Opportunities arise in data center convergence, consolidation, urban area exodus

Tuesday, November 29, 2011

CIOs used to focus on the IT aspect of establishing a data center, but that perspective has since changed, and a more integral approach is taken now, including the facilities' infrastructure and related costs, HP (NYSE: HPQ) executives told BNamericas.

The increasing convergence of the typically IT-related issues of a data center and aspects such as location, special regulations, costs, energy supply, commissioning and maintenance has created a business opportunity for companies like HP.

The idea behind this integral approach is to "avoid the client installing servers in a data center without verifying first if the center has the required capacity for those servers," according to David Eisenband, HP's critical facilities portfolio manager for Latin America.

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In addition, "there is a clear trend toward data center consolidation, both in Chile and Latin America, and that is where HP comes in with the Data Center Transformation service," terminal servers (TS) manager at HP Chile, Gustavo Osorio, told BNamericas.

With HP Transformation, the company has even been able to consolidate 85 data centers in six facilities, generating savings for more than US$1bn in both server and energy costs, Eisenband said, without specifying the location.

In Chile, the company will soon launch a US$31mn data center that consolidates five other centers from finance-related enterprises like Nexus, Redbanc and Transbank. At the new center, HP will manage the IT infrastructure for all three companies.

And HP's new data center is a clear example of another trend seen offering new business opportunities, according to the company.

Data centers have started to move away from urban centers, mainly due to costs and energy supply issues, the executives said.

"There is a big opportunity there, because companies with a data center already established in downtown Santiago, for example, will eventually have to migrate," Osorio added. The increasing data center service demand results in increasing energy demands, and urban centers do not have the capacity to meet this, according to the executive.


Data center demand is growing strong in most countries in Latin America, mainly due to increases in internet consumers, mobile data and internet speed.

According to Eisenband, demand is steadily increasing for new data centers and upgrades to existing facilities.

In the case of critical facilities, at the HP unit "each year we have doubled our growth rate, and I would be surprised if this year we just double our figures; I think it is going to be higher," he added without providing hard figures.

Growth in HP's multi-country area is different from other regions where the company operates. Latin America is constantly growing, unlike more mature markets like Europe, where figures are more stable, Osorio said.

"In particular, figures in Chile were quite representative, though I cannot disclose hard figures yet," he added. "There is strong growth in Chile and Colombia, and Brazil also posted exorbitant figures."