3Par, a Fremont, Calif.-based maker of storage arrays for data centers, pre-announced lowered earnings for the first quarter of its fiscal year 2009 yesterday, blaming, among other things, the fact that customers don’t have access to the electricity needed to add 3Par gear to their data centers. Data centers, those guzzlers of energy, are now running up against the limitations of the power grid in major metropolitan markets. The need for megawatts has affected the data center industry as power costs and savings have become a big topic. For example, earlier this month, the National Security Agency said it will locate a new data center in Utah after tapping out the power grid in Maryland, where its current data center is located. That same demand for energy at other data center customers is now causing 3PAR delays in recognizing revenue from customer wins.
Yesterday evening, the company said it now expects its revenue for the fiscal first quarter to come in at $44 million, down from a previous forecast range of $48 million-$50 million. 3Par CEO David Scott on a call with analysts and investors blamed power limitations in many large metropolitan areas, saying, “The number of accounts where power availability was the real constraint was quite significant…” Insufficient power delayed installation of 3PAR’s equipment by a few weeks, if not a few months. If power limits are affecting other data center equipment suppliers, it’s likely that the smaller vendors will feel the pain more acutely than larger ones.
have seen similar issues, the flight of the data centers from California being the most prominent – actually just linked you in on a related piece I was putting together… http://www.douglasgourlay.com
Douglas, nice post. For better or worse, I don’t see our demand for data centers decreasing even as some companies send information to others’ clouds. Even if we make them more efficient we still want more and more of them. It’s like switching to low-fat ice cream, but then sucking down the whole pint rather than a scoop.
Isn’t some of the Recovery and Reinvestment Act money earmarked for upgrading the electrical grid? You’ve done some stories about the money earmarked for broadband, maybe you need to dig in to this subject as well.
For data center equipment suppliers, a key issue is whether installing their gear reduces the overall energy footprint or adds to it. Many vendors are emphasizing the energy efficiency of their new products, with the pitch that ROI is realized by managing the same amount of data using less gear and/or a smaller data center footprint.