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D espite the steady flow of applications and workloads to public clouds, traditional datacen- ters sales – in most cases – appear healthy, although in a state of transformation. According to a survey of IT managers by 451 Research, almost three times as many companies plan to open new datacenters as plan to close them during the next two years. On the other hand, said 451 analysts, the percentage of companies that own and operate their own datacen- ters slipped from 63 percent last year to 57 percent this year, “evidence of the shift to public clouds, colocation, managed service providers and outsourcers,” said the research firm.  The main reasons for increasing datacenter rack space, said survey respondents, are new applications, security and internal clouds. The main reason for decreases is the shift to public clouds and other third-party alternatives. Reasons for Increasing Datacenter Space in Next Two Years New applications 37% Security 37% Internal cloud 35% Energy efficiency 27% Need more power capacity 24% Regulatory requirements 24% Disaster Recovery 23% Need more capacity in square feet 22% Connectivity issues 19% Cooling issues 12% Source: 451 Research The two primary drivers behind datacenter closures, meanwhile, are the fact that IT infrastructure transforma- tion enables consolidation and the migration to public clouds. In the 451 survey, 19 percent of the IT organiza- tions rent space from a colocation provider, and another 17 percent plan to within the next two years. About a quarter (23 percent) of companies plan to decrease their datacenter rack space during the next two years, while 32 percent plan to increase rack space (vs. 36 percent one year ago). The remaining 45 percent expect to maintain the current size of their datacenters. The top drivers behind the expansion of datacenter rack space include the deployment of new applications, security issues and internal clouds – much the same as the 2019 datacenter survey. At the same time, the main reason enterprises plan to shrink their datacenters include a shift of workloads to public clouds, managed hosting environments or private clouds. The main reasons for opening new datacenters are that enterprises plan to expand regional presence in growing markets or extend the organization’s global reach. Respondents also plan to open new datacenters to accommodate remote backup or disaster recovery. Smaller enterprises (or those with less than $1 billion in revenue) are twice as likely to open new datacenters than are large enterprises. The two main reasons for closing datacenters are that IT infrastructure transformation allows datacenter consolidation, or the enterprise is migrating to public cloud services. Reasons for Decreasing Datacenter Space in Next Two Years Moving workloads to public cloud 40% Moving workloads to managed hosting or private cloud 34% Virtualization 21% Need to reduce cost 21% Moving equipment to colocation 20% Consolidating datacenters 19% Energy efficiency 17% Excess capacity in datacenter 16% Regulatory requirements 12% Connectivity issues 11% Source: 451 Research Large enterprises (more than $1 billion) are more likely to close datacenters than are small companies, by a factor of about two to one. For about one-fourth of the companies, IT budget reductions are forcing datacenter closures. o Data Center Ups and Downs VIRTUAL REALITY 54 CHANNEL VISION | September - October, 2020