Data Gravity is Shifting the Data Center Network. But in Which Direction?

Nov. 12, 2019
Is data gravity drawing data centers nearer to interconnection hubs in major markets, or will a new architecture emerge around massive cloud campuses in remote locations? Digital Realty and CyrusOne offer different takes.

Data center geography is feeling the weight of data gravity. As datasets grow larger and larger, they are testing the network requirements for analytics, AI and other data-intensive applications.

“There are data lakes, and now there’s the data ocean,” said Chris Sharp, the CTO of Digital Realty. “As this data gets heavier, and denser, it gets harder to move.”

“Data is becoming the new gold of the Internet, and as data sets become so large, they are becoming these digital black holes that continue to grow at an exponential rate,” said Gary Wojtaszek, CEO of CyrusOne.

This trend is concentrating storage near large data troves. But is this gravity drawing data centers toward interconnection hubs in major markets, or massive cloud campuses in remote locations?

The largest developers of wholesale data center space see this question differently, providing insights into their strategies for deploying future capacity.

  • Digital Realty envisions an explosion of data in major global cities, driven by the growth of AI, IoT, 5G and blockchain. Its new Platform DIGITAL strategy is focused on creating interconnection ecosystems around the data gravity in these hubs.
  • In a new take on the issue, CyrusOne believes data gravity will create a new architecture in which enterprises place hybrid cloud infrastructure near remote cloud campuses, creating demand for multi-tenant data centers in these areas.

In all likelihood, there are use cases to support both scenarios. This divergence illustrates how the coming data tsunami will enable a range of strategies, creating both opportunities and challenges for the data center industry.

New Data on Data Gravity

Recent research reports help quantify the scale of the data movement challenge, and how it may influence the placement of data centers going forward.

“Enterprises will increasingly be buried in data, much of which is not useful, but nuggets of which can be extremely valuable,” 451 Research analyst Kelly Morgan notes in The Infrastructure Imperative. “Data is being generated from multiple locations and as it accumulates, it has a gravity that will increasingly require resources be brought to where it sits rather than transporting it to a central location. IT resources will need to be more decentralized.”

Networks are being tested by the growing volume of data storage, which is creating concentrations of compute and network resources.

“As enterprises face an ever-increasing influx of data points, data gravity barriers will impede even the most mature IT infrastructure,” said Tony Bishop, Senior Vice President, Platform & Ecosystem Strategy at Digital Realty. “It’s important not to underestimate the potential downside of data gravity barriers.”

Industry research firms agree that the data boom is relentless, and is becoming a huge management challenge for many enterprises. 451 Research says 84 percent of enterprises surveyed report a rise in the amount of data they need to store. Nearly 30 percent say they already store more than 250 petabytes of data annually.

“This is a data flood,” writes Morgan. “The move to digitize is transforming the IT agenda, (and) the amount of data continues to steadily increase. Optimizing data will become one of the ways that companies differentiate themselves. Data hubs in multi-tenant data centers around the world are essential elements of this strategy.”

It’s not just a storage problem. Huge datasets are valuable, but difficult and expensive to move.

“Enterprises have a distribution problem,” Morgan writes. “More users, more locations, more apps, more devices and more data equals big challenges. Moving data will become cost-prohibitive and time-consuming. Enterprises will need to move elements of IT away from their headquarters toward where the data is generated and utilized.”

“It’s going to be harder and harder to move (data) around, even though we think about it as liquid,” said Morgan, who noted that it could costs millions to move an exabytes of data over a 100 gbps network.

Research firm IDC projects that the “Global Datasphere” will grow from 33 Zettabytes (ZB) in 2018 to 175 ZB by 2025. Today, more than 5 billion consumers interact with data every day – by 2025, that number will be 6 billion, or 75% of the world’s population. By 2025, IDC says, each connected person will have at least one data interaction every 18 seconds.

“People, software and machines are creating and consuming data faster and in all the places where we work, play, and live,” said Rick Villars, Research Vice President, Datacenter & Cloud, IDC. “The significant increase in data created, aggregated and analyzed in these new locations is contributing to a major shift away from deploying IT in traditional corporate data centers.”

Digital Realty: Megacity Ecosystems

A new study released Monday by Digital Realty digs deeper into these trends, examining the growth potential for four emerging technologies – AI, the Internet of Things,
IoT, Blockchain and 5G. The Global Digital Capitals Index projects that by 2029 these technologies will drive $721 billion in revenue per year to 60 of the largest cities around the world. The research estimates business impact based on metrics including new jobs, new companies, new industries and improved public services.

“The speed of technology innovation continues to accelerate at an alarming rate, creating tidal waves of data, and every company has specific nuances and risks exploited by data gravity that can’t be addressed with a one-size-fits-all cloud concept,” Bishop noted in a recent column for Data Center Frontier. “IT leaders will look to lean more heavily on the experience of data center providers who lead in planning centers of data exchange zones—achieving a proper mix of on-premises and cloud-resident workloads—to solve data gravity challenges.”

Data gravity is shaping up as a global network design challenge. The Digital Capitals report projects that much of the growth will focus on the world’s largest metropolises.

“It’s no surprise that cities like New York, Tokyo and London occupy a lofty position in the report,” said Sharp. “Not only are they hubs for the highest density of digital commercial activity and digitally-skilled workforces, but also their laser focus on the creation of new digital technologies and applications makes them prime examples of what’s possible in the world’s data economy.”

The report’s most striking predictions involve data growth in the Asia Pacific region, which is likely to see blockbuster digital growth from AI, IoT, 5G and blockchain. This chart reflects the cities that are expected to see the largest growth in the next 10 years. All are in Asia or the Middle East.

That’s why Digital Realty has spent the last several years focused on a global expansion of its data center footprint. The company has acquired Brazil’s Ascenty for $1.7 billion (with Brookfield), created a $1 billion joint venture with Mitsubishi in Japan, and last month agreed to acquire Interxion for $8.4 billion, adding more than 50 data centers across Europe.

“It’s about powering your digital ambitions with the right solutions in the right places, everywhere you want to be,” said Bill Stein, CEO of Digital Realty.

As we noted in our coverage of the PlatformDIGITAL announcement, the strategy reflects Digital Realty’s ambitions to grow its colocation and interconnection business, while supporting metro connectivity hubs with wholesale space via connected campuses.

CyrusOne: Rural Cloud Access Points

CyrusOne has acquired 20 acres of land for a data center campus in Council Bluffs, Iowa, which is also home to one of the largest cloud campuses for Google.

“We will build an enterprise data center in close proximity connected with direct fiber path to a leading hyperscalers compute and storage nodes, which we used for hybrid cloud deployments,”  Wojtaszek said on the company’s earnings call. “It will drive significant improvements and performance cost and security, making it a very attractive value proposition for enterprises, particularly those with massive datasets.”

his Microsoft storage unit has 96 bays for hard disk drives in a JBOD (Just A Bunch of Disks) configuration. It can use 14TB drives for a max capacity of 1.2 petabytes in a 4U chassis. (Photo: Rich Miller)

Wojtaszek says there is a “a noticeable change in data center network topology underway, which is being driven by the growing importance of compute and storage nodes.” He said the Council Bluffs project allows CyrusOne “to provide the provide the private cloud through an architecture that a significantly more efficient than the traditional on ramp compute node network topology.”

That marks a shift in the primacy of interconnection, he says.

“In the early days of the Internet, eyeball acquisition was the primary motivator for companies that were looking to distribute their product to customers over the Internet, which in turn placed a high value on establishing interconnected data centers,” said Wojtaszek. “However, what we are seeing now is that the network nodes that dominated the growth of the data center industry for the first 30 years are becoming less relevant and we believe will be subsumed at the hyperscalers compute and storage nodes, which will be where the next wave of Internet value creation comes from. This is something that I think is going to continue to expand over time as the datasets get larger and larger.”

The trend driving this new topology is AI workloads, which often work best with close proximity between storage and compute, but don’t necessarily need to connect to a large number of networks. “This is a trend that has just started and we believe will only accelerate over the next five years.”

“The network nodes that dominated the growth of the data center industry for the first 30 years are becoming less relevant and we believe will be subsumed at the hyperscalers compute and storage nodes.”
CyrusOne CEO Gary Wojtaszek

Digital Realty executives are also keenly focused on data gravity, but say that customer eyeballs also have gravity, as reflected by cloud computing providers deploying more server farms in the suburbs in recent years.

“If you look at where major cloud destinations are, it’s places like Northern Virginia and New York and Dallas and Silicon Valley,” said Digital Realty’s Bishop. “(Cloud campuses) are all supply-side, not demand side. Data stores have to be located adjacent to clouds – but not in Iowa. Iowa is a low-cost hedge, not the edge.”

Wojtaszek says close proximity to cloud campuses and network backbones offers an alternate approach. He noted the huge concentration of cloud capacity along the 41st parallel, along high-capacity East-West fiber routes that track railroad rights of way.  A number of major cloud campuses have been built along the 41st parallel, which runs through Ohio, Iowa, Wyoming and Utah.

CyrusOne says it is deploying 4.5 megawatts of data center capacity in the first phase of its Iowa project, with half the capacity pre-sold. The facility can support up to 24 megawatts. The company may pursue similar deployments in Texas.

“We’ve been working on a number of different initiatives in Houston for our oil and gas customers,” said Wojtaszek. “We’re seeing is that the data sets that they’re dealing with are just so massive that it’s not really efficient for our customers there to put that data into a cloud, because the ingress and egress fees going moving that data from back and forth to the cloud is really prohibitively expensive.

“We’re expecting this type of topology to happen more and more as datasets get larger over time.”

About the Author

Rich Miller

I write about the places where the Internet lives, telling the story of data centers and the people who build them. I founded Data Center Knowledge, the data center industry's leading news site. Now I'm exploring the future of cloud computing at Data Center Frontier.

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