Microsoft and Google - Are they really ceasing data center expansion?

With the numerous reports of Google, Microsoft, and others halting data center builds you would think the data center business was caving in on itself like a dying star.

Town governments as well as the state Governments where the builds are halted are groaning. Sure they gave up tax breaks (their revenue) and the payroll tax that was supposed to come won’t, but I have to wonder why they are they that concerned. Data centers have a lot of servers in them, not a lot of payroll taxes in them, so at the end of the day they are out what they would have been out anyway which is the revenue on the construction and sales tax.

So the governments are feeling what the companies are – a contraction in the economy, driven by lack of access to capital in the credit markets. So things contract.

I can’t help but wonder though, with green technology evolving quickly AND the emergence of containers to house servers and their inherent improvement in efficiency, are they really thinking and retooling for the long term?

Both are smart companies, and I learned a long time ago that smart companies will take a strategic look inside their four walls when things slow down to retool and improve for when things do expand again.

I was in a meeting today discussing PUE of containers with an organization considering a build of a new data center. If you can make a data center TWICE as efficient, for 1/5 the cost, and shift the capex to almost 100% opex - wouldn’t you do it?

I think Microsoft and Google are simply rethinking how they want to deploy computing horsepower. Containers are a very modular, very fast and very economical way to deploy horsepower. I realize fully that those of us in the traditional data center realm are looking at containers and scratching our heads, however I for one believe that they are the future of data centers – which at the end of the day house servers with CPU and memory and give us resource pools or clouds.

If that computing resource pool can be deployed at massive density, double efficiency, and at a fraction of the cost – who in their right mind wants to defend the position of paying twice as much for something half as good?

Me neither…

I am working on publishing a white paper that explores the cost and efficiency of containers vs traditional data centers and will post the link when it's done in a few weeks. If you care to share data - please do. I will change the names of the innocent if needed - I just want to make sure I put out real data.