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Security concerns, power equipment upgrades and other reinvestment projects will continue to propel data center spending during the next three months.
The increase in data center facility spending will come from both medium and large organizations in North America and Europe, with the healthcare and finance industries leading the pack, according to 451 Research's Voice of the Enterprise Datacenters Q2 2015 quarterly survey.
"We've seen a pretty consistent increase [of data center spending]," said Dan Harrington, research director at 451 and author of the survey, which has been conducted quarterly since Q3 in 2014.
The percentage of respondents that plan to increase data center spending during the upcoming quarter has been 27% and 24%, respectively, during the past two surveys, Harrington said.
Spending will be focused mostly on racks and cabling, power equipment and data center infrastructure management (DCIM) software. The spending will primarily be for modernization and upgrades of the data center, some of it brought about by neglect during the recession earlier in the 2000s, Harrington said.
The findings match TechTarget's 2014 Global IT Priorities Survey, which found that spending has increased since 2010, except in 2012. TechTarget's survey found the average annual IT budget increased by 5.4%, more than double its growth the year before. In the same survey, 22% of respondents said their IT budget was holding steady and 13% of respondents said that it had dropped.
The 451 survey did not ask about specific spending amounts, only general questions about the total IT budget.
Dan Harringtonanalyst, 451 Research
Security concerns also fuel spending in 2015, in large part because of the constant stream of headlines about data breaches at organizations ranging from big-name retailers to the federal government, including office supply retailer Staples last year and the U.S. federal Office of Personnel Management earlier this year, Harrington said.
"People are getting more and more concerned about protecting their data," he said.
Data center spending a necessity
Data center facility spending will continue to increase as organizations look for new technologies and tools to meet IT demands, according to Dr. Duraid AlJailawi, manager of critical environments at CBRE Limited near Toronto.
Racks are becoming denser, AlJailawi said, noting that five years ago IT pros thought 20Kw per rack may be possible and now, 20Kw per rack is typical.
High-density deployments account for a portion of the increased spending, Harrington said, as data center operators undertake retrofits of the building and cabling systems to meet the demands of converged and hyper-converged systems, among other technologies.
"The efficiency levels are higher than they ever expected," he said.
As rack density has increased, the data center's physical infrastructure may have lagged behind, Harrington said.
"It's kind of the forgotten piece," he said.
Dennis R. Julian, a professional engineer and accredited tier designer at Integrated Design Group Inc. in Boston, said that he is getting work for multi-tenant facilities and cloud services, as both continue to grow.
In addition to colo and cloud computing providers, enterprise data centers are also seeing spending.
"We are still seeing a lot of [requests for proposals] for data center work, both new and renovation," Julian said. "The demand is still growing for storage, social media and big data."
Even as enterprises move compute loads to the cloud and colocation, most organizations still have an owned data center that meets its needs.
"There is all that sunk capital cost that is depreciating," Harrington said.
Many organizations are not restrained by rack space in the on-premises data center, but may have some power restraints. Others continue enterprise data center spending on enterprise data center management to meet compliance requirements for data control, or because the company is comfortable with handling its own IT load, he said.
"For new workloads, they are going to absolutely evaluate colo and cloud," Harrington said. "But you are not going to throw everything away because cloud is [enterprise] ready."
Organizations will continue to use the IT infrastructure they have and central, premium data center sites will continue to see improvements.
"Most of the investment will be at those sites," Harrington said, noting consolidation projects will continue, with the closing of secondary data center sites and server rooms.
DCIM picks up some steam
"It finally seems to be getting some steam," he said.
Data center operators that responded to the 451 survey cited a data center management tool as one part of an effort to modernize their facilities.
One respondent specifically said it selected Emerson Network Power's Trellis platform for DCIM because it adapted to the customer needs.
"They're nimble enough to listen," said the anonymous respondent from a company in the information and technology sector with more than 1,000 employees and more than $5 billion in annual revenue.
The survey asked respondents about vendor choices in a variety of other categories. In addition to DCIM, Schneider and Emerson were top choices for uninterruptible power supplies, power distribution units and computer room air conditioners and handlers. Schneider was first for cabinets, racks and cabling, with HP second.
"Microsoft continues to climb up the list," Harrington said, which accounts for both its Office 365 and Azure cloud products.
For colocation companies, the top vendor, Equinix, was mentioned by 11% of respondents, Harrington said.
"It is still a very fragmented, location-based market," Harrington said.
For example, AT&T was mentioned by just 7% of respondents and CenturyLink followed with 6%.
Two companies appeared in the Top 10 vendor list for both colo and cloud: Rackspace and CenturyLink.
Robert Gates covers data centers, data center strategies, server technologies, converged and hyperconverged infrastructure and open source operating systems for SearchDataCenter. Follow him @RBGatesTT.