February 14, 2013

As data centers continue to juggle tighter budgets, many are taking on more risk than ever before, according to a new report.

Data centers have traditionally been risk-averse. “When times were good, money was no object and we were extremely risk averse. If we needed to have two of everything, we had two of everything. We’re now more willing to accept risk than we ever have been,” one source said in a report by DCD Intelligence, the research arm of DatacenterDynamics.

Rather than building out new facilities, many data center operators are consolidating existing facilities and considering alternatives to building new ‘owned’ data centers, the report found. Economics are even forcing some to consider, possibility for the first time ever, reducing the amount of available data center capacity.

Data Center Spending Is Simply Unsustainable. Faced with tough economic conditions, data centers operators have also moved away from building highly resilient bulletproof Tier 4 facilities across the entire data center footprint.

Now, even where a high degree of resilience is warranted, a Tier 3 facility is being looked on as sufficient to save on the significant cost of building a Tier 4 facility, DCD Intelligence said.

In fact, it can be more effective to spend less money on highly redundant data centers and build more Tier 2 facilities, while also paying more attention to the application level, according to sources interviewed by the research firm. “There is a trend towards building-in resilience at the application layer though - as most large organizations operate hundreds or thousands of applications - it be difficult to predict how they interact with each other. Application resiliency is still in its early stages,” DCD Intelligence managing director Nicola Hayes noted. Still, Hayes says the new research does not mean that data center operators are now taking undue risk, but rather are adjusting their approach to risk.

“Indeed it would appear that for the past decade companies have been overestimating risk-based concerns since when money was readily available this was the more cautious approach,” she said.

For many data center operators, budgetary constraints have shot up to the top of their list of concerns for the first time. Traditionally, budgets were very much a secondary consideration to resilience.

“Since the global financial crisis, cost and budget have become new industry watchwords and particularly in the context of international data center strategy these factors are becoming increasingly important,” Hayes said. “A wide range of factors are taken into consideration when crafting a strategy, yet according to our sources cost has traditionally resided towards the bottom of a long list of considerations.”

ABOUT THE AUTHOR
Melanie Rodier has worked as a print and broadcast journalist for over 10 years, covering business and finance, general news, and film trade news. Prior to joining Wall Street & Technology in ...