December 8 marked the West Coast version of the Datacenter Transformation Summit (a similar event was held earlier for the East Coast) from Tier1, the premier co-location research company. It was a fact filled day, with an audience populated by competitors in the seemingly crowded co-location space. The panels and speakers were knowledgeable and forthcoming. I found that the most indepth presentation that was educational was delivered by Mark Waddington of Quality Technology Services. The company has offices across North America in several cities. These notes are excerpted from his talk:
Enterprise deal transactions for co-location are typically .5MW to 3 MW, for 5000 - 25,000 square feet with a planning range of 6 - 18 months before they go live in a co-location site. The contract will most likely be written for 5 - 10 years and in most cases, these co-location sites are over 100 miles away from corporate offices. Enterprises want flexibility in growth within the same location, customized security and power designs, and a graduated installation phase of 12 - 18 months. Green initiatives are always part of the conversation, "constantly being asked for", he said.
These enterprise customers are asking for additional services such as asset management, change control process maintenance practices, accessibility to chilled water at the rack level, and "remote" hands so that much of the routine work can be done by co-location staff.
In contrast small customers are asking for cabinets or cages ranging in size of 100' to 1000 square feet for 2-3 year contracts, and these are frequently less than 100 miles from corporate headquarters. These smaller customers are asking for online self-service portals to update their requirements, contraction and expansion options as the economy changes, individual Service Level Agreements and support for Customer Audits. This group defines managed services as power, space and a core set of services that may include monitoring storage, network management, archival services, and operating system support.
Mark said that his strongest growth in 2009 was his small to medium-size customers who fit 2-3 cabinets in 100 square feet. if he did not provide those managed services described in the paragraph ablve, he would lose customers. Approximately 20% of his customers are in either his New York or California locations, with the remaining 60% in his Atlanta facilities.
Dan Golding, an analyst with Tier1 said that assuming a 2-4 year recover in this economic recession, the key trends he sees are:
- there are too few datacenters in the pipelines and utilization is climbing
- power density demand has stabilized
- containers will not affect the market
- clouds will keep co-los growing
- and increased physical security will be built into new sites because big data centers are easy targets.
With regard to item 1, end users can expect a 7 - 10% increase in key markets beginning Q4 of 2010 as more companies look for space as they grow. This sector had 22% annualized revenue growth this year.
Small and more recently opened colocation operators learned a lot from the transparency of their peers at this event. The tone was very congenial - there must be a lot of turnover among employees between companies that encourages this kind of sharing, or is collaboration becoming the norm? Have a green day!