The New Infrastructure: Data Centers

Brad Smidt, SVP, Business Development, Greater Phoenix Economic Council
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Brad Smidt, SVP, Business Development, Greater Phoenix Economic Council

Simply put, data centers are where the Internet lives. Today, one of the biggest and most crucial trends evolving for companies is how to operationally manage vast amounts of data. The rise of big data means increasingly new challenges for the management and storage associated with maintaining the enormous amounts of large and complex data accumulated daily.

“While online shopping is nothing new, e-commerce companies such as Le Tote and Stitch Fix increase the demand for online storage”

For example, an Exabyte, which is equivalent to one billion Gigabytes, is being stored across all cloud services today. However, a report from Cisco Systems published last year predicted that by 2019 we could see more than 24 Exabytes being shared across global cellular networks – per month.

The amount of data currently being managed is growing at exponential rates, and the industry is seeing this growth continually increasing, especially as consumers increase their usage of data devices. While online shopping is nothing new, e-commerce companies such as Le Tote and Stitch Fix increase the demand for online storage. Additionally, data-driven entertainment (think: Netflix, Hulu, etc.) also drives demand for data center growth.

In order to maintain this pace, companies have to make serious decisions about how and where this data is being stored and managed. And as technology continues to advance, the needs for data center technology are evolving. From personal computing and small business applications to large enterprise solutions, businesses are looking for more effective and efficient ways to keep up with evolving data storage needs.

While an estimated 75 percent of corporate users house their data in existing offices, in the next 10 years, a lot of these companies will be moving their IT equipment to “multi-tenant” data centers. These shared centers offer economies of scale for the corporate customer, as well as redundant connections, environmental controls and security assurances.

The need for efficient data center operations is on the rise, and companies across the country are looking for solutions that will meet the demands of today, and provide scalable solutions for the future. Taking into account infrastructure and power needs, direct access to power grids and telecommunication infrastructure plays an important role in where companies decide to locate their mission critical equipment.

With that in mind, building and operating a data center can be rather costly, particularly when it comes to power costs, which can be prohibitive to companies who require the processing and storage capacity, but are unable to maintain or build a center of their own. This has led to some companies opting to take advantage of these multi-tenant – or co-location – centers, where users can rent space, as well as equipment as a means to mitigate costs.

The continued growth of this industry has also led to changes in state policy, as regions compete to accommodate companies looking to expand or relocate their data center operations. States have created and passed legislation providing tax exemptions, credits for equipment purchases and even power rate breaks in order to increase attraction of data centers.

Ultimately, as big data becomes more and more part of the operational and business consideration for companies, it will be important for decision-makers to consider the factors for selecting a data center – impacts from natural disasters, skilled talent and a robust workforce, accessibility and overall operating costs.

The exponential rate at which data is created is further creating critical demand for data centers and storing and managing that information. The growing need for data centers that are able to meet the demands across all industries will be an important part of the conversation for both the private and public sectors. As a result, big data is an emerging industry offering tremendous opportunity for companies who take the time to plan ahead and select the right data center location.

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