In the good old days (late 90s and most of the 2000s) data center operators loved selling individual cabinets to customers. You could keep your prices high for the cabinet, sell power by the “breakered amp,” and try to maximize cross connects through a data center meet me room. All designed to squeeze the most revenue and profit out of each individual cabinet, with the least amount of infrastructure burden.
Forward to 2010. Data center consolidation has become an overwhelming theme, emphasized by the US CIO Vivek Kundra’s mandate to force the US government, as the world’s largest IT user, to eliminate most of more than 1600 federal government owned and operated data centers (into about a dozen), and further promote efficiency by adopting cloud computing.
The Gold Standard of Data Center Operators hits Speed Bump
Equinix (EQIX) has a lot of reasons and explanations for their expected failure to meet 3rd quarter revenue targets. Higher than expected customer churn, reducing pricing to acquire new business, additional accounting for the Switch and Data acquisition, etc., etc., etc…
The bottom line is - the data center business is changing. Single cabinet customers are looking at hosted services as an economical and operational alternative to maintaining their own infrastructure. Face it, if you are paying for a single cabinet to house your 4 or 5 servers in a data center today, you will probably have a much better overall experience if you can migrate that minimal web-facing or customer facing equipment into a globally distributed cloud.
More of the article from John Savageau at SOA