Green outsourced datacentres run by hosting companies may represent an escape route to datacentres facing slow strangulation from rising energy costs, looming energy supply limitations and space running out. That is the cumulative sense of several reports from research houses IDC and Gartner.
Gartner on energy and floor space constraints
Gartner analysts believe datacentres are heading towards a sticking point between a rock, energy costs, and a hard place, floor space constraints. According to them, by 2011, more than 70 percent of US enterprise datacentres will face tangible disruptions related to energy consumption, floor space, and/or costs.
Also, during the next five years, most US enterprise datacentres will spend as much on energy (power and cooling) as they will on hardware infrastructure.
Gartner research VP Rakesh Kumer, bangs his fist on CIO's office doors, saying: "CIOs of large US organisations must prepare for a period of rapid changes in their datacentres. This disruption will be accompanied by a significant increase in capital and operational expenditures. Failure to respond quickly and appropriately to the changing market conditions and technologies will result in needlessly high energy bills, expensive service contracts and delays in implementing new technologies.”
Its not just the US that's going to be affected. Gartner estimates that more than 70 percent of the world’s Global 1000 organisations will have to modify their datacentre facilities significantly during the next five years. The United States has the biggest concentration of large (greater than 50,000 square feet) datacentres, the majority of which were built more than seven years ago.
Here comes the power crunch from Kumar: “These legacy datacentres typically were built to a design specification of about 100 to 150 watts per square foot. Current design needs are about 300 to 400 watts per square foot, and by 2011, this could rise to more than 600 watts per square foot. The implication is that most current datacentres will be unable to host the next generation of high-density equipment, so CIOs will have to refurbish their established sites, build new ones or look for alternatives, such as using a hosting provider.”
The datacentres are going to caught in a three-way trap during the next two or more years, as three main issues come together and cause disruption:
1. Legacy datacentres won’t have sufficient power and cooling requirements for the next generation of high-density server and storage equipment.
2. The volume growth of IT infrastructure will exceed the available datacentre floor space for most organisations.
3. The need to manage upward-spiraling energy costs through optimisation tools and modeling techniques.
From capex to opex
Gartner's conclusion is that during the next three or more years, one of the most-important changes to the US datacentre landscape will be midsize and large users’ increasing propensity to use datacentre hosting services.
Traditionally, the US market has been reluctant to embrace the leasing of space and running IT services from that location. However, during the past nine months, Gartner has detected a shift in attitude that will accelerate during the next few years.
It reckons that the fiscal equation of an expensive capital cost for a new, owned datacentre — as opposed to the much more inexpensive, ongoing operational costs of leased space — will encourage companies to explore the use of hosted space. The perceived issues of lack of control and weaker security with hosting players generally haven’t manifested themselves.
Kumar is all for it: “The net result is that leasing space from a well-designed, modern datacentre hosting provider can yield financial and operational benefits. Currently, the market is supply constrained, resulting in a rapid increase in costs. We expect this hosting market to become very attractive during the next few years, so users should move quickly to secure good prices.”
IDC sings a similar song
IDC analysts have come up with a similar conclusion. However, the research was sponsored by Rackspace, a supplier of outsourced hosting services. You may feel that IDC is dancing to the piper's tune although IDC will strenuously deny this and say it is independent through and through. Nevertheless it is bought research.
In the report entitled Creating Cost and Energy Efficiency Through Outsourcing Hosting Solutions, IDC states that about 50 percent of companies host their websites and ebusiness infrastructure themselves, using their own facilities.
But pressures are rising that will upset this status quo. These include the rising costs of power and cooling, the growing imperative of green IT - not mentioned in the Gartner analysis, and the gradual shift of costs such as power from facilities departments to IT organisations within companies.
The hosting industry is maturing and consolidating and hosting specialists have emerged in the middle market that offer high-quality capabilities and service at realistic prices. IDC concludes that three things will help make green outsourced hosting companies attractive:
1.Save money: Most organisations will see a benefit in terms of capital and operational expenditure and risk management by switching from in-house hosting to a managed hosting service. In all but the most specialised circumstances, IDC recommends evaluating a managed hosting service for at least non-core infrastructure.
2. Support the environment: IDC believes that organisations of all sizes should give consideration, today, to the environmental aspect of their IT operations. Among many actions that companies can take themselves is to use a managed hosting provider with a defined environmental strategy. (Enter Rackspace.) The economies of scale that a hosting provider can exploit, such as sharing infrastructure across customers and reducing power consumption per server, will result in reduced wastage and environmental impact.
3. Deal with IT paying for datacentre energy costs: IDC thinks that concerns over energy security are likely to drive higher energy prices and price volatility, all related to the cost of powering a datacentre. The responsibility of datacentre power expense is increasingly being transferred from facilities departments to the IT manager in order to drive closer integration. In some cases, shifting the responsibility for power costs has consumed an organisation's entire annual IT budget.
This additional pressure will force IT managers to look at alternative operating models, such as outsourcing the hosting operation. In addition, a specialist hosting provider will be able to secure more favourable terms with infrastructure and energy suppliers than most companies can achieve themselves, thereby reducing cost.
In April 2007, Rackspace announced its move to a new datacentre that will run on environmentally friendly energy to help reduce the company's dependency on fossil fuel, as well as provide a more efficient way to manage its customers' needs. Rackspace offers a global carbon neutral hosting programme. This is done through offsetting, about which many people have deep concerns.
Rackspace says it will plant a new tree for every server brought online in the UK. To date over 1,100 trees have been planted in Pembrokeshire. Rackspace also now utilises HP ProLiant DL385 servers featuring Dual-Core AMD Opteron 200 Series processors, which consume less electricity than prior server models.
The company's EMEA MD, Doug Loewe, said: "The hosting market has come a long way in the last few years, with specialist players not only providing a reliable, efficient outsourcing option for web services and e-business infrastructure, but also added environmental benefits."
"Businesses should not be making judgements on whether to outsource based only on old business pressures, but need to consider where they can also make changes in their IT infrastructure to face new challenges, such as green IT."
A Rackspace customer supports this view, as you might well expect. James Garner, an account director at Hearst Digital, said: "At Hearst Digital we have a green committee and take the green initiatives of our suppliers, particularly those in the technology space very seriously. It is great working with a company such as Rackspace that shares our commitment to the environment and we are pleased with the steps it is taking to reduce the impact of hosting our site on the environment."
If you are the CIO of an organisation and find yourself agreeing with the collective wisdom emanating from Gartner and IDC about looming datacentre strangulation, then suppliers such as Rackspace look like a potential way to avoid the ever-tightening ligature. You may as well use a green outsourcer, other things being equal, and carbon offsetting is better than nothing, even if it is a remarkably cheap thing for Rackspace to do.
In the past you might have got a 5 percent introductory discount. Now you get your very own copse of trees in Pembroke. It doesn't cost Rackspace much more and might even be cheaper. Perhaps you could go and have an IT team meeting in the woodland there.
(See also here.)