In his provocatively titled WebhostingDay 2009 keynote “Infrastructure Hosting in the Credit Crunch – Build or Buy,” Interxion Group managing director Anthony Foy said that companies will gravitate toward the latter, moving key portions of their IT infrastructure out-of-house in the next 24 months.
The credit crisis has apparently been a boon for infrastructure hosts who are able to profit from the growing demand for data center space as capital funds dry up.
This trend is also accelerated by the fact that companies, even in the downturn, are demanding more and more space for their IT infrastructure.
Also, there is a general lack of data center supply in the major European centers such as London, Paris and Frankfurt. Building new centers is simply not affordable for many companies. Foy said that acquiring space to turn into a data center in Europe costs around 60 EUR per square meter. To build out that space, it costs about 10,900 EUR per square meter for a medium-density space – and more for a high-density space. Moreover, there are quite often unpredictable costs while building a data center that do notarise when a company signs onto a colocation agreement.
Foy explained that a major phase of building took place in the late 90′s and early 2000′s. This era was followed by a period of relatively less building, resulting in a deficit of space and a lot of the space is does exist does not comply with the current power and cooling requirements.
Companies dealing with restructuring their IT infrastructure may also be thinking about outsourcing as they consolidate their data centers and servers.
This all factors into the success of facilities like Interxion’s Frankfurt facility that houses 185 independent networks – almost twice the company’s average data center occupancy.
With a data center space shortage looming, the idea of building data centers in locations with surplus electricity has become popular – it’s certainly been a topic of discussion at WebhostingDay. While Foy likes the idea of building data centers in Iceland powered by geothermal energy, he is skeptical about it coming into being. Interestingly, he notes “everyone wants to be in driving distance.”
This phenomenon has been supported by research, and anecdotally at Interxion’s Frankfurt data center, which has roughly 2,000 visits per month.
