Google’s Daniel Golding: Expect Data Centers to Continue Getting Bigger, and Networks to Continue Getting More Complicated

LEESBURG, VA — Fireside Chats are always a highlight of CAPRE’s International Data Center Series Summits, and CAPRE’s Seventh Annual Mid-Atlantic Data Center Summit in Leesburg, VA last week was no exception. Driving the Data Center: Networks, Clouds, and the Data Centers featured the perspective of two highly respected data center leaders, Buddy Rizer, Executive Director of Economic Development for Loudoun County, VA & Daniel Golding, Network and Data Center Infrastructure Leader at Google. Soon after the session kicked off, Golding offered a broad forecast of where the industry is headed next.

“This industry still very new. And it’s still evolving. This is a much different industry today than from 8-9 years ago, when you and I first sat down and spoke. And I think that the evolution will continue,” remarked Rizer. “So what do you see as the future of the data center industry?”

Golding replied that he thinks there are a couple of things to take into account. “I think the data centers we’re building are going to continue to get larger. You know, just a few years ago, if you built a 10 or 15 megawatt data center, that was a big data center,” he recalled. “People were not blinking about building 3 or 4 megawatt data centers. But the economics are heavily in favor of larger data centers. There is a large class of deals that you can’t address if you are only building smaller data centers. And you do see providers that are focusing on the very small stuff, but I think the economics of the industry are moving us toward the large [data centers], and I think they will continue to do so.”

“It used to be that you could lease half a rack. That was the best business you could be in as a colo provider,” Golding reminisced, with a chuckle. “It had super high margins – it was wonderful. But now it’s gone. Cloud computing is eating most kinds of interconnection-related retail colocation. That’s driving things toward larger, less expensive data centers. And because they’re bigger and because the deals are bigger, we’re seeing more customization around what individual customers want and what those individual customers need. We’re also seeing the cost basis for these data centers continue to be driven down. So if you’re cost-basis is a five-year cost basis…that’s going to make things increasingly difficult.”

Next, Golding shifted to talking about networks. “I’m a Google network guy, and the networks we’re putting into these data centers are increasingly complicated. The amount of bandwidth coming from these servers has been increasing year over year over year. it’s not just compute power. While the CPU is increasing, we’re seeing other things,” he divulged. “We’re seeing GPUs, TPUs and machine learning. We’re seeing increasing amounts of network being used. That means that the network builds and the network infrastructure in these data centers are growing increasingly complex. So the folks who are doing things like network fit-out for us, are becoming increasingly important.”

“And let’s say I’m a real estate developer, and that I’m building a 100-megawatt data center,” he continued. “I don’t just need to have people who understand the mechanical and electric engineering of it all. Increasingly, I need someone who understands the network. To a point that just wasn’t there ten years ago. It’s a big difference. And the providers who have that, have a significant edge over the folks who don’t have that.”

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