CapRE’s Dulles Data Center & Cloud Infrastructure Leadership Panel: The View from the Top for 2019
by Josh Anderson
DULLES, VA – When CapRE organizes a data center summit, we like to let our panelists speak their minds. And this is never as clear as on our leadership panels, such as the Data Center & Cloud Infrastructure Leadership Panel: The View from the Top for 2019 at CapRE’s 2019 Data Center & Cloud Infrastructure Forecast East. Below, we highlight three high-level viewpoints offered from industry leaders when asked to appraise the data center industry from their vantage point.
“From my viewpoint, there is a changing landscape. We’re headed into a multi-cloud world, where enterprises and hyperscalers – and it’s not just Amazon or Oracle or Google – have to use assets that are on-premise, assets that are in colocation, assets that are in hosting, and the public cloud, all together,” offered Emil Sayegh, Chief Executive Officer at Hostway Services, Inc:. “So that puts a premium upon the network and the inter-connectivity of all of these data center assets.
However Sayegh thinks there’s a bigger trend at play as well, and that’s consolidation. “There’s going to be consolidation,” he predicted. “When you have a big behemoth like the hyperscale players, to play on top of them, to play below them, to play alongside them, you have to be of a certain scale. So I think we’re going to move within a phase where there’s going to be mergers, acquisitions and so forth.”
Next up, Jeffrey Moerdler, Partner at Mintz Levin offered his take on this topic: “The comment has come up before. That there are going to be a few large players, and they’re going to be the only ones that succeed. That’s been the implication of what you were just saying,” he remarked. “But I have to say that I disagree. I think that the space is growing exponentially. There will, without any doubt, be consolidation by the large players. But that creates gaps and holes and opportunities for every players. And not every company wants to deal with a behemoth and be lost in the process.”
“The larger the company is, the harder it is for them to do anything creative,” Moerdler stressed. “Everything has to be a square peg in a square hole. And if you don’t fit that model – if you want a pod, or two pods, or a five, or a half, or what? You want two and seven eights of a pod? Sorry, can’t do it. and that creates a huge opportunity, for small companies to grow into the mid-sized space and for medium-sized companies to fill the gaps in those others.”
Finally, Jake Ring, Co-Founder & Chief Executive Officer of GIGA Data Centers chimed in. “I’ve got to concur on that because here’s another thing to keep in mind. RightScale has their survey of cloud usage, and 44% of workloads at enterprise companies with 1000 employees or more, are in private cloud. 33% of workloads are in public cloud,” he shared. “Citrix was around back in 2003, 2004, so private cloud has been used ever since. If you own an enterprise data center, get out. It’s a liability. It’s a cost-suck. And I can tell you because I used to work at GE, and the GE data center in Alpharetta spent $1 Million annually in maintenance costs for chilled water system alone.”
“You’ve got to get out of that cost liability because your competitors have. If you’ve got the IT and you need to keep it, go to colocation,” Ring concluded. “If you’ve got the workloads that you can transport, go to hosting. But get out of your enterprise data center. That was echoed throughout the week during the Gartner IT conference in December – and I see that as another very effective driver.”