Digital Realty purchases another Atlanta Data Center

The Atlanta Business Chronicle is reporting that wholesale data center giant Digital Realty (DLR) has completed the purchase of “a 334,000-square-foot data center near Hartsfield-Jackson Atlanta International Airport in a $63 million sale leaseback transaction…”

DLR and the Atlanta Business Chronicle were careful not to release too many specifics about the data center.  However, if you have worked in the Atlanta data center market for any length of time you know they are probably talking about the Delta Airlines Data Center on Doug Davis Drive down in Hapeville.

According to the Business Chronicle, the seller was a ““major airline” that will continue to use 167,000 square feet of space in the building. The rest the data center facility is leased to a “leading provider of critical transaction processing solutions to companies operating in the global travel industry.””

If the acquired data center is the Delta Airlines data center, that leading provider of “critical transaction processing solutions” would be Travelport.  Delta and Travelport have shared the Hapeville data center for some time.

This acquisition should be good news for everyone involved.  Digital Realty is a top tier data center firm that intimately understands the role of data centers in the success of a business venture.  Their expertise and experience should ensure that the Delta data center is efficiently and expertly operated.  In addition, the sale of the building should provide Delta with a fresh injection of capital for technology upgrades.

This acquisition is the 3rd Atlanta data center owned by Digital Realty.  The others being:

  • 375 Riverside Dr, Atlanta
  • 101 Aquila Way, Atlanta

Digital Realty’s portfolio of properties includes nearly 100 data centers in North America and 12 more in Europe and Asia.  Their construction practice has built “over $2.5 billion in data center facilities for companies ranging in size from small collocation firms to Fortune 500 corporations.”

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4 ½ Data Center Industry Predictions for 2012

2011 is finally gone and 2012 is off to a roaring start.  Here in the blogosphere the bloggers and pundits are busily making predictions about what the New Year has in store for the data center industry.  I’m as guilty as the next guy when it comes to the urge to prognosticate. And, I have a few predictions that I’m not seeing anywhere else.  In no particular order, here we go…

1.         Another Bad Year for Natural Disasters

2011 was a terrible year for natural disasters.  No region of the US was spared this year as wildfires torched the west, floods ravaged the mid-west, tornadoes devastated the south and blizzards paralyzed the North.  According to the NOAA, the US set a new record with 12 weather/climate related disasters that caused greater than $1B in damage.  Total damage from these 12 events approached $52 billion and resulted in the tragic loss of 646 lives. The previous record for billion-dollar weather/climate disasters in one year was 9, set in 2008.

Unfortunately, I’m predicting that 2012 will be just as bad.  Here are a few of my reasons:

  • The graph above indicates (to my untrained eye) a general upward trend.  Call it climate change, global warming, the Mayan end of days or the wrath of vengeful creator.  I care not.  The undeniable fact is; the planet is getting a bit pissy these days. 
  • 15 named storms are predicted to form in the Atlantic during the 2012 hurricane season (Colorado State University).  If 2011 hurricanes Lee and Irene are indicative of 2010 storms, we could be in a wet and windy hurt locker in 2012.
  • NCEP Climate Forecast System (CFS) models predict La Nina to redevelop during the fall of 2012.  This weather pattern has historically resulted in severe Pacific weather patterns and droughts in the central part of the US.
  • Solar scientists are predicting that the sun will reach a period of maximum sun spot and solar flare activity in 2012 solar maximum.  This could lead to geomagnetic storms and power failures.

Climate and weather disasters are clearly bad news for our economy, the general population and for data centers that haven’t spent enough on their electrical and mechanical resiliency.  The utilities that we all depend will be less reliable and fuel costs could soar. 

However, well prepared colocation providers and data center constructors should see steady work as companies with funded DR plans and critical infrastructure seek shelter from the storms.  Which, in turn, should help lead to…    

2.         Another big year for data center construction

2011 was a good year for the data center design and build industry.  Some of the “pent up demand” that we all talked about in 2010 finally let loose.  Data centers started popping all over the place.  Wholesale data center providers such as Digital Realty and Dupont-Fabros ramped up production and colocation providers expanded their capacity as quickly as possible.  Despite the boom in data center construction, demand outstripped supply in most markets throughout 2011.  (As I pointed out here.)

I’m predicting 2012 will be even better.  (Hopefully, wildly better!)  Cloud and virtualization technologies will continue to mature and make the “server closet” a concept of the past. Startups and SMBs will continue to turn to the waiting arms of cloud/colocation providers rather than spend their limited time and resources managing and building their own stacks of silicon.

In the consumer marketplace, data hogging services such as voice recognition, digital publishing, social media photo sharing, online gaming and music from the cloud will continue to be in high demand.  This demand in particular will result in many more of the “industrial size” data centers we saw built by Internet titans like Amazon, Google and facebook in 2011.

Data center construction will be good here in the States.  However, our growth will be dwarfed by activity emerging markets.  As Christian Belady points out in this graph, the global data center market will grow vastly faster than the US and European markets.  Look for activity in China to skyrocket.

 

3.         Increase in cyber attacks on critical infrastructure

Cyber attacks on infrastructure of national significance will be a major concern.  The Stuxnet worm demonstrated that a hacker could cause catastrophic physical damage to critical infrastructure from the comfort of his desk and with complete anonymity.  Unfortunately, the technology that enabled Stuxnet has started to proliferate and new malware has already been found that exploits similar vulnerabilities. 

Cyber criminals and other bad actors have started turning their attention toward the possibilities for mischief in the rich and untapped fields of Industrial Control Systems (ICS).  Cyber weapons have that exploit weaknesses in the ICSs that manage vital systems such our power grids, water supplies and chemical plants will proliferate and increase in potency.

Fortunately, I predict that the US power grid will remain safe.  Our water supply needs work but will probably remain secure as well.  However, facilities that utilize ICS-SCADA technology and are not currently implementing security measures may have a serious problem.  If you don’t think that data centers fall into that category, please see my article on the subject.  (Even better, come hear my presentation on the subject at AFCOM Data Center World in March 2012.  Vegas Baby!)    

4.         Data center efficiency efforts will shift from facilities it IT

In the last 10 years, the concepts of energy efficiency and sustainable design have gone from completely inconsequential to completely consuming in the minds of data center professionals.  You can’t pick up a trade magazine or swing a cat in a data center conference without hearing some pitch about green data centers. 

When smart people focus on an issue, smart ideas are generated. When the data center industry started focusing on energy efficiency, astounding and innovative ideas became reality.  As a result, average data center PUE went from near 2.8 in 2000 to near 1.4 in 2011.

A few deeply committed (and deeply funded) data center companies have started hitting average PUEs around 1.14.  I predict that these amazing efficiencies are close to the end of the path for data center electrical and mechanical energy efficiency.  It may be possible to shave a few more hundredths off but the cost of getting there makes it a losing proposition from a business standpoint.    Google senior director of data center construction Joe Kava calls it the asymptotic range, the “point where it (PUE) is flattening out” meaning the gains are becoming smaller and smaller.

In order to continue to drive additional efficiency into data center operations, data center energy efficiency programs will shift focus from facilities to the IT side of the data center.  End users will demand more efficiency from server and chip manufactures. We will see:

  • Server utilization will become a larger topic. 
  • Data center analytics will enable the identification of underutilized and “Zombie servers”
  • New data center efficiency metrics will be launched that measure the effectiveness of a data center’s server utilization
  • New server architectures based on energy sipping ATOM and ARM chip technology will gain market share
  • Promising advances will be made in the area of Near Threshold Computing (NTC)

4½          Cuba emerges as the Technology hub of the Caribbean, Central and South American markets.

This is my bold, and thoroughly baseless, prediction for 2012.  It’s so bold and baseless that I’m only counting it as half a prediction.  (ala Jeffery Gitomer

This year will see the end of the Castro regime in Cuba.  Capitalism and technology will move in swiftly as soon as Fidel exits stage left.  I expect Equinix and QTS construction in Havana before the end of the year.  Demand for managed/cloud services from the new Cuban casinos, resorts and business will be the spark that will eventually transform Havana into the Silicon Valley of the Caribbean, Central and South American markets. 

There you have it; 4 ½ predictions for 2012.  (I wish I could have come up with a nice round number like 10 or even 5.)  Overall, I am confident that we will continue to see fantastic growth in the data center industry.  I also expect that growth to be fueled by innovative and unexpected feats of engineering and technology.  Now get out there do smart stuff! 

Happy New Year and may you all prosper and find adventure in the days to come!