Asia embraces datacenter leasing

Asian enterprises are more inclined to leasing data centers compared to their United States counterparts as many don't see the need to own them and don't have the luxury of time in waiting for these facilities to be operational.

This is the view held by Steve Flaig, director of marketing at Digital Realty Trust, who said that U.S. companies have a tendency to think that "no one can do it better" with regard to building their data centers, which is why they tend to own such facilities. Asian businesses, on the other hand, do not have such mindsets and are more open to leasing, he said.

Additionally, companies in the region also have a pent-up demand for computing power. He said: "[These companies] need capacity now. The usual project of [building one's data center] takes 2 to 3 years and that's too long [for them]."

Flaig's observation reiterated what company CTO Jim Smith highlighted in a ZDNet Asia interview last year. Then, Smith said that the pent-up demand for datacenter space stemmed from regional companies getting out of the 2009 recession relatively unscathed and was growing fast.

The marketing director added that the scene is gradually changing in the U.S. with more companies planning to lease datacenter space from a wholesale provider instead of building their own. According to its annual survey of the North American datacenter market, which was released in May, Flaig said 60 percent of the respondents plan to lease and this is an increase of 7 percent compared to last year.

Furthermore, the data center market is expected to grow, driven by new computing technologies such as cloud computing and virtualization, he stated. The survey showed that 85 percent will definitely or probably expand their data center in 2011, which is an increase of 4 percent compared to last year. Growth is also expected in the Asia-Pacific region, Flaig added.

Barriers to overcome
However, the director noted that employees, not security, are the biggest barriers to companies adopting the leasing model. He explained that these workers might feel that their jobs are threatened as leasing data centers might render their job scopes redundant.

Flaig stressed that loss of jobs is not likely to happen, though. "Growing computing demands and the need for companies to add data centers is more than enough work that no one is in danger of losing their jobs, although they might be in danger of being overworked," he added.

Kris Kumar, regional head for Asia-Pacific and vice president of corporate development at Digital Realty Trust added in a separate e-mail that when companies outsource datacenter space, their IT staff can leave the management of space, power and cooling to the vendor. With these responsibilities taken off their plates, employees can now focus on their core jobs of delivering IT services to the organization, he added.

As for security concerns, the executive said companies can save on costs for hiring security guards and biometric security when leasing data centers as these features are provisioned for by the provider.

Asked if connectivity is a challenge to the development of the regional wholesale datacenter market, he said it is only "somewhat of a challenge".

"When you look at a country such as Singapore, it has done so much to its telecommunications infrastructure. It is really not as big an issue as you might think," he said.