How to make money off the growing data storage industry
To enter BLACKIRON Data’s local facility, one must pass an iris eye scan, tap in with an identification card and then enter a one-person mantrap – meaning only one individual can proceed at a time.
BLACKIRON is a new division of Primus Canada, which is expanding its push into data centres and rebranding that segment to avoid confusion with Primus’s reputation as a telecom company.
Some of the data centres’ walls are being painted black over Primus’s signature blue. Signage will soon be replaced on all eight Canadian facilities.
That number may soon reach nine. With two data centres in Ottawa – one at capacity and another filling up – BLACKIRON executive Ron Ethier says the company is in the process of looking for a third local location.
“We have made a commitment and we are actively expanding. We have plans to keep up with the market in Ottawa,” said Mr. Ethier, who is vice-president of data centres and managed services at BLACKIRON.
But beyond the obvious, what is driving the growth in the data storage industry, and why are so many facilities popping up in Ottawa?
The more information-dense and compact IT infrastructure becomes, the more power is required to run it – and the more overheated the equipment becomes.
Because of its cool climate, many U.S. and international firms are looking to Canada to house data, taking advantage of green initiatives such as using free cooling (read: using outdoor air) to keep data from burning up.
Businesses often shy away from the United States because of its Patriot Act, which permits law enforcement officials to access personal records for anti-terrorism investigations.
That makes Canada a great market for data security – and Ottawa is one of its hotspots because of its central location and access to IT suppliers.
Ottawa is “absolutely one of the strong markets in this country,” Mr. Ethier says. “That’s why we’re here.”
Storm Internet Services Inc. operates a local data centre and recently spent almost $100,000 to upgrade its server platforms in order to take up less space and use less cooling and power.
The small firm’s 37 employees and customers don’t need biometric scans to enter the building because staff know each person by name, says Storm Internet CEO Dave Chiswell.
Granite Networks also sees Ottawa as a burgeoning market for data centres. The company, which has been incorporated since April 2012, says it now serves more than 40 large customers and has observed an increasing number of companies that want to store mission-critical data in a secure facility.
No system is ever foolproof, but data centres need to come as close as possible, says Granite CEO Rainer Paduch. Every bit of technology needs to be fully redundant in case one part fails.
While the sheer volume of data requiring storage continues to grow, it’ll be the data centres already in operation that fill the void, not new entrants, Mr. Paduch says.
“It would be highly unlikely for a new startup to be able to put the money into a new $10-million facility,” he says.
HOW TO GET INVOLVED
Every data centre involves dozens of suppliers putting together a full solution. That includes cooling systems providers, backup power suppliers, electricians and general contractors.
Supplying data centres is how Diligens Inc. has been making money for more than a decade.
The local company provides equipment including uninterruptable power and cooling systems, as well as the software and maintenance required to run them.
“When I first started in this, you could shut down a data centre regularly to do maintenance,” says Walton Johnston, a Diligens executive who’s been in the industry 30 years. “Now, you can’t shut down ever.”
He says he’s seen the technology become smaller, more efficient and more redundant than ever before. Software can instantly tell you what’s going on in the data centre – where there is or isn’t sufficient cooling, power or network capabilities. In the 1980s, such information could have taken up to two weeks to determine, Mr. Johnston says. That intelligent software is one of the solutions Diligens offers to clients.
NEED FOR SECURITY
In the future, every industry will find itself searching for secure data storage solutions, BLACKIRON’s Mr. Ethier says.
“A lot of companies might not think they’re an IT company, but they require so much IT all the time,” he says. “Even if you’re a taxi dispatcher or a fuel delivery company, everything you do is electronic. Their reliance on electronics is so high that if the infrastructure stops working, their business stops running.”
Future data centres may see higher environmental standards become necessary in order to open for business, Mr. Ethier says. Today, LEED and other certification programs are sought out by many customers, but they’re not required. In a few years, that could change.
As cloud technology evolves, clients will have less of a requirement to physically visit data centres for maintenance – a factor that means companies won’t have to shop locally. That’s what Strahan McCarten, a Bell Canada executive, thinks will precipitate a shift in the industry.
Additionally, data centres will likely be built in clusters, he says. If there are problems in one building, there would be redundant data housed in others.
And with ever-changing weather patterns, it will only be a matter of time before most businesses come running, says Storm Internet’s Mr. Chiswell.
“With the crazy weather we’re getting these days, people are very cognizant of the fact that, ‘Geez, what happens if I get a power surge?’ And they turn it over to the pros to handle it.”
BELL CANADA LAUNCHES LOCAL DATA CENTRE
Bell Canada is the newest entrant into Ottawa’s data centre sector, with a 100,000-square-foot facility that opened on Jan. 1.
The nondescript building, which is within half an hour of downtown at an undisclosed location, uses many energy-saving technologies such as collecting rainwater to use in the facility and a highly efficient cooling system.
“The facility from the outside doesn’t actually look like much, but inside it’s got lots of technology to run a highly efficient data centre,” says Strahan McCarten, Bell’s director of product management for hosting and cloud computing.
Bell has plans to expand its Ottawa facility when it fills to capacity. The current building was designed to be able to extend beyond its current footprint, Mr. McCarten says.
While local suppliers don’t play much of a role in its facility, the proximity of multiple data centres is a sign that the sector is booming in Ottawa.
“The presence (of a data centre) is good for the IT sector, in the same way that it’s good to have a movie studio in an area (where there’s a film industry),” he says. “It means there’s enough of a mass to support it.”
The North American cloud computing market is growing at 62 per cent annually, and managed hosting is growing at 21 per cent.
The amount of data that enterprises manage is expected to increase 50 times within the next decade.
Source: 451 Research, International Data Corp.