December 16, 2010 9:34 pm

IT casts a cool eye over data storage

Just a couple of kilometres off the M25 motorway stands an old warehouse designed as a cold storage facility for one of the country’s biggest grocers.

Trucks can still back up to the warehouse – the exterior of the facility remains unchanged – but today the space is not filled with frozen peas and dairy products, but with 960 servers housing the data of an anonymous western bank and its clients.

While the site is a far cry from the Docklands, Britain’s data centre hub for the past 20 years, it may soon be the IT industry’s new norm for housing data as people spend more time online and internet providers find they have less storage space.

It is a reversal from 10 years ago, when data centre providers were renting out their facilities as warehouses to stave off bankruptcy.

“The market for data centres is ever increasing,” says Akber Jaffer, general manager at Colt Data Centre Services. “People are running out of space and more importantly they’re running out of power. Many of the data centres that were built 10 or 15 years ago now require some kind of refresh.”

The frozen food facility turned data centre belongs to Colt, which manufactures modular data centres, an easy-to-assemble version of the traditional model.

Most data centres, such as those found in the Docklands, are housed in “carrier hotels” or mid-rise office buildings whose floors are filled with aisles of floor-to-ceiling lockers housing servers of various companies.

In contrast, Colt’s model would be more like a trailer park. Inside the former cold storage plant sit several human-sized containers that can be joined together or stacked on top of each other. Companies can buy as many of the containers as they need and elect to store them at their own sites or at Colt plants.

The beauty, Mr Jaffer says, is that the containers can be manufactured and then reassembled on site, cutting down the time it takes to build a data centre from 18 months to four.

“When the car was originally built it was very much a handcrafted product. And then Ford and Mercedes came along and essentially tried to put it on a factory line,” Mr Jaffer says. “That’s what we’re trying to do with the data centre.”

The movement is testament to the rise of the data centre importance since the dotcom bust, when 17 of the 27 pan-European data centre providers declared bankruptcy.

The companies that survived have seen their market capitalisation surge.

“Data centres have become quite sexy in the past year or two but historically they’ve been referred to as the garbage cans of the IT industry,” says Steve Wallage, a managing director at the Broadgroup consultancy.

Telecity, one of Europe’s biggest data centre providers, has gone from being valued at £4m to more than £900m, while the market capitalisation of Equinix, its bigger US peer, has risen to almost $4bn (£2.6bn).

The data centre providers have benefited from the rise in companies outsourcing.

Today a fifth of data centres are found on sites run by third-party providers such as Telecity. Analysts say their share of the business is set to increase.

The question is whether these operators will continue to prevail or whether some of their business will start going to purveyors of the ready-built model such as Colt.

Areas such as the Docklands are still highly coveted for the proximity they offer clients to a hundred global telecom providers. But chief information officers are increasingly asking whether such a high price needs to be placed on servers’ location.

Siting data centres in highly connected areas reduces the time it takes for internet requests to be sent, making them vital for clients such as electronic traders.

Content providers, such as the BBC’s iPlayer, also need high connectivity so that viewers’ videos are not interrupted midstream.

Yet for every server that is dependent on shaving another few microseconds off a request time, there are others, such as ones used for back-up, that are less time sensitive.

Data centres 200 miles from London still get high levels of speed if they are close to a city, while places such as Glasgow, Newport and Cardiff are shaping up as future hubs even though only a couple of dozen telecoms operators are located there, says Mr Wallage of Broadgroup.

Mike Tobin, chief executive of Telecity, laughs off the notion that its clients might begin switching to Colt’s container model or stage an exodus to the north of England.

“We could easily build data centres in the countryside ... but there’s low connectivity,” he says.

“The art is building them in the city centre where there’s connectivity right outside your front door. Getting 40 homes-worth of power at one address is difficult.”

But even Mr Tobin acknowledges that modular structures could be handy for one thing: big, one-off events such as the 2012 Olympics.

As Mr Wallage says, while early versions of the modular data centre “were quite crude”, the industry increasingly seems to be moving towards a model of “one-size-fits-all for servers ... or three or four standard sizes fit all”.

“It is the future trend for most data centres,” he says.

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