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Data Center Demand Up Since Delta Computer Fiasco

Delta's recent computer hiccup has gone a long way into feeding a surge in data center demand in Atlanta.


T5 Data Center's James Kwon—second from left with industry colleagues, including Ryan's John McClintock, Level 3 Communications' Brian Fox and QTS's Butch Goldi—says the $150M hit Delta Air Lines took for its Aug. 8 computer failure that caused more than 2,000 flights to be canceled has “scared the bejeezus” out of other companies.

That has prompted an uptick in data center demand in the metro area. Executives say, “if it can happen to Delta Air Lines, uh oh, it can happen to me,” James says. Now companies are searching for further redundancy in their data structures.


James was part of an all-star data center panel lineup yesterday at our 2016 Data Center Outlook, including Colo ATL's Tim Kiser (who moderated), Zayo Group's William Souder, Carter Validus' John Regan, QTS's Butch and Internap's Mike Higgins.

The demand is helping T5's Atlanta facility, which is now half-leased. T5 recently purchased a 208k SF Tier III data center in Elk Grove Village, IL, and now operates in eight US markets. John echoed the impact of Delta's outage, saying  the Atlanta airline giant proved “there's an inherent risk in putting all your eggs in one basket.”


The cloud has come into its own in recent years, with more companies ceding control of their data center operations and data management to third-party providers. But it's still not a one-size-fits-all approach, John says.

“One of the promises of cloud was that it was like this next step in virtualization,” he says. “It was basically going to bring us to this panacea of utility-type computing. I see us making a progression toward that...but I still think that's the panacea.

He says for some companies, certain data is just too sensitive to risk leaving it in someone else's hands.

“Do you think that Coca-Cola is going to stick their recipe up on cloud? Absolutely not,” he says. “They're going to put it someplace in an entity that they control.”


But despite security concerns, other panelists suggest even the most sensitive data will be on the cloud as companies become increasingly more confident. And for data center operators, that means meeting various federal and industrial security mandates—such has HIPAA requirements for healthcare—is “becoming a new metric of measurement,” Mike (here) says.

William also says demand for the cloud is ever increasing, and an essential business vertical for data center operators to be in. That's especially true as apps for mobile phones proliferate. Those app developers often use cloud services instead of hosting all that data and software on their own. “If you're in the cloud business, you're winning,” William says.


With hacking on the forefront of the media's attention today, our panelists say the problem with Black Hat hackers is twofold: human error and client refusal to spend more money on security.

“A lot of the breaches are the result of a human mistake,” William says, noting that reputable data center operators are completely transparent when breaches do occur to demonstrate what exactly was taken and how deep the penetration occurred. And those human mistakes can even be intentional. “There's no way to rule out the human factor,” he says.


Butch says people also need to protect their bandwidth—the actual fiber cable—because many breaches occur there.

And customers are not helping things by trying to cheapen their online security measures, refusing to pay a few extra dollars per megawatt for better protection with data center operators until something happens, “and by then, it's too late,” Butch says.