Session: Expand Revenue, Not Your Datacenter

(Ping! Zine) – I attended the Digital Realty Trust seminar entitled “Expand your Revenue, Not your Datacenter” on the first day of HostingCon 2010.   As is common at industry seminars, the company mostly utilized its time to promote their own services, but many interesting factual tid-bits were presented as well.  Digital Realty Trust is apparently a 10 year old, financially stable, publicly traded company specializing in datacenter “real estate”.  They help hosting, internet, and colo companies build or lease datacenters.  DRT has impressive clients such as Yahoo, Google, Microsoft, JP Morgan Chase, and other familiar fortune 2000’s.

As the owner of a hosting company with wholly owned equipment and a large client-base, I sometimes grapple with the option of building a datacenter.  At any given point, we need to ask ourselves, should we be colo-ing in the retail market, reducing overhead by becoming a tenant in a carrier hotel, or is it best to go even further and lease or buy your own datacenter real estate?  Of course, there is no perfect answer to this for any given situation. 

According to Dan Ephraim, here are some interesting facts that may lead your hosting company in the right direction:

Working with the likes of Digital Realty Trust and other datacenter realty companies can reduce risk.  The client can utilize their resources and experience to avoid common problems when it comes to DIY datacenter construction. 

It is a must to achieve a “balance” to ensure optimal decision-making.  Four elements are involved in datacenter construction:  Risk, Design, Operations, and Cost.  Datacenter realty companies can assist you with these elements. 

Datacenter budgets are predicted to expand at 8.3% annually.  Those who are looking to expand are generatlly interested in MORE SPACE at a wholesale rate.

Retail colo companies can stick you with an extra 20% overhead.  Electrical power is commonly marked up by 40% in the Northwest USA as an example.  

In the most desired datacenter locations, markets have more demand than supply.

It may come as a surprise, but many large datacenters actually lease their property.

3/4 of large cloud providers look for datacenter construction partners – someone who can advise and to consult with. 

And finally, think of your real estate choice as a business decision rather than just a technical decision.


By Dan Ephraim (Digital Realty Trust)
Written by Evan Kamlet, Host4Yourself