Organizations Increasing Investment in Data Center Facilities; Focus on Upgrades and Retrofits

Photo credit: Trane

Despite increased investment in cloud and colocation providers, 87% of data center operators surveyed from North America and Europe are maintaining or increasing their data center facility spending, with 25% expecting to increase spending over the next 90 days, according to 451 Research’s Voice of the Enterprise: Datacenters Q2 2015 quarterly survey.

Both medium-sized and large organizations expect to increase spending on data centers, with the most growth coming from healthcare and finance industries. The primary targets for this increased spending are rack and cabling, power equipment, and data center infrastructure management software (DCIM).

“To support growing business demands on IT, enterprises are freeing up budgets and investing in modernizing neglected data center facilities,” said Dan Harrington, Research Director at 451 Research.

Organizations surveyed cited Schneider Electric as their preferred provider in four out of seven facilities equipment and software categories, including universal power supplies (UPS), power distribution units (PDU), and racks and cabling, as well as DCIM. Emerson Network Power follows closely in many categories and is the number one preferred computer room air conditioning and air handling equipment provider. Other vendors that ranked highly include Carrier, Caterpillar, Eaton, HP and Trane.

The survey also revealed that organizations continue to consolidate their local data centers and server rooms in favor of a more centralized model supplemented by colocation and cloud resources. Over the next two years, most organizations expect to close many of their smaller local data centers and server rooms, indicating a continued trend toward fewer overall datacenter sites. However, the number of premium, centralized data centers – targets for datacenter consolidation and migration projects – is increasing.

While there will be more, larger sites, the total overall datacenter square footage owned by enterprises is flat worldwide. Of those organizations increasing spending, 37% are doing so to support datacenter retrofits or upgrade projects. Existing data centers will need to be upgraded, considering 62% of organizations would rather consolidate their IT infrastructure than build a new data center.

Colocation and Cloud Service Providers are Increasingly Important Deployment Venues

When organizations reach 75% data center utilization, they begin to evaluate the need for additional capacity, according to the survey. Those organizations are more likely to adopt colocation and cloud providers than to build a new data center. This is consistent with 451’s Datacenter Market Sizing Forecast Model, which shows the colocation market growing at 8% in Q2 2015 on a square footage basis. Colocation and wholesale providers are becoming more important to enterprises as they provide reliable and secure datacenter space and connectivity.



“Colocation and cloud service providers are well positioned to grow as enterprises require additional capacity and increasingly need to be more agile in responding to growing business demands,” said Harrington. “Facilities vendors who target colocation and cloud service providers also will benefit from this increased enterprise demand.”