When multiple data centres make sense

Satellite data centres could offer substantial benefits

Power savings too

Another reason some companies use satellite data centres is the escalating cost of power, especially in New York and California.

Ken Brill, founder and executive director of the Uptime Institute in Santa Fe, sees a trend with data centre being located in a different state from headquarters, or even in another country such as India.

The Google and Microsoft model is to build server farms in states where energy costs are low, Brill explained. These sites do not always provide data services for the corporation itself -- in Google and Microsoft's cases, the server farms are intended to deliver improved performance for external customers. But Brill noted that even major data centres don't necessarily have to be located at a company's headquarters.

One Uptime Institute client that Brill declined to name is building a global data centre in a market where utility costs run only about 4 cents per kilowatt-hour. Compared with New York, for instance, which costs around 15 cents per kWh, that's a savings of $US30 million per year.

In general, Brill advises customers weigh the risks of data centre location carefully. Centralization reduces management and staffing costs, yet "the more centralized you are, the greater the consequences from a single event," he said. "The challenge for CIOs is to weigh the economies of scale with reliability."

Brian Babineau, a senior analyst at Enterprise Strategy Group in Milford, Mass., said that the main reason companies build regional data centres is to save power.

Further, Babineau said, when a company builds a new satellite data centre, the company typically uses it only for data, not for telecommunications. The customer leaves its existing equipment at the main data centre until it has moved to IP. When that happens, the satellite data centre can handle both voice and data, all in one space, making it more efficient.

An added benefit, according to Babineau, is that because the computing load can be spread among multiple locations, power bills can be reduced in each location, particularly if the satellites are in areas with lower power costs.

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