Reprint from Commercial Executive Magazine By Tim J. Randall
Entering the complex there is a Fort Knox feeling reminiscent of the classic James Bond movie Goldfinger: security access, cameras, closed-circuit monitors, guards, and badges. While there is no Oddjob at this facility, there is definitely a feeling of control, precision, and protection. The structure itself has the look and feel of a thousand other non-descript commercial buildings, however, once inside the premises the uniqueness of its operation is apparent. This particular building is the home of Phoenix NAP, an operator of one of the many data centers located in the Greater Phoenix Metropolitan area. And in a fascinating juxtaposition, Fort Knox and the data center are both designed to protect a valuable asset – the former gold bullion, and the latter the currency of intellectual property, data, and information.
The modern data center is a relatively new entrant into the technology and real estate space. Specifically, the data center is “the heart and brain behind the storage and transmission of data that empowers computers, phones, smart-phones, hand-held devices, GPS systems and other computer-centric devices.” From their origins as essentially data processing functions housed primarily in the office space of companies, the data center has evolved to service the geometric growth in technology and information over the past 25 years. Mark Bauer, managing director of Jones Lang LaSalle’s Data Center Solutions Group and his associate, Carter Robinson, point to the development of the data center as an outgrowth of companies large and small needing to manage ever-increasing loads of information and data. As these demands mounted, organizations needed dedicated space to house the requisite technology hardware. Mark Krison and Scott German, Data Center Broker specialists with CBRE, agree with this assessment. “Technology has been the main driver of the data center as more and more information must be stored.”
Evolution
The last two decades have been an evolution of the data center from corporate backroom, to enterprise facilities in which large companies owned and operated their custom space, to now third party vendors owning the building and leasing space to clients. Touring Phoenix NAP, the facility is able to house servers and hardware for companies of myriad size and capability for their individual specifications. Bauer and Robinson explain this evolution by citing the cost effectiveness of firms moving their data storage to third party facilities. “With technological obsolescence it becomes the data center operator’s responsibility for equipment, upkeep, and refreshment.”
Cost is a paramount concern for any organization and with technological innovation, the expense of data storage and management is an ever-present concern. Krison and German point to the unique and expensive nature of these facilities both in initial capital expenditure of millions of dollars, ranging from $1,200-$1,700 per-square-foot, and the ongoing cost of upgrades and maintenance. This has propelled the recent data center trend – the positioning of multiple organizational presences inside one third party vendor facility.
Statistics
To say that data centers are big business would be the technology equivalent of the energy boom in Hydraulic Fracturing and Horizontal Drilling. While numbers vary slightly from source to source, total global data center spending in 2012 was, according to Gartner, a leading IT tracking firm, $141 billion. Projected outward, data center spending will reach $218 billion in 2020 according to German and Krison, who cite their resources at Datacenter Dynamics, another leading research organization. Parallel to these findings, U.S. data center spending was roughly one-third, or $50 billion, and Western U.S. investment in data centers was ranked number one in the world in 2012. This last figure is especially interesting because Phoenix has and will continue to play a dominant role in data center expansion.
Why Phoenix? Read more....