How the mega data center is changing the hardware and data center markets

1Executive Summary

Mega data centers are currently shaking up the $106 billion data center and hardware market. These behemoths differ strikingly from the traditional data centers that far outnumber them. “Mega data center” here refers to a single facility with 15,000 or more servers. The operating costs of megas leave traditional data centers in the dust. The megas’ frugality is absolutely essential to provide economically the compute power and storage for the world’s web users. Mega data centers in particular can scale massively. This means that the incremental cost to add another thousand — or even 1 million — users to a particular service or application is almost negligible.

Traditional data center shops can no longer ignore mega data centers. The latter’s innovations in serviceability, automatically detecting and recovering from failures, procurement practices, and so forth will become standard practice in all modern data centers.

Developers, operators, and suppliers of mega data centers need to better understand the next potential markets for mega-style centers. This is beyond serving startups such as Netflix. That streaming movie company is among 50 companies that overnight can grow to over 5 million users and hit a market capitalization greater than $1 billion. They absolutely could not exist without the mega data centers. Hardware and infrastructure suppliers need to become much more customer-centric. The new 800-pound gorilla is not the vendor but the billion-dollar-per-year buyer of infrastructure.

Key highlights from this report include:

  • Mega data centers have unique procurement and supply-chain management practices that hammer down costs.
  • Enterprise information-technology planners in particular are at a crossroad. They can shed their computer centers outright (as Accenture has done) and go to public cloud services, or, alternately, they can embrace the mega data center idea wholeheartedly.
  • Mega data centers won’t replace traditional centers anytime soon, as they haven’t been designed to be backward-compatible with the last generation of systems and software.
  • Facebook’s data centers are sharing their secrets. The open-source initiative this web giant launched could accelerate cost reductions and innovations in the supplier base for data centers.
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