“Our next billion users are not in the U.S. and Europe.” iMasons Advisory Council members discuss the opportunities – and challenges – awaiting them in emerging markets.

At our most recent Advisory Council meeting, there was consensus among the members (five end users and eight partners) that rising demand in emerging markets poses new challenges, and requires new approaches from data center providers.

More demand, more challenges

Demand is rising everywhere, the advisory council members agreed, but the rise is more significant in markets outside the U.S. and Western Europe. As one partner put it, “The cloud will follow the eyeballs to emerging markets.”

Rising demand in those markets is more challenging, too. Challenges include a lack of connectivity and unreliability of the power grid. These are markets far different than what hyperscale companies are used to building in, which makes scale harder to achieve. These challenges beg new thinking around how to expand data center footprints in emerging markets.

“The cloud will follow the eyeballs to emerging markets.” – Click to tweet

Connectivity

One partner said he is thinking a lot about emerging markets, and the challenges they pose to hyperscale companies. One source of challenge is monopolized telecommunications environments. “The kind of deregulated telecommunications environment that has made transit essentially free in the United States (and has been a boon to companies like Netflix, a big beneficiary of peering) largely doesn’t exist in emerging markets, where one telco typically has a monopoly on the whole network,” he explained.

“Is there a role that Infrastructure Masons could play as a collective to help develop network connectivity and peering in emerging markets, to replicate the U.S. model there?” he asked. “One of the things I think iMasons is uniquely positioned to do is go collectively to emerging markets and say, ‘These are the things we’re looking at on fiber, grid, peering, etc.’ These emerging markets are eager to support data center infrastructure but they don’t know how.”

Reliability

Another source of challenge is the unreliability of the power grid in many emerging markets, especially considering the loads that a hyperscale data center would bring. One partner explained, “On the demand side, data center loads are more dynamic, as servers are increasingly designed to follow utilization, using less power when utilization is lower. That is even truer when talking about regionally placing cloud loads – putting a cloud in a smaller country specifically for local capacity. Then loads will really fluctuate on the demand side.”

“Considering the loads a hyperscale data center would bring, power reliability is a key challenge in emerging markets.” – Click to tweet

There’s a challenge on the supply side as well. One partner explained, “Increasing reliance on renewable sources like wind and solar and increasing desire to transport green energy from grid to grid creates a lot of variability in supply.” Variability in demand combined with variability in supply makes it hard to balance loads. And when supply and demand are out of sync then frequency goes up or down – something most data centers are not well equipped to handle.

Consider the size of a data center power load relative to total power loads in an emerging market and the challenge is even clearer. “India, for example, has one-tenth the energy density of the U.S. And, thus, one-tenth the water and power infrastructure,” one partner explained. Yet there are ten times as many people there – ten times as many potential Google searches and Facebook posts and Azure instances. It’s not only India, of course. “Egypt has 3 MW of data centers today. If we go in and put a 100 MW load, there is not a model for that.”

“So that’s a headwind for data centers going into those markets.”

“The huge imbalance between existing supply of infrastructure and potential demand in emerging markets is the crux of the challenge.” – Click to tweet

One partner explained that his company is working to “make the data center capacitive, so it can be a buffer between supply and demand.” He explained, “The data center can latch onto the grid as soon as we see an issue. When we see frequency fall early on we latch onto the grid and work with the grid to correct it. If we can’t correct it we disengage from the grid and go on permanent generation. So we can predict when there’s going to be a grid outage and brace for it.” He added, “Traditional one lines are not going to work in emerging markets. So we’re pushing storage and generators to be capacitive.”

Another partner shared a similar idea: “I co-authored an op-ed a while back on uninterruptable power as a service – energy as a service. We have commitments for renewables. Can we go to semi-autonomous energy generation? What does that model look like? It’s a utility infrastructure play.”

Wanted: A new approach

The typical size of data centers has increased dramatically. It used to be that 2-3 MW was big. Now 50-100 MW is not uncommon. As one partner explained it, “The whole philosophy of designing and operating data centers has changed.” How so? “Economies of scale have dramatically altered the way facilities are constructed. New technologies for power, cooling, and network as well as Open Compute Project (OCP) have played major roles in the way these facilities are designed, built, and operated.”

Yet as another partner explained, “the approach that works for building a 100 MW data center in the U.S. doesn’t work in emerging markets. Even cloud players that have economies of scale building hyperscale data centers in the U.S. may face challenges in emerging markets.” That makes a new approach – tailored to the particular challenges and opportunities of emerging markets – essential.

Come back next week for the 6th installment in our top-of-mind series and hear from the Advisory Council members on alignment between IT, facilities, and the business (yep, it’s still a challenge).

Previous posts in the top-of-mind series

The Biggest Challenge of All? People

Our Environmental Legacy

Shifting Power & Shifting Priorities

Just How Critical Is Our Critical Infrastructure?

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