The Data Center industry is buoyant. We can read reports, analysis and articles every day to prove that this real estate asset, linked to the technological world, is going through a blooming stage in terms of demand, investment, and growth.
It is curious that Covid-19 pandemic, which has so severely harmed other sectors, has been like tailwind in the case of Data Centers, putting in display their fundamental role in society, as they are the infrastructure that has enabled professional and educational remote activity to function correctly.
The reasons for the expansion of the data centre industry
There are other elements which explain the progression of a sector that already grew in two-digit figures yearly, being the most important the migration of IT services to the cloud, fostered by the Cloud Service Providers.
Source: Statista
These technological giants, also known as hyperscalers, have been expanding their cloud infrastructure to endure the vertiginous migration rate. Therefore, they have deployed new availability zones (AZ) in multiple countries, to offer a better service level to local clients (service portfolio, availability, and latency).
Many times, the Data Center housing these services are property of the Cloud Service Providers, but most of them are hired to specialized Data Center providers, under a model of leasing or Colocation. In this sense, it is important to highlight that not every Data Center can fulfill the needs of hyperscalers, whose selection processes are especially thorough.
Expectations of a hyperscale data centre
Next, we will see which are the main demands from hyperscalers towards Colocation services, and the differences between them and a traditional retail client:
- As their name shows, deployments are in big scales, with initial demands between 1 and 5 MW.
- As relevant as the deployment of the initial MW, Data Centers must have the scalability to comply with the hyperscalers’ growth needs in the region. This is one of the most delicate matters when negotiating, as the aim to have both Power supply and space booked for the future, but without any payment until it is used. Fortunately, there are existing contractual figures like ROFO (Right of First Offer), which guarantee priority.
- High Power density, above 6 Kw/rack in most cases, and with growing tendency.
- Aggressive delivery deadlines, to be active before their competitors.
- 100% availability service, with hard penalties for not complying, which makes the Colocation provider to assure a high failure resistant infrastructure (Tier III standard).
- Connectivity is also a key element. Hyperscalers need to be in a Carrier Neutral environment with diversity of fiber routes and carriers connected to the Data Center.
- Demand towards energy efficiency to reduce PUE (Power Usage Effectiveness) and minimizing electrical consumption, with absolute preference for green energy sources.
- Flexibility to adapt to special requirements.
Only those Colocation providers able to answer satisfactorily to these demands will have a chance to host a hyperscaler.
Juan Bezón, Strategy & Value Proposition – Nabiax