Datacenter density is your destiny

In `80s classic movie "Back to the Future", young George McFly approaches Lorraine Baines and flubs his introduction. Meaning to say "I'm your destiny", McFly nervously utters: "I'm your density". For business of all sizes, density is their destiny as they look ahead to the post-PC era and either acquiring or outsourcing massive datacenter capacity.

The three years ahead will be tumultuous, as businesses look to balance converging and contradictory priorities as they rush to the cloud, or sometimes not. Any organization offering connected services -- whether to employees, business to business or business to consumer -- must think about expanding density as their destiny. Should they consolidate server capacity through virtualization, build datacenters or outsource capacity to cloud providers such as Amazon and Microsoft? There is no stock answer, because businesses' different sizes, global or local reach, IT budgets or operational needs vary so vastly. But there are trends that will hugely affect decision-making.

According to Gartner, datacenter hardware spending will reach $98.9 billion this year -- that's up 12 percent from 2010. The analyst firm predicts datacenter hardware spending to reach $106.4 billion next year and $126.2 billion in 2015.

"Worldwide data center hardware spending will finally reach and surpass 2008 levels", Jon Hardcastle, Gartner research director, says. "Storage is the main driver for growth. Although only a quarter of data center hardware spending is on storage, almost half of the growth in spending will be from the storage market".

Virtualization and server consolidation are inhibiting overall spending, which is good for IT organizations. Additionally, "data centers are getting more efficient, leading to higher system deployment densities and inhibiting demand for floor space", Hardcastle says.

Future Now

Four converging trends will affect decisions businesses of all sizes must consider when designing datacenter strategies, whether in-house, outsourced or a combination of both.

1. Lingering global economic problems. The European Union's ongoing sovereign debt crisis is destabilizing stock markets and economies across the globe. Greece's plight has nominal impact on US banks. However, according to the Federal Reserve, US banks hold about $34 billion in Italian and Spanish bonds. Default could set off a new debt crisis, with banks once again holding bad paper -- as they did during mortgage debt debacle.

On November 14, the Federal Reserve Bank of San Francisco warned:

Gathering storms across the Atlantic threaten a US economy not yet recovered from the last recession. The US economy is fragile with limited ability to withstand shocks...The odds are greater than 50 percent that we will experience a recession sometime early in 2012...Prudence suggests that the fragile state of the US economy would not easily withstand turbulence coming across the Atlantic. A European sovereign debt default may well sink the United States back into recession.

Economic uncertainty, and even return to recession, puts pressure on IT organizations to cut budgets and re-evaluate investments. Many organizations curtailed expansion starting in 2008; for reasons stated below they can't afford to put off cloud and datacenter expansion again and may benefit long term from new investments. Datcenter spending is greatest among BRIC (Brazil, Russia, India and China), according to Gartner, and that's not surprising given the European debt crisis.

2. Changing worker lifestyles. The lingering economic uncertainty is posed to regain intensity, going from hurricane in 2008 to tropical storm in 2009 and, if there is government bond default in Europe, hurricane again in 2012. Many companies already cut staffs to the bone during the last recession, accelerating another trend already underway: Commingling of worker behavior and personal and professional data.

Gone are the days when knowledge workers, as some vendors refer to them, clock 9-to-5 jobs. There was the work role in the office that was separate from the home role. But now, with laptops, smartphones and other mobile devices, roles and data converge and commingle. The worker at home might go from parent role to office manager role with a single email, text message or phone call. Staff reductions accelerate this trend.

Businesses evaluating datacenter options should consider how to maximize worker productivity in the continuing downturn while protecting sensitive data. Too much business data leaves corporate confines, creating privacy and security risks should mobile devices be lost or stolen. Cloud services, whether from in-house or outsourced datacenters, can pull data back inside the firewall and better separate personal and professional roles.

3. Smartphone and tablets. The so-called post-PC era is here, as connected mobile devices displace personal computers. There are nearly 6 billion cell phone subscribers across the globe, according to the United Nations. IDC forecast 1 billion smartphone shipments annually by 2015 -- that's larger than the current PC install base.

"Customers are clamoring for new and easy ways to interact with the organizations they deal with, and no company should think itself immune to this new business dynamic," Gene Alvarez, Gartner research vice president, says. "As more people use smartphones, they will expect an extension of their customer experience to be supported by this kind of device".

Businesses must contend with increasing numbers of mobile workers, customers and partners. In October, Apple launched iCloud, which immediately collapsed under the weight of user demand -- much of it from mobile devices. Apple planned for the launch for at least most of 2011 and still couldn't meet demand, despite having increased datacenter capacity.

This trend demands increased datacenter and storage capacity, particularly as cellular carriers deploy 4G networks capable of delivering bandwidth in the double digits to smartphones and tablets. These devices are go-everywhere, unlike PCs.

4. Social media and collaboration. Dramatic changes confront businesses that once used collaboration tools from Microsoft and other vendors in the mid-Noughties to improve worker productivity. Cloud services that didn't exist before 2006, such as Facebook, Twitter and YouTube connect people and businesses in ways unimaginable half a decade ago. They create demand for increased cloud and datacenter capacity seemingly everywhere.

This also ties into increased use of mobile devices. Smartphone users will demand "that social aspects of the Web be intertwined with this experience", Alvarez says.

Smart businesses can use social media interaction to compensate for sagging workforces and cutbacks in R&D, customer service, partner outreach and other areas that are vital to future growth. Increased customer interaction via social media tools can increase their loyalty and leverage them to fill in organizational gaps via mechanisms like "crowd sourcing".

Social media and increased mobility drive other trends. According to Gartner research vice president Brian Burke:

Gamification could become as important as Facebook, eBay or Amazon. During 2012, 20 percent of Global 2000 organizations will deploy a gamified application. IT leaders must start exploring opportunities to use gamification to increase engagement with customers and employees, with the aim of deploying a gamified application next year. Understanding how to apply game mechanics to motivate positive behavioral change is critical to success

The trend could be as transforming in three years as social networks are today. It all requires increased datacenter density to meet the destiny.

Photo Credit: Eugene Kouzmenok/Shutterstock

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