There has been a heated debate around the data center service provider business model: will large centralized data centers that pop up near major fiber hubs or distributed data centers that bring proximity and geographic flexibility dominate the future of the multi-tenant data center industry?
The large centralized data center model has been successful for many years. Multi-tenant service providers traditionally build large data centers that bring flexibility, redundancy, security, and value added services to clients of all sizes. It’s a model that has worked well in many cases as a result of concentrated fiber connectivity, effective facility management, and economies of scale that translate to a good return on investment.
With broader adoption of the outsourcing model and shifts in market demand, a potentially different approach to serving clients — around distributed data centers — is emerging. Distributed data center coverage and deployment supports the increasing customer demand and service provider footprint expansion outside of tier one markets. Regional markets near large, tier one hubs are emerging, which help absorb excess demand from those large markets. This model enables the previously underserved tier two and tier three markets to rebalance to meet local data center needs. As a result, as IT demand becomes more geographically dispersed, data center service providers may be rethinking their approach.
For endusers of cloud, hosting, and IT computing services, a distributed data center network reduces latency and enables greater coverage. For SMB endusers, this model offers the additional benefit of smaller, more dedicated data center operations. For multi-tenant data center businesses that serve these endusers — especially those that need capital preservation and flexibility — a distributed data center model facilitates ubiquitous just-in-time deployment.
Another interesting assessment that I recently read in an IDC report (registration required) points to an even bigger opportunity for distributed data centers in the young market for "wearable" computing devices such as Google Glass and smart watches. I’ll go a step further and say the same goes for emerging services that support “big data” applications such as sensors, security cameras and the like — all of which require minimum latency and ubiquitous coverage. Distributed data centers could become a backbone for delivering such services.
To enable such a distributed data center model, service provider companies should commit to more data center infrastructure management (DCIM) software capabilities for centralized management of pods and facilities. DCIM will allow a service provider to achieve visibility at the rack, cage, and room levels for all geographically dispersed data centers in its network, as if all these data centers were under one roof.
Trends in market demand and emerging technologies are definitely pointing the way to a new service provider model around distributed data centers. Time will tell us to what extent the industry will adopt this model.