AFCOM: Data Centers Face Budget Cuts

More than a third of data center managers say they have been asked to cut their data center budgets for 2009, according new data from AFCOM, the industry group for data center professionals. The survey results, taken in late November, show that the economic crisis is having an impact on data center spending, but that any belt-tightening will be far from apocalyptic.

Thirty eight percent of managers surveyed by AFCOM said they have been asked to cut data center spending, with the average goal being a 15 percent reduction in the data center budget. Of those making cuts, 20 percent said they would delay or cancel a planned physical expansion of relocation. That equates to about 8 percent of all respondents.

Here's a look at AFCOM's breakdown of where managers say their cuts will be targeted:

afcom-2009

The areas taking the biggest hits are travel and training, which suggests 2009 may be a challenging year for data center conferences.

The two major industry conferences held after the financial crisis hit in mid-September were the AFCOM fall Data Center World in Orlando and the Gartner Data Center Conference in Las Vegas. Both shows were well-attended, but travel decisions were likely made prior to the Wall Street meltdown.

The economic downturn may be tough on corporate travel, but will likely boost video conferencing. Seventy percent of data center managers said they expected to increase the use of video conferencing to help reduce travel costs.  

The AFCOM survey also found that virtualization is a top priority for 2009, with 86 percent of managers saying they would virtualize to reduce the need for new physcial servers.

The data also showed significant resistance to software as a service (SaaS) and cloud computing. Just 12 percent of respondents expected to adopt SaaS for application hosting, while 22 percent said they would increase their use of cloud computing. Forty nine percent said it didn't fit with their current strategy, while 16 percent cited security as their key resistance point, and 13 percent said they were "not confident with service providers."

The responses, representing 133 large-scale data centers worldwide, were collected from Nov. 18-24 from managers who had previously participated in AFCOM research.