IoT Could Drive Micro Data Centers for Telcos

It is not, despite what many have hypothesized, trillions of non-sentient devices with unique IPv6 addresses logging onto the Web.  And it is this fact — that the Internet of Things would be a more clever architecture than a colossal hub-and-spoke topology — that testifies to its power to change the landscape of data centers.

IoT could, if it continues to develop the way it has, draw more compute, storage, and bandwidth power towards the edge — away from centralized facilities, and closer to where these various streams of data are being gathered.  Carsten Baumann, who manages North American operations for data center gear manufacturer Schneider Electric, believes that this could shift demand for resources away from “the cloud,” as we have come to know it, to become more geographically distributed.

Baumann will moderate a panel discussion on the broader topic of the Internet of Things’ impact on data center architecture, during a September 14 session at the Data Center World 2016 conference in New Orleans.

“If we look at the Gartner hype cycle of emerging technologies, we are apparently right at the peak [for IoT],” Baumann told us in a recent interview.  “The realism leads to the ‘trough of disillusionment,’ which we will enter.  If the Internet of Things is driving all this data, I believe we will see an increase in the need and demand for edge computing — edge data centers.”

Traditional data center providers such as Digital Realty and Equinix, in Baumann’s view, could conceivably deploy larger numbers of smaller facilities.  Or, alternately, a completely different class of data center provider could emerge into the market.  Consider, if you will, the fact that all those trillions of sensors will not be connected to their respective hubs by wire.  Nor will their hubs to their local IP hosts, most likely.

“For the Verizons, the AT&Ts, and the Sprints. . . to me, this might be a very interesting, compelling argument:  We’ve got to build edge data centers at every cell tower,” he explained.  “Therefore we can aggregate all this information from all these sensors, and then we either apply software analytics at the local level, or we can aggregate information and ship it off to the core data center, where it will then be processed and different analytics will be applied.”

Baumann is discussing the very real possibility of “IoT-as-a-Service,” and a way for carriers and communications companies to capitalize on this service before someone else does.  Why should telcos be content to simply provide pipelines for their customers’ data and content?  Perhaps they could be refining the quality of that content, by means of analytics and data extraction tools, so that they can present it to customers in a pre-processed form.

If there’s a market to be built around the data that sensors would be collecting, then it could be telcos that could be in the best position to monetize that market.

“We will see a proliferation of smaller, higher quantity, edge data center infrastructure,” he projected.  “Could it be one rack?  Two racks?  Five?  I don’t know, it’s going to be small.  It’s not going to be a data warehouse like Google, Facebook, and others have.”

Baumann conceded he may not be the proper person to be making broad economic speculations.  But he notes that public utilities operators, including telcos and electric providers, already own and operate networks that gather data on vast arrays of public infrastructure, using cellular technology to collect it into central databases.  Data that records the variations in foot traffic to and from airport gates, for example, is already being collected.  It may yet be determined, he told us, whether the owners of the sensors in these instances, or the organizations that make use of the data, are the actual drivers of business transactions.

Whoever does drive the business, however, may determine to what extent the edges of the data communications network are built up, and how soon.  If the incentive is there, then the world’s data center market as a whole could change dramatically.  It’s here where Baumann injects a phrase we’ve heard from Schneider Electric a few times before.

So while the individual IoT applications may not have a direct impact on physical data center infrastructure design, Baumann told us, “yes, the requirement of creating more compute power at the edge — that will shift, compared to how we’ve seen it in the past.  Maybe an Amazon, a Google, a Microsoft, a Compass [Datacenters], or a Digital Realty — maybe they will go into the market of building micro data centers, geographically dispersed at the edge, in order to accommodate this new data aggregation, and then applying sensors to it.  Maybe there are companies that can create, out of all this noise, value.”

Baumann  panel will include high-level experts from Compass Datacenters, Siemens Building Technologies, Legrand, and Siemon, at 10:50 a.m. Central Time Wednesday, September 14, in Room R206 at Data Center World, presented at the Morial Convention Center in Downtown New Orleans. Data Center World is presented by AFCOM, the association for educating data center and IT infrastructure professionals worldwide.  (Baumann is the president of AFCOM’s Southern California chapter.)

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