity, management, scalability, and resiliency to compliment the advances they are making in their compute and storage platforms.

RICK CRUTCHLEY of Iron Mountain.

Rick Crutchley: We’re still seeing steady demand. Hyperscalers continue to get aggressive on pricing with numerous suitors willing to play, driving historic lows for $/kw. Sustainability is a focus of most hyperscale deals, as these organizations continue to use their buying power to create data center scenarios that are good for the business, customers, and the environment.

Design requirements/preferences continue to be unique to the individual hyperscale company in question, offering a build challenge for colocation providers, as designing to one hyperscale prospect can potentially eliminate them from consideration for other opportunities – or add significant costs in order to adjust. Size range: 5 MW to 40 MW.

PHILLIP MARANGELLA, EdgeConneX

Phillip Marangella: I think it depends on the market, the customer and the deployment type. A few major markets are probably seeing some absorption of capacity, while many other markets, particularly internationally, are still seeing very strong demand and growth.

However, no matter the provider or the location, the one thing that I think is consistent for all providers is their desire to extend their footprints to more markets in order to have their services available in closer proximity to their customers and end users. And, while the requirements for cloud continue to evolve as it matures, and as adoption and usage accelerate, the equally rapid rise of interdependent technologies like IoT, machine learning and AI, gaming and others are also impacting demand for data center capacity around the world. The net-net is that there is and will remain strong global demand for hyperscale data center capacity across core, edge and hyperlocal markets and everything in between.

JEFF KLAUS, General Manager of Intel Data Center Management Solutions

Jeff Klaus: Hyperscalers have continued their strong growth, it may have changed location but it’s still going strong. For example taken from Data Center Frontier:

Data center operators in Northern Virginia leased 270 megawatts of capacity in 2018, more than doubling the previous record for annual absorption, according to data from Jones Lang LaSalle, which said the region accounted for 55 percent of all data center leasing nationally.

I think prices have started to make people look for quality opportunities but things are still moving. For example:

Digital Realty… has purchased a 13-acre property on Filigree Court in Ashburn from Airbus Americas for $28 million, according to the Washington Business Journal, citing local property records. The purchase price works out to $2.14 million per acre, the highest price yet for a data center development property in Loudoun County.

DAVID RICHARDS, Chatsworth Products Inc. (CPI)

David Richards: In general, the size of builds is increasing. It is important to remember that each generation of compute provides a significant increase in compute capacity and better overall hardware utilization. So, the amount of hardware per compute capacity is shifting. Hyperscale will continue to grow and to lease colo space, but the compute capacity in each rack is also increasing.

Additionally, the emergence of 5G and increased demands for mobile computing have created a need to observe and create the next natural evolution of data center design, layout and operations. Once this evolution pans out, I believe hyperscale will be in position to confidently continue to multiply to support the increased wave of data flow and storage needs that comes along with it.

RANDY ROWLAND, President of Data Center Services at Cyxtera

Randy Rowland: As an enterprise retail colocation provider, Cyxtera is not in the hyperscale or wholesale business so we’re not able to speak to the prognosis for hyperscale deals. We are seeing a trend in which hyperscalers are building out larger volume capacity sites. Enterprise customers and large systems integrators need to factor in the added cost of the build out and management of power, cooling, and operations if they’re seriously considering hyperscalers as a potential retail colocation alternative.

We’re also seeing that the presence of a hyperscaler in a metro region drives enterprise retail colocation demand in that same market. In fact, we partner with many of the hyperscalers to address this enterprise demand. Our customers are mid-to-large enterprises, more than half of which operate in multiple locations, many on a global scale. They operate hybrid IT environments in our data centers that need low-latency on-ramps to their cloud provider of choice.

We continue to strategically invest in and grow our global footprint in response to customer demand in these markets, with turnkey sites offering a diverse range of interconnection options to cloud providers. This is evidenced by our recently announced expansions in eight key markets across North America and Europe, including new data center openings in Phoenix and Frankfurt and expanded capacity in New York Metro, Silicon Valley and London.

NEXT: Where are the opportunities in edge computing?

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