Friday July 10, 2020

Consumer culture drives growth of data centres

There’s more to the evolving and growing sector than massive power consumption and small workforces

3rd March, 2020

It‘s fair to say that data centres have had a bad press of late. Ireland’s data centre sector is one big drain on our society, its critics say. Large multinational companies come to Ireland, pay little or no tax, and build great big ecologically-unfriendly warehouses that devour power from the national grid and employ tiny numbers of people.

Not so, say those in the industry who listened as similar arguments were made during the recent general election campaign. Yes, it’s true that data centres are big consumers of power – Eirgrid has estimated that by 2028, data centres and other major users of power will account for 29 per cent of Ireland’s total electricity usage.

But the vast majority of data centres are heavily invested in improving efficiency, reducing the amount of power they use, and where possible using renewable sources of power.

Overall, there are more than 50 large data centres in Ireland, with Microsoft, Amazon and Google just some of the international names located here. According to reports, ten more are under construction and a further 31 have planning permission in Ireland.

“There’s a very strong one-dimensional view out there among some people that multinational tech companies come here and build big, environmentally-unfriendly data centres that suck power out of the national grid and that’s all they do. But we need to look at the net benefit they bring to Ireland Inc,” said Jason Monks, director with StructureTone, a company that specialises in data centre provision and fit-out.

“Data centres consume power because consumers consume data. We are all consumers and the reality is that, as consumers, we can’t get enough of data. Whether it’s Facebook, Twitter, social media, RTÉ Now, the Business Post online, apps or whatever – this is only going to get more prevalent. All that data has to be stored somewhere and the process of facilitating it has sparked a new industrial revolution. Ireland is at the heart of that.”

Jason Monks, director of StructureTone: “There’s a very strong one-dimensional view out there among some people.”

Monks said that while data centres tend not to get good press, the fact is that they are contributing to the construction and deployment of renewable energy projects within this country.

“Look at Facebook - it has a partnership with a development in Kerry to provide power generated by wind farms. It’s not coming from oil, gas and turf. If you look at most of these guys, they have legitimate green credentials in terms of their footprints, because their investors are looking for that in the companies they invest in,” said Monks.

“Eirgrid launched a five-year strategy last year that will see 70 per cent of all electricity used in Ireland by 2030 coming from renewable energy sources, and at the same time data centres will continue to use the power they draw more efficiently.”

Monks argued that the data centre economy in Ireland is extensive and takes in not just those facilities built, those currently under construction or those at the planning stage, but also those companies in the downstream economy that support and supply data centres.

“We started building data centres back before the dotcom boom in around 1998 or 1999. Those facilities have gone through life cycle changes and in the last few years they’ve been retrofitted with new kinds of technologies, things like more efficient generators, different cooling technologies and so on,” he said.

“Back in the day, we used to use gas-based technology to cool data centres but now we use air. Most of the hyper scale activity in Ireland, the likes of Google, Microsoft, Facebook and AWS and so on, they’re all implementing either indirect air cooling or air cooling.”

These systems use less power as they don’t require large cooling engines, instead using ambient air conditioning to cool facilities down. “Things are a little different in the smaller retail co-location sites but at hyper scale, utilisation of air has been a big change,” said Monks.

The jobs network

And then there is the question of jobs.

“What doesn’t get much press when people see data centres being constructed is the amount of jobs being created both locally and down the supply chain, whether it’s companies in manufacturing parts, people fitting buildings out and so on,” Monks said.

“Some of the biggest providers of data centre infrastructure globally are located in Ireland and ship their products around the world, based off the industry experience they’ve gained locally. There is an entire ecosystem of companies providing manpower and services to the data centre sector.

“They may only be on site for a week at a time at each one, but they frequently spend six months developing the infrastructure off site that they then fit. People often miss that the growth here isn’t just in buildings, it’s in services too.”

Michael Conway of Renaissance said that power consumption in particular of data centres has to be seen in context.

“Data centres get a bad reputation because they are absolute animals when it comes to consuming power. But they concentrate the computing and storage of thousands of companies in one place. Do they consume more power relative to what they do than if their functions were being carried out in other ways? I suspect not,” he said.

“I think they’re probably relatively efficient when compared to the alternative. But people tend not to do that – they look just at the energy footprint and think it’s enormous. But the reality is that this activity would be happening in other ways and in other places even if it wasn’t concentrated in Ireland.

“If you’re providing air conditioning for one facility, that’s a lot more efficient than air conditioning 100 computer rooms in other locations. Don’t get me wrong, they’re not green, but that’s because they are a concentration of the use of power.”

International importance

From a security and access to facilities point of view, the concentration of various companies’ data into centralised sites results in several advantages for the end user.

“You get better, more secure and better monitored environments than you would otherwise be able to access. It’s also true that from an Irish point of view, our location as a hub for data centres makes us quite important,” Conway said.

“Nobody would otherwise really care if the power goes down in Kerry or Cork from a global point of view. But if power goes down in a data centre here it can cause international disruption, and that makes us more important at a global level than we otherwise would be.”

On average, Conway believes that it’s better to have a concentration of data centres here than not, taking all things into consideration.

“It makes us attractive from a data sovereignty point of view. We’re close to the US relatively speaking, we’re English-speaking and we’re a stable democracy. For Ireland Inc, I think the number of data centres here is a good thing. Yes, there are downsides but there are advantages too,” he said.

Seamus Dunne, managing director of Interxion, said that casual observers of the sector don’t appreciate that there are many different kinds of data centres, from small to massive, and they all have different characteristics.

“Take the massive hyper-scale data centre – that’s typically what people think of when they visualise a data centre, a large warehouse with racks and racks of servers using 50, 60 or even in some countries 100 megawatts of power. There are basically two reasons why they exist. The first is business-to-consumer platforms like Facebook and Twitter, and the second is cloud computing,” said Dunne.

Seamus Dunne, managing director of Interxion: cloud computing is driven by software as a service providers such as Salesforce and cloud service providers such as Amazon Web Services.

“Cloud computing is driven by software as a service (SaaS) providers such as Salesforce and then there are cloud service providers like Amazon Web Services, Google and Microsoft. That’s hyper-scale, but most of our focus in Interxion is on smaller outfits.

“The main thing I work on is asking the question how should enterprises best run their IT systems? The answer to that is that they need speed and agility – there is no business from banking to insurance to oil and gas that doesn’t need digital transformation. That usually means hybrid cloud, the combination of some on-premises technology and some run in the cloud.”

According to Dunne, for companies in Ireland the single worst data decision they could make is to build or even own their own data centre. It just doesn’t make sense.

“The best solution is to move what you can to an enterprise-grade co-location data centre and run your IT from there. The reason why this is a good idea is that we have points of presence built up so you can access the best providers in the most efficient way possible with the least latency and the most cost effectiveness,” he said.

“Microsoft, AWS and about 70 telecos and sub-sea cable providers have put their access points in our data centres. We build the network fabric of the data centre around that so when someone joins they can run their hybrid cloud out of our data centre.”

The power dynamic

Interxion claims that 100 per cent of the energy it uses in operating its network of data centres comes from renewable sources.

“We only run on renewable energy and our centres are massively efficient. Unless data centres are your core business, the least efficient way to run things is to own your own. It makes much more sense to free up your capital and rent space. Let us worry about maintaining the infrastructure while you focus on your business applications,” said Dunne.

According to Dennis Nordon, managing director of Hanley Energy, it can be helpful to think of a data centre as being “a bit like an operating theatre in a hospital”. The reason? Neither can afford to lose power and experience downtime.

“Power must be on all the time, because as well as hosting social media and other applications that might not be absolutely critical, data centres also host banking, security and other applications such as mobile phone systems that can’t go down. So downtime isn’t an option,” he said.

Dennis Nordon, managing director of Hanley Energy: “Every piece of electrical equipment that goes into a data centre is evaluated for efficiency.”

Data centres in Ireland typically consume from ten megawatts of power – described by Nordon as small – up to between 60 to 80 megawatts of power.

“The exact amount depends on location and who the end users are. Some are much larger but not in Ireland,” he said. “We’re in the process of building out a 300-megawatt location in the US that is going to be completely powered by hydroelectricity. Likewise, we have a project in Sweden that is similarly powered by all hydro power.”

It’s in everyone’s interest, Nordon said, that data centres become as efficient as possible.

“Ten years ago, the idea was get the building built and get the power on at any cost so your servers could get up and running. It didn’t really matter what the inefficiencies were. However, today things are totally different,” he said.

“We’re now dealing with younger engineers and more ecologically-aware companies, and the focus is on total cost of ownership. Every piece of electrical equipment that goes into a data centre is evaluated for efficiency. Price and availability are no longer the sole criteria that we use to judge these things, efficiency is right up there.”

Nordon offers the example of a 2.5 megawatt transformer. A data centre operator might evaluate two or three different manufacturer’s offerings when decide which to buy.

“If two of them are operating at 8 per cent efficiency and one is at 6 per cent, then that’s the one they’ll buy. The 6 per cent one might be more expensive but nine times out of ten, the data centre operator will buy that one because they’ll work out the total cost of ownership over time, and it might save them hundreds of thousands of euro per year,” he said.

According to Nordon, the idea that data centres don’t employ people in Ireland is a major annoyance to him.

“This got rolled out in the last election, that data centres don’t employ people, that they’re just big empty boxes that consume energy and have six people running them. That’s not true. Over the last ten years there’s been an explosion of data centres in Ireland and they employ thousands of people, and not just in short-term construction projects but in long-term service and maintenance contracts,” he said.

“It’s a huge industry and many people don’t understand that. We alone employ 145 people here and that means that we support a lot of families and extended communities. And that’s not including the supply chain of companies we’re dependent on, and we’re just one company. There are multiple companies out there of a similar size to us.”

Dealing with the data explosion

Meanwhile, the kind of technology going into data centres is changing, based on the changing requirements of companies dealing with a data explosion in the market.

John O’Donoghue, Solution Consultant for the Data Centre Computer Group, Dell Technologies Ireland, believes that a lot of the growth taking place in the data centre sector is being driven by companies looking to extract more value from their data.

“A lot of companies are investing more into different types of computational platforms so they can apply analytics on high-performance computing. They want to gain insight from larger and larger sources of data,” he said.

“Many companies are also focusing on the management and operation of internet protocols, with more and more people trying to run a cloud-like operating model from their data centre. They’re trying to change from traditionally siloed management to having more of a holistic approach in how they manage data centres. They’re doing this to drive further innovation.”

One interesting trend that has taken place over the last 24 months has been the increase in the use of graphics processing units (GPUs), originally designed to process graphics for gaming and video editing. These cards frequently operate at the fastest end of the processing spectrum, and are often used for applications for which they weren’t designed.

“There are huge amounts of investment going into GPUs for the last 24 months. GPUs are quite expensive, with the main providers being companies like Nvidia and AMD but they’re being used for machine learning and deep learning,” said O’Donoghue.

“That’s one of the great things about GPUs – they’re so versatile. Increasingly they’re actually being called general purpose units instead of graphics processing units because there are so many use cases for them past just rendering graphics.”

In the world of artificial intelligence, O’Donoghue says there is also an interesting development in the form of the appearance of intelligent processing units (IPUs).

“These are new cards that have been built from the ground up where the silicon is built specifically to run machine-learning and deep-learning applications. They can be accelerated further and faster than previous cards. It will be exciting to see what the potential is.”

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