Creative Destruction and the Data Center or,

Will I Still Have a Job in Five Years?Chris Crosby, CEO, Compass

Datacenters

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Who We Are

• Compass Datacenters provides dedicated, hardened data centers

• Built using our patent pending architecture• Uptime Institute Tier III certified design and constructed• LEED certified

• Wherever you want it• Controlled by you

• Ownership or lease• Operations and security• Expansion

• Simplify Capacity Planning• Growth in 1.2MW Increments• The building is the module

“That’s Not Modular. That’s a Building”

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The Evolution of an Industry

The False StartFounded

FoundedFounded

Founded

IPO

IPO

First Container

The Wild West

Attack of the Acronyms

Initial mentions begin

Everybody into the pool

1990 2000 2010

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Where We Are Now

• We create a lot of data• 15 petabytes of new data created every day• 90% of today’s digital data created in past 2 years (IBM)• 145 billion emails sent per day• 75% of today’s data generated by individuals

• Enterprises will ultimately have liability for 80% of it

• In the future—We’re going to create a lot more

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Where We Are Now

• Context• Fortune 500 companies account for ~⅔ of US GDP of$16T

• Questions• How many of these

enterprises will have private clouds?

• Who supports these companies?

• Death of the server closet?

$0 $2,000 $4,000 $6,000 $8,000

$10,000 $12,000 $14,000 $16,000 $18,000 $20,000

2012 2013 2014 2015 2016

Software as a ServicePlatform as a ServiceInfrastructure as a Service

CAGR 29%

CAGR 41%

CAGR 37%

Cloud Computing Market Forecast: Revenue ($M)

451 Research: Market Monitor

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What’s Next?

• So, does everything wind up in the cloud?• No, technically speaking the cloud can’t exist without data centers

• Functional roles become clarified

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Commodity Apps

ProprietaryApps

CriticalApps

EX: TestDev, Web

EX: “Mainframe”

EX: Financial

PUBLIC CLOUD PRIVATE CLOUD TRADITIONAL IT

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What’s Next?

Data centers become BIGGER

and Smaller

Leave the Googles and Apples out of

the discussion

Homogeneous environments

Unique requirements

Distributed “architectures”

will emerge

Data center volumes

Latency requirements

push processing requirements to

the edge…literally

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What Next?

• Certifications and standards will become more important• Importance of data, user expectations increase reliability

requirements

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What Next?

• Customization• Industry legacy• Start with a whiteboard each time• Will fade as a requirement

• Too expensive for all but biggest sites

• Industrialization• Introduced by Digital Realty in 2006• VPAs, Standard designs• Some repeatability, supply chain• Will hold serve amongst the larger MTDC providers

• There model can’t adapt• Will compete on services

• Productization• Complete solution – integrated supply chain• Serves a well-defined segment of the market• Drives out cost, time through lean• Increases quality, consistent operations• Includes features market wants as a standard• Small group of companies will make this jump

• Will dominate on the edge 9

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What’s Next?

• What about SDN, SDDC and all those other acronyms?• Don’t hold your breath• More style than substance• Basic blocking and tackling has to come first

• How about just telling me what I’ve already got?

• Everybody’s got one• No standard• Need an HP OpenView for the data center

• Yes, it will probably require some sort of group/committee

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The Next Five Years

• 8-12 month pricing cycles continue with 10%-30% variance on pricing• Continued 20%-100% margin of delta of build costs

• Heavy Private Equity investment will lead towards an accelerated maturation cycle for next 5-years• Build-to-exit versus build to last• Four Seasons in Cancun• Public company investment: management for quarter versus the long run

• Companies get bigger ($1B+)• Consolidation and growth• Very large and niche with little to no middle tier

• New entrants from “real” companies• Verizon, Iron Mountain, IBM

• Differentiation through productization and specialization

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Summary

• Applications are driving demand• Private cloud

• Increasing awareness of first cost v. TCO trade-offs• It’s not just the metric but what it costs to get there• Greater focus on ROI on capital

• Forcing re-examination of “old” data center models• All things to all people• Death of dry cleaner mentality

• Next phase of evolution• Productized full featured, standard products

• More responsive to new customer requirements• More efficient, better ROI on capital

• Compliance and certification

• Consolidation is coming• Building/operating to exit v. Building/operating to last• “Real” companies entering market with long term visions• Plan of the “who is god” factor

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