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Credit Crunch Squeezing Data Center Space

miller60 writes "Many companies have saved money by leasing wholesale 'plug and play' data center space instead of building their own facilities. But the credit crunch has slowed the construction of new data centers, and analysts say this will create a shortage of data center space in 2010 in key markets like northern Virginia and Silicon Valley where demand exceeds supply. The situation is already becoming critical for companies with large space requirements, as indicated by a flurry of leasing recently in northern Virginia, where the remaining space may be quickly absorbed by government stimulus projects."

9 of 84 comments (clear)

  1. Supply? Demand? by chuck · · Score: 4, Insightful

    As the supply of data center space dwindles, the price will go up. When it goes up enough, it will become profitable to build new data centers, and it will happen. It's the economy, people.

  2. Our own data center by Anonymous Coward · · Score: 3, Interesting

    We've been fighting to find decent data center space for a good while here in Tampa, FL. Level(3) keeps saying they cannot provide enough power to fully utilize their facilities (we read that as holding onto premium real estate for the high bidders) and other data centers we've looked into are either ludicrously expensive or force us to use their connections to the internet which we, as an ISP, really don't want to do.

    1. Re:Our own data center by causality · · Score: 4, Insightful

      We've been fighting to find decent data center space for a good while here in Tampa, FL. Level(3) keeps saying they cannot provide enough power to fully utilize their facilities (we read that as holding onto premium real estate for the high bidders) and other data centers we've looked into are either ludicrously expensive or force us to use their connections to the internet which we, as an ISP, really don't want to do.

      At what point then does it make sense to hire a data center with a fat pipe that's located on foreign soil? If domestic (USA) data center space is becoming a scarcer, and thus more expensive, resource and that point is reached sooner rather than later, wouldn't this represent yet more wealth being transferred out of this country? I don't know how large and significant this market is, but it sounds like one that is only going to become more significant as the need to store electronic data is only going to grow. The summary notes:

      The situation is already becoming critical for companies with large space requirements, as indicated by a flurry of leasing recently in northern Virginia, where the remaining space may be quickly absorbed by government stimulus projects

      Some stimulus indeed if it encourages wealth to leave this country. Now I am rather ignorant about economics. I can apply basic reasoning like this but I really don't know much about the topic and I freely admit that. Is there any likely way that this would not be the case?

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  3. Re:Supply? Demand? by nganju · · Score: 3, Insightful

    It's already profitable. The credit crunch has quashed new centers from being built because the credit markets are frozen due to irrational fears, something the supply/demand model does not account for. When the space dwindles the new centers will be built but there's a lag, it's not instant, also something supply/demand models do not account for. Let's leave the Econ 101 classroom theory alone and take a look at the real world. http://en.wikipedia.org/wiki/Behavioral_economics

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  4. Re:Supply? Demand? by icebike · · Score: 4, Insightful

    Temporary shortages of things like this are the ultimate Non-Story.

    If we want to really HoZe this industry, let the government step in. Otherwise will the hand wringers please shut up and sit down and let the market handle this!?

    Yes, financing may be tight, unless you are Google or Amazon, or Apple, or IBM, or Microsoft. But it it IS a problem you haven't built your business case very well. There are Venture Capitalists out there roaming around looking for ways to put their money to work, and infrastructure is a lot more reliable then next weeks "big thing" software project.

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  5. Gerr... what?? by moogied · · Score: 3, Informative
    I am sitting in a data center right now.. we are at about 65% of "total capacity" and at about 85% of our current capacity... our 6 other data centers are in similiar situations. We have some big names looking at moving into us, which means they will be leaving other places soon.

    India has a pretty firm grasp on data centers now, India's economy is doing ok at the moment.. so net effect? No data center shortages.

    Total capacity is if we actually used all of our available space instead of dedicating some of it to on-site tape storage, admin cubicles, increased our eletrical capacity to max, and same with AC. You won't see a data center shortage, you will however see an upsurge in datacenter remodeling.

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    So basically, -1 troll/offtopic is really slashdots way of saying "I hate that you thought of something before me."
  6. It ain't the servers, dude! by Ungrounded+Lightning · · Score: 4, Interesting

    Sounds fishy to me.
    Power demands of rack servers have been falling dramatically for years...

    Read the post more closely. It's the networking equipment that is chewing up more power. You have to make up for it by using lower-power(-input) servers.

    As someone involved in designing the servers I can attest that they ARE taking more power. (Part of that is that they're doing more stuff than just hot-potatoing packets. Part is that they're putting more bandwidth into each RU (Rack Unit {of height in a rack}). And part is that the currently-deploying generation of networking equipment uses custom chips built in the stage of silicon feature shrinkage where the leakage got so big that it is consuming as much power as the computation - the generation before the foundaries figured out a way around that and started cutting the leakage fraction back down.

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  7. It's called virtualization... by billybob_jcv · · Score: 4, Informative

    We tripled the number of servers and halved the space requirements by virtualizing as much as we could. The only things we couldn't put in a VM were stuff with specific HW requirements (like fax server boards and tape robots). Many large companies are just afraid or unaware of the capabilities of virtualization. The big software companies also aren't helping. For example, Oracle needs to get over it and figure out that many midsize companies don't need RAC for performance or 24/7 @ 99.999% - there are many, many businesses that really can tolerate an app being down for under an hour (or less) while the VM is brought up on a different physical box. The current Oracle license model completely fails in an environment where you want to run mulitple VMs on relatively cheap multicore, multiprocessor blades.

  8. Re:sounds like bullcrap to me by Dice · · Score: 3, Informative

    Small to medium sized datacenters are in the 100s of racks range. They measure power capacity in megawatts (MVA).

    Typically, though, your real constraint is the cooling system. For this reasons the datacenter most of my clients are in gives you a certain amount of floor space for a certain amount of power when you buy a cage. The power works out such that you couldn't really fill a whole 42U with 1U servers, let alone blades.