Transformative Technology: How are Blockchain and Cloud On-Ramps Changing the Game?

ATLANTA, GA — In the infancy of the data center space, deals were 1-2 megawatts. But with the advocacy of hyperscale and the Cloud, deals have become larger and more complex. So CAPRE’s Fourth Annual Data Center & Cloud Infrastructure Summit dove into the who, what, why and where with the panel “State of Multi-Tenant Data Center Leasing: Best Practices for Brokers, Marketers, and Attorneys as Deals Grow in Size and Complexity.” Halfway through the panel, Moderator Brian Klebash, Founder and CEO of CAPRE, asked his panelists about another variable in the data center equation – specifically, how will the “pivot to blockchain” affect the day to day operations of data centers?

First to response was Michael Shaw, who leads up the Wholesale Data Center Solutions team at GIGA Data Centers. “I’ll go off the table and I’m going to project that blockchain is could potentially disrupt the data center space by creating a need for Tier II facilities,” he replied. “ Blockchain can operate in an environment that is less redundant, hotter, with high humidity, and it’s more disposable.”

“That means that the equipment that you’re using to run the blockchain application, you can run it hotter, then you would typically replace it in 1 year,” continued Shaw. “Salesforce recently announced that they’re pivoting to blockchain, Visa has also announced a pivot to blockchain, and a large commercial airline is working toward being 90% blockchain by the end of 2020. It’s a great question and I’m interested to see how it plays out, but I think it will end up reverting the requirements for the Tiers.”

Next, Shaw’s co-panelist, Tim Langan, Regional Vice President at Flexential chimed in with some thoughts. “Operators having that mix of some more Tier II-type data centers, the level of redundancy that you have with N+, it may bring down some costs per kilowatt,” he shared.

“Here in Atlanta, most of the big companies here were big companies 20 years ago. Some of them weren’t located in Atlanta then, but there is still a lot of viable legacy processes and technology that has some useful life to it, and it will not be able to reside in that same kind of data center,” Langan explained. “So if blockchain has that impact, you’re either going to have tiered sections of your data center or sites designed just for that. And in some cases it should help to drive down costs, if you don’t need that same level of redundancy.”

Michael Shaw, Wholesale Data Center Solutions, GIGA Data Centers

“I like what he said there,” replied Shaw, taking back the spotlight for a moment. “I’ve seen situations and talked to people who want to build a facility, do back-up cooling as part of the situation, and then build in immersion cooling,” he remarked. “So what’s not there? What’s not there is a chilling plant. So now, you’re saying, I can take something that is 300 KW per rack, and most people are still at 7, 10, or 12 KW per rack, so what happens now, where you can cool directly to the chip? A tiered solution is a good point.”

At that point, a member of the audience, William Thompson of DC BLOX raised his hand, stood up, and asked a question to the panel. “Sami Badri from Credit Suisse eluded to the importance of on-ramps and connectivity to the growth of colocation,” he recalled. “I’m interested in the panel’s view on the importance of that.”

Mike Lash, Senior Associate at CBRE didn’t hesitate to address that topic. “We have a lot of enterprise clients who use us for space and power. That’s how we negotiate, and if you’re lucky you get an on-ramp,” he began. “But now it’s getting a lot more sophisticated. It’s still operated as a lease but sometimes, it’s also a service agreement. So our clients are now wanting every on-ramp they possible can, and companies like Megaport and Packet Fabric give them the ability to clock up and clock down their bandwidth spend.”

Mike Lash, Senior Associate, CBRE Data Center Solutions

In other words, instead of having to lease 10 gig ports for a three year contract, they can get a 40 gig port, upload everything into their cloud, and spin it back down in a month. “To have that in a contract with a colocation provider, so that it’s just one piece of paper, is a huge advantage,” he remarked. “We’re also seeing success with cloud revenue portability. So say you’re spending X on your colo space, the providers are saying, if you made a bad bet and you overbought, we’ll let you take that spend and move it to any of our other services.”

And according to Lash, a lot of those services are partners like Megaport and AWS and the like. “That’s some big leverage for an enterprise client who is trying to bet what they’ll need in three or four years,” Lash shared. “And no one knows what they’re going to need in three or four years. So that’s a big topic right now and the colo providers who are flexible to allow that to happen will allow for bigger and longer terms.”

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