The Future of the Enterprise Data Center in a Cloud and Colo World

Nov. 16, 2017
Our Executive Roundtable panel of thought leaders discuss the future of the enterprise data center, and where it fits amid the dynamic growth of cloud and colocation services.

Today we conclude our Data Center Executive Roundtable, a quarterly feature showcasing the insights of thought leaders on the state of the data center industry, and where it is headed. In today’s discussion, our panel of experienced data center executives – IO Chief Operating Officer Rick Crutchley, Marvin Rowell of BASELAYER, Vertiv VP of marketing & strategy Amy Johnson and Jeff Klaus, GM of Intel Data Center Software Solutions – discuss the future of the enterprise data center, and where it fits amid the dynamic growth of cloud and colocation services.

The conversation is moderated by Rich Miller, the founder and editor of Data Center Frontier.

Data Center Frontier:  It appears that a dwindling number of users are building new corporate data centers, with most new workloads shifting to cloud or colo environments. What’s your take on this transition, and what will it mean for legacy corporate data centers? Do these facilities have a future as candidates for retrofit or repurposing?


Marvin Rowell: Large corporations often diversify their data center assets across three resource pools (1) on-premise, (2) colocation, and (3) cloud. While many new applications fit nicely to a cloud environment, not all follow suit based requirements (latency, security, regulatory needs, etc.). Therefore, we do see an ongoing need for on-premise data centers, however their usage may change over time.

We’ve seen many companies exploring modular solutions for their new builds to supplement and upgrade their on-premises infrastructure while they transition their legacy data center buildings into office space. Enterprises can then consolidate their staff into one physical location allowing them to eliminate lease and rent costs. The result is significant savings with the added benefit of updated data center capacity.


Rick Crutchley: While the number of legacy corporate data centers is shrinking (or at least the amount of space is shrinking), the need for them is not. Whether companies have an emotional tie to their data centers or they need to run business-critical apps in-house, there will continue to be a role for corporate data centers for the foreseeable future.

That means that we’re in a place where the hybrid computing model is growing, and the role of IT has become less a “tender of the machines” and more a strategic decider of where their workloads will be placed. Mission-critical apps and data will likely reside in house, while less critical apps or apps demanded by internal customers will be put out to the public cloud.

And, as the need for availability, reliability, security, scalability, and connectivity increases, enterprises will continue to look to colocation as a viable option for their infrastructures. Colos offer managed IT services – such as carrier-neutral connectivity with cloud on-ramps – that make it easier for companies to make strategic decisions about where their workloads will run.


Amy Johnson: With so much focus on colo and cloud, it’s easy to forget that the majority of data centers are enterprise. Corporate data centers are not going away. Recent IHS data shows about 40 percent of loads are colo and cloud, 60 percent are enterprise. That mix certainly will tilt more toward cloud and colo going forward, but there are some tasks that either cannot or will not be moved to third-party providers.

What we will see – and it’s already starting – is a refocus of those enterprise data centers to try to take advantage of the colo and cloud generation best practices to improve their efficiency, scalability and utilization rate. We anticipate widespread consolidation projects that take the opportunity to leverage those best practices to produce smaller, more efficient and more secure facilities with high levels of availability. Remember, these new or refurbished enterprise data centers will be housing mission-critical data that can’t be outsourced, so security and availability will be critical for enterprise, cloud and colocation facilities.


Jeff Klaus:  We haven’t hit the wall on data center demand yet. Service providers are making their environments more flexible (so they can deploy to cloud and scale out), but security still has a need to drive data on premise, and most HPC is still run on premise.

We may experience lower demand at some point, but the virtuous cycle of data demand and growth is still driving buildout.

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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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