Data centers have been around—well, essentially forever, or at least since the dawn of computing. But just because they’ve been around forever doesn’t
mean they’ve endured unchanged. In fact, we’re smack in the middle of a radical shift in data‐center architecture, design and operations.

Table of Contents
1 EXECUTIVE SUMMARY.................................................................................................. 4
2 THE NEW DATA CENTER .............................................................................................. 5
2.1 OVERVIEW..................................................................................................................... 5
2.2 KEY THEMES.................................................................................................................. 6
2.3 TOP CHALLENGES......................................................................................................... 8
2.4 TOP FUNDED INITIATIVES .......................................................................................... 10
2.5 AVAILABILITY.............................................................................................................. 13
2.6 CONSOLIDATION......................................................................................................... 15
2.7 NEW CONSTRUCTION................................................................................................. 20
2.8 FACILITIES UPGRADES ................................................................................................ 23
2.9 REPORTING SUCCESS .................................................................................................. 25
2.10 MANAGEMENT AND STAFFING.................................................................................. 26
3 CONCLUSIONS AND RECOMMENDATIONS....................................................... 29
4 APPENDIX A ‐ BENCHMARK METHODOLOGY................................................... 33
4.1 PROCESS....................................................................................................................... 33
4.2 BY INDUSTRY............................................................................................................... 34
4.3 BY SIZE......................................................................................................................... 35
4.4 PARTICIPANTS ............................................................................................................. 37
4.5 TIMEFRAME ................................................................................................................. 38
4.6 DISCLAIMER ................................................................................................................ 39

Table of Figures
FIGURE 1: TOP DATA CENTER CHALLENGES................................................................................ 9
FIGURE 2: TOP FUNDED INITIATIVES........................................................................................... 11
FIGURE 3: NUMBER OF DATA CENTERS ...................................................................................... 13
FIGURE 4: HAVE YOU CONSOLIDATED DATA CENTERS IN THE PAST 12 MONTHS? ................ 16
FIGURE 5: CONSOLIDATION BY NUMBER OF DATA CENTERS.................................................... 17
FIGURE 6: WILL YOU CONSOLIDATE DATA CENTERS IN THE NEXT 12 MONTHS? .................. 18
FIGURE 7: FUTURE CONSOLIDATION BY NUMBER OF DATA CENTERS ..................................... 19
FIGURE 8: WILL YOU CONSTRUCT NEW DATA CENTERS IN THE NEXT 18 MONTHS?............ 20
FIGURE 9: WILL YOU CONSTRUCT NEW DATA CENTERS? ‐ BY PAST CONSOLIDATION ......... 21
FIGURE 10: WILL YOU CONSTRUCT NEW DATA CENTERS? – BY FUTURE CONSOLIDATION.. 22
FIGURE 11: DATA CENTER YEAR OF CONSTRUCTION................................................................ 24
FIGURE 12: HOW DO YOU RATE YOUR DATA CENTER ARCHITECTURE AND STRATEGY?...... 25
FIGURE 13: WHO MANAGES THE DATA CENTER? ..................................................................... 27
FIGURE 14: TYPE OF COMPANY ................................................................................................... 35
FIGURE 15: ANNUAL REVENUE ................................................................................................... 36
FIGURE 16: IT BUDGET ................................................................................................................. 36
FIGURE 17: NUMBER OF EMPLOYEES........................................................................................... 37
FIGURE 18: PARTICIPANT TITLES................................................................................................. 38

Executive Summary
Data centers have been around—well, essentially forever, or at least since the dawn of computing. But just because they’ve been around forever doesn’t
mean they’ve endured unchanged. In fact, we’re smack in the middle of a radical shift in data‐center architecture, design and operations.

Nemertes’ groundbreaking benchmark, “The New Data Center 2006,” details these changes and their impacts, highlights critical issues for IT executives to keep in mind, and provides best practices and success strategies for organizations seeking to deploy and leverage this new data center.

In Volume 1, we examine the overall state of the data center, uncover the
four major themes of consolidation, explosive growth, always‐on availability and operational efficiency/automation.

In Volumes 2 through 7, we look at the six disciplines of the data center
and the major trends in each:

• Computing – Major trends such as virtualization and dense computing.
• Storage – Extreme growth in storage demand and storage virtualization.
• Networking – Optical interconnects, high‐speed server interconnects and more reliance on the WAN to deliver applications.
• Facilities – Power and cooling for dense computing and storage.
• Management – Business service management, Web services, ITIL and CMDB.
• Security – Re‐trenched perimeter, mobility and identity.

Finally, in Volume 8, we examine best practices, strategies for success and
Nemertes recommendations.

Benchmark Methodology
To compile the 2006 New Data Centers benchmark, we conducted in‐depth interviews with 82 IT professionals at 65 organizations across a wide range
of commercial industries and government, education, and not‐for‐profit firms.

We spoke with the individual or individuals at participant organizations
whose primary function and overall responsibility lay within the areas of data center architecture, design or operations. We conducted in‐depth interviews with all the participants, ranging in duration from 45 minutes to two hours. We did not provide a list of questions to participants ahead of time. We did ask a list of pre‐planned questions to ensure consistency across interviews. However, many questions are open‐ended, to give our participants the chance to provide their own unbiased insights and observations. In particular, we asked open‐ended questions about best practices, strategic goals, business drivers, vendor experiences and challenges. We also asked participants to describe their organizational and operational structures, and the position of data‐center operations within the context of their overall IT and business goals. As a result, individual interviews varied in degree of insight provided for each topic, based on the interest, time and expertise of the participant involved.

We guarantee confidentiality and anonymity for participants and their
companies. As a result, the report is able to include exact quotations, with no changes in context or wording, discussing directly sensitive topics like vendor relations. All quotations are direct from benchmark participants, whom we identify only by title and/or industry affiliation, or in some cases simply as IT executives of manager.

In compiling the various charts and diagrams in this benchmark, we
tabulated all responses to a given question. Since not all participants responded to all questions, the actual number of responses varies by question.

In parallel with IT executive interviews, we contacted manufacturers of
datacenter technologies, inviting them to participate in interviews to better articulate their products’ features and functionalities. We also did vendor research on the Web. With the exception of the participant ratings, the vendor information provided here comes directly from the manufacturers, and Nemertes makes no claim to its accuracy.

By Industry
To provide as broad a perspective as possible, we deliberately sought to
reach the broadest possible range of industries. The largest industry represented is healthcare, with just under 20%, followed by financial services (which includes retail and investment banking and insurance companies), and manufacturing, each at just over 15%. None of the other industrial sectors accounted for more than 10%.

Figure 14: Industry Vertical

By Size
As noted, we sought insight from a range of organizations at a variety of
different sizes. These organizations are primarily mid‐ to large‐size companies with annual revenues exceeding $100 million. Just over 50% have revenues less than $1 billion, while 21% have revenues that exceed $10 billion. The median annual revenue of benchmark participants is $847 million with a mean of $5.02 billion.

Figure 15: Annual Revenue

That translates to a lot of IT spending. Median IT budget among our participants was $13.25 million, with a
mean of $145 million.

Figure 16: IT Budget

Another measure of the company size is number of employees. About 66% of benchmark participants had between 1,000 and 100,000 employees, with a mean of 23,977 and a median of 5,000.

Figure 17: Number of Employees

Participants
In selecting individual participants, we asked to speak with the individual or individuals most closely associated with data‐center architecture, design and operations. Participant job titles include Chief Information Officer, Chief Technology Officer, and VP, Director, Manager, Consultant, and Engineer.

In terms of overall seniority, about 20% of benchmark participants were CTOs or CIOs. Another 25% were vice presidents or managing directors. The bulk of the remainder—47%—were directors and managers of data‐center operations.

Figure 18: Participant Titles

Timeframe
We conducted interviews from January to March 2006, in many cases
augmenting the pre‐planned benchmark interviews with email exchanges and
preliminary or follow‐on questions. We asked participants to provide insight into current and ongoing data center initiatives as well as those planned for the next three years (though most plans reflect a six to 18 month timeframe).

Disclaimer
Throughout this benchmark, we use phrases such as “we believe” and
“we recommend.” These represent the beliefs of Nemertes’ principals and should not be construed as legal counsel. Research services are provided by Nemertes “as is,” without warranty of any kind, and Nemertes expressly disclaims all warranties of any kind, whether expressed or implied, including, but not limited to, warranties of merchantability and fitness for a particular purpose. Where appropriate, we strongly urge readers to seek independent advice from qualified legal counsel.