Office Clients are Opting for Colocation Data Centers

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Office Clients are Opting for Colocation Data Centers

Contributed by Jim Carey
Clancy Relocation & Logistics

Office Clients are Opting for Colocation Data Centers

Data Center Leasing

Jason Bell
VP Technology Services
Jones Lang LaSalle
Jones Lang LaSalle

The dot-com boom that culminated in the year 2000 has been experiencing a re-birth in recent years. Even shortly after the dot-com bubble burst in 2000, investor money poured back into the dot-com industry. Investment in colocation data centers grew as the investment grew in all types of on-line businesses. That was 15 years ago and the growth in data centers just keeps growing.

The forecast is for continued significant growth for the foreseeable future. The availability of colocation data center infrastructure and cloud based services are changing the office space needs of businesses. A large “in-house” data center may now likely move off-site to a multi-tenant data center.

We interviewed Jason Bell, Vice President of Data Center and Technology Services at Jones Lang LaSalle (JLL), and he shared with us what is happening in the data center industry, what some of the trends are from JLL’s perspective and what they expect to see in the future.

CRN: Can you summarize what has been going on in the data center industry lately?

Jason:

From cloud adoption to data sovereignty, the data center industry is experiencing a host of new change drivers, all while it continues to explode with vigorous growth. Bell mentions: “We are seeing complexity in the market with this explosive growth. JLL helps companies simplify the choices in the marketplace for colocation and cloud services.

Bell explains “Security is very important in terms of how clients are adopting the cloud. Today, you are seeing more businesses being vulnerable to cyber security attacks which plays into what type of cloud deployment- private cloud, hybrid cloud or public cloud, best completes each business application.

We also see clients needing to connect to the largest technology cloud providers- Amazon Web Services, Microsoft, Google, IBM Softlayer, and Oracle Could to name a few as part of the client’s cloud strategy to support the client’s needs for agility, scalability and on-demand needs.

CRN: What is data sovereignty?

Jason: Governments are requiring data to be stored in the same country it is accessed. It will lead to some data being stored outside the US for the first time and is a factor in growth outside the US.

CRN: We see on our side the need to move our clients hardware to data centers more often than in the past. We serve many of the same large clients that JLL serves. Can you offer any insight as to why the move to data centers is increasing?

Jason: The reasons are many but here are the big factors:

1. Resiliency:

The resilient infrastructure of a multi-tenant data center can only be replicated for a cost that is prohibitive to most clients. The benefits of a better cooling and power infrastructure are too important to a business’ continuity plan to avoid.

2. Efficiency:

Colocation Providers are using the latest technologies for energy efficiency and power usage effectiveness that results in substantial operation savings to the end client.

3. Agility:

The Colo, Cloud and Managed Infrastructure Service Providers give end clients the flexibility to move workloads on demand between private, hybrid and public cloud topologies based on the tenant’s business drivers.

4. Scalability:

Today’s cloud deployments are being designed for hyper-scale and converged cloud technologies which are increasingly more power dense. Colocation and Cloud Providers are designing today’s data center for this power scale.

5. Cloud Accessibility:

The Enterprise is implementing IT strategies that support cloud accessibility as applications move between private and public clouds based on security, compliance, agility and scale. Therefore, a data center selection that has access and network options to the major cloud ecosystem is becoming the standard.

CRN: What markets are the largest for colocation in the U.S. today?

Jason: Northern Virginia (NOVA) is far and away the largest market right now. In the first 6 months of 2016 the NOVA market consumed 78 megawatts. The San Francisco/Bay area market, by comparison, consumed 57 megawatts in that time. Chicago consumed 32 megawatts and, for reference, New York City, with all of its datacenters, consumed 2-3 megawatts. But geographically speaking there are many markets across the U.S. and more will emerge. We expect significant growth in Tier 2 markets as well as digital content and data projections are soaring. JLL is watching them all closely.

CRN: How is JLL helping its clients with their datacenter needs?

Jason: The idea is to help the client achieve a more optimal IT strategy. We’ll match them up to the right power and cooling requirements, give them the flexibility and scale to move workloads between cloud deployments, as well as consult with them on industry leading service levels. We also provide data to support the selection process with other key factors such as power, labor, construction, telecom networks and hazard (i.e.: earthquakes, tornados and hurricanes).

CRN: What benefits does JLL bring to the client for its data center strategy?

Jason: We study the market and use the knowledge to get the best arrangement for our clients. We have professionals in all the top data center markets who understand what is happening on a local level as well as globally. We provide a comprehensive report of the global market. We capture the market with each provider’s commercial and inventory detail to help advise the right solution and the right service level agreement in alignment with their growth strategy.

The Future:

CRN: What can we expect to see develop in the future for data centers?

Jason: We’ll see continued growth as more and more businesses decide to outsource their current “in-house” operations. We will also see global expansion of data centers with data sovereignty laws making it necessary for a presence in the business’ home country. You will also see the data center industry become more environmentally responsible. The data centers need to be aligned with the sustainability and corporate responsibility programs of its clients. We expect data centers will make more use of renewable energy. This is positive news as power consumption is forecasted to grow significantly.

CRN thanks JLL’s Jason Bell for his insights into the data center industry. Many of CRN’s members are involved in sensitive server relocations around North America. CRN believes these trends are likely to last because of the underlying fundamentals of the cloud. The interconnections between major networks are in data centers. The efficient and reliable power and cooling infrastructure are also there.

The call of clients to relocate to a data center or from one data center to another will remain strong. Ancillary services such as distribution of air handlers, power distribution units, battery replacements or the inevitable end-of-life and lease returns will also continue to fuel the need for CRN members’ services.