Are Data Centers Commoditized?

We’re almost too good at data centers. The demand for speed to market and lower cost/KW has commoditized MEP system topologies, so the most successful developers must also offer a bevy of services to the user, one member of the design/construction panel said Tuesday at Bisnow’s 3rd Annual Chicago Data Center Boom. (More than 250 of you joined us at Trump, above). But meaningful differences in topography and design flexibility can make a facility stand out, and the key is matching the unique attributes of your client and geographically driven climate, said another. (Ex: Cooling systems differ in Northern and Southern states.) Todd Bateman, CBRE North American agency practice leader for data centers, moderated.

ESD EVP and GM of engineering Mike Kuppinger says financial services and banking drove outsourcing, but now a wider range of companies like law offices and consulting firms are choosing to focus on their core business and build the business case for colocation. Colos’ speed to market and customization have skyrocketed, he says. One of the biggest barriers to growth remains finding the right leaders in IT and facilities management to build the teams that manage the data centers. That’s why enterprise facilities often make more sense for behemoths like Google, Apple, and big banks, which have the internal staff to keep things running.

Now that the top 10 data cities are blanketed with millions of square feet of data centers, Ubiquity Critical Environments COO Sean Farney says pre-engineered modular solutions will be quickly deployed in smaller data centers in Tier 2 and Tier 3 markets. It’s become a bifurcated arena, with service providers able to build huge facilities with bleeding edge MEP systems and enterprise users that don’t need or have the capital to spend. And the edge is where everything is headed. Thanks to our constant need for Netflix, data centers have morphed from monolithic carrier hotels to smaller, more spread out sites, delivering bandwidth and content to close proximity consumers, he adds.

Mortenson Construction senior design phase manager Patrick Davis is seeing data center users learning best practices from the giants (Amazon, eBay, etc.), using prefabricated skids to drive down costs. Though some companies have moved to colocation for their primary data center, they still might keep data in the basement operational as a disaster recovery site, he says. (Watch enough of The Walking Dead and you start to think about these things.) And other firms will stay straight enterprise, where they can control their own destiny. From a labor perspective, all data centers would ideally be located in Lincoln Park where the IT guys live, Patrick jokes. More pics from the event here.