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The AI revolution is driving demand for massive computing power and creating a data center shortage, with data center operators planning to build more facilities. But it’s time for data centers and other organizations with large compute needs to consider hardware replacement as another option, some experts say.

Data centers are running at near capacity in many areas of the world, according to the Global Data Center Trends 2024 report from CBRE, a real estate services firm. Singapore’s data centers have a 1% vacancy rate, and data center availability in the huge northern Virgina data center hub stands at 0.9%, despite an 18% increase in capacity between early 2023 and early 2024, according to the report.

The 2023 CBRE report found that 83% of the data center capacity under construction at the time was presold.

While there’s more than 10% of capacity available in Europe, Latin America, and the greater Asia Pacific region in 2024, the growth of AI, cloud computing providers, and other power-hungry applications requires a new approach to data center operations, the report says. “High-performance computing will require rapid innovation in data center design and technology to manage rising power density needs,” it adds.

A current data center building boom isn’t likely to stop soon, with credit rating firm Moody’s, in a July 15 report, projecting that global capacity will double in the next five years. But with finding space for new data centers becoming increasingly difficult, some experts say it’s a good time for data center operators, cloud computing providers, and companies running AI and other major workloads in house to think about replacing old hardware instead.

Efficiency is money

Modern CPUs not only offer more computing power, but they also are more power efficient than older models and generally take up much less data center space, some advocates say. Using new CPUs, data centers can consolidate servers running tens of thousands of cores into less than 50 cores, says Robert Hormuth, corporate vice president of architecture and strategy in the Data Center Solutions Group at AMD.

An estimated 100 million 5-year-old servers are still in operation, partly because the COVID-19 pandemic stalled some planned upgrades, Hormuth says. About 21 million new servers could replace those old machines, leaving data centers and in-house server rooms more space to add computing power.

With power efficiency gains and other savings, a large-scale hardware replacement could give data center operators and other hardware-dependent organizations a return on investment in as little as two months, Hormuth claims. Meanwhile, building a new data center can cost hundreds of millions of dollars.

Power efficiency gains of new hardware can also give data centers and other organizations a power surplus to run AI workloads, Hormuth argues.

“That’s the race that seems to be going on in enterprises: ‘How do I go make room and power to do AI?’” he adds. “That pressure is just really driving the enterprise customers, whether it be in a co-lo or create their own, to get those capabilities.”

Big upgrades ahead

While AMD has a dog in this hardware-replacement fight, several other IT experts also say it’s a good time to replace servers and other hardware. Many data center operators appear to be thinking the same way, with Gartner projecting a 24.1% data center spending increase, covering servers, external storage, and network equipment, in 2024. Data center spending, which doesn’t include new buildings in Gartner’s calculations, saw just 4% growth in 2023, Gartner says.

Jim Warman, vice president of infrastructure architects and engineers at Myriad360, a data center and cybersecurity consulting firm, sees the same trend. Many hardware users are prioritizing replacement.

“Businesses are recognizing the advantages of modernizing their infrastructure to support new applications and services, reduce costs, and maintain competitiveness,” he adds. “The emphasis is on utilizing the latest technology to drive business growth and operational efficiency.”

With data centers near capacity in the US, there’s a critical need for organizations to consider hardware upgrades, he adds. The shortage is exacerbated because AI and machine learning workloads will require modern hardware.

“Modern hardware provides enhanced performance, reliability, and security features, crucial for maintaining a competitive edge and ensuring data integrity,” Warman says. “High-performance hardware can support more workloads in less space, addressing the capacity constraints faced by many data centers.”

The demands of AI make for a compelling reason to consider hardware upgrades, adds Rob Clark, president and CTO at AI tool provider Seekr. Organizations considering new hardware should pull the trigger based on factors beyond space considerations, such as price and performance, new features, and the age of existing hardware, he says.

Older GPUs are a prime target for replacement in the AI era, as memory per card and performance per chip increases, Clark adds. “It is more efficient to have fewer, larger cards processing AI workloads,” he says.

While AI is driving the demand for data center expansion and hardware upgrades, it can also be part of the solution, says Timothy Bates, a professor in the University of Michigan College of Innovation and Technology. Data center operators can use AI to monitor efficiency, he says.

“By using AI tools to predict and manage hardware degradation — such as PCIe cards, SSDs, and memory components — businesses can replace individual components rather than entire systems, optimizing costs and extending the lifespan of existing infrastructure,” Bates says. “This approach, combined with strategic hardware upgrades, can maximize the efficiency and performance of data centers.”

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , ,

More than 38 million people in the United States, including 12 million children, are facing hunger despite the country producing more than enough food to feed everyone. One organization, Feeding America, the country’s largest domestic hunger relief organization, is turning to information technology to help, having hired three years ago its first IT chief to transform how its network of 200 food banks serve the food insecure.

“Feeding America is a nonprofit that behaves like most for-profits,” says Maryann Byrdak, chief information technology officer of Feeding America. “We source a lot of food. We coordinate donations from manufacturers, retailers, grocers. But at the same time, we also purchase food. So, we have various processes within our system that behave like a for-profit, too. We have to make sure we have the processes, the tools, and the teams aligned to make sure they’re optimized, to make sure they’re secure, and to make sure that we have the right digital footprint to coordinate all those efforts.”

While Byrdak says Feeding America behaves like a for-profit in many respects, it faces unique challenges in others. The organization operates a federated network, with each of its 200 member food banks being an independent 501(c)(3) that develops its own strategies, hires its own leaders and teams, and implements its own IT systems. As a result, technology solutions, standards, and versions vary across the member food banks. Those food banks also have varying levels of technology acumen. Byrdak says 80% of them do not have a dedicated IT staff member.

“Feeding America is a network of 200 food banks and 60,000 agency distribution points,” Byrdak says. “We really act as a parent organization, but each of the food banks are an independent entity. They can decide what and how they utilize our services. Not all of the food banks have technology resources. For many food banks, we provide those technology services.”

Transforming the fight against hunger

Byrdak’s team serves as the sole IT department for about 15% of the food banks in Feeding America’s network, she says, doing everything from building their laptops to configuring their switches to supporting their ERP systems. The team supports the ERP systems for another 25% of the network.

“For the entire network, we provide the digital footprint to connect the donors to the food banks and then the food banks to the neighbors in need,” Byrdak says.

Byrdak joined Feeding America from the private sector, having previously served as CIO and senior vice president of IT at Potbelly, an American sandwich restaurant chain. The nonprofit brought her onboard with a mandate to build a roadmap to drive innovation and modernize the organization’s IT footprint. Central to Byrdak’s multi-year transformation plan is the expansion of MealConnect, the first nationally available food rescue and sourcing platform, and a new data warehouse to anchor an analytics offering that helps food banks analyze and visualize their food sourcing and distribution data. Byrdak and team have also implementing a new CRM system for the national office.

Feeding America worked with partners such as Salesforce, Google, Microsoft, Tableau, and Slalom Consulting to build the foundational technology capabilities to support the transformation, which has earned the organization a CIO 100 Award in IT Excellence.

“We met with 30 food banks and various councils of groups of food banks, and of course, the Feeding America staff and executive team, to understand the starting point,” Byrdak says. “We didn’t have basic things like a data warehouse. We want to be a data-first organization, and to really drive impact through insights, you need a centralized place to store and analyze the data.”

MealConnect connects retailers with food banks to support local food rescue. Since 2014, it has recovered more than two billion pounds of food. In August 2021, the Feeding America team brought in Microsoft Azure Cloud, Azure Identity Services, and Azure DevOps to expand the platform and create a national produce marketplace matching system.

MealConnect’s algorithm helps optimize transportation routes. It connects produce donors anywhere in the country with the closest foodbank and offers product recommendations to food banks to help them maximize the value of a truck during the offering process. The platform also enables food banks to share available offers with their peers, increasing equitability. The new platform is also mobile-friendly.

MealConnect’s new produce features launched in August 2021. In September 2021, MealConnect helped moved more than 10 million pounds of produce through the Feeding America network, a 53% increase over the previous month and a 28% increase year over year. That equates to an additional 1,647,058 meals sourced, according to the organization.

Driving change with better data reporting

While improving MealConnect, Byrdak and team also stood up a new data warehouse to act as the core of Feeding America’s Member Data Sharing Program, an effort to integrate the ERPs of every food bank across the network.

The data warehouse was built on Google Cloud with Informatica Intelligent Cloud Services for data integration and Tableau for data outputs. Byrdak’s team connected it to individual food bank ERP platforms to deliver dashboards on food sourcing and distribution. The system also gives the Feeding America national office a near real-time view into how food is moving through its network, along with the ability to track trends and capture granular information about the kinds of foods being distributed.

Some members use the program to better plan their inventory and distribution activities, Byrdak says, while others use it to educate and excite their boards. Food bank CEOs have reported their fundraising staff is able to better connect with operations to use data to raise more funds, she says. Others have noted their executive teams use the dashboard to monitor annual performance and adjust strategy in real-time.

Feeding America’s new CRM, built on Salesforce, gives the national office the ability to better coordinate efforts to offer more strategic, proactive support. Before the CRM implementation, Byrdak says the national office staff resorted to personal notes and one-off conversations to support the network.

The implementation went live in January 2021. Since then, Byrdak says the national office staff have reported that it takes less time to satisfy food bank requests.

“We just had an annual conference with our food bankers and the feedback is great,” Byrdak says. “The feedback of the food bankers using our dashboards is that they can now walk into a boardroom and show their board members data they did not have before. You know you’re making an impact when they’re driving change.”

Analytics, CIO 100, Data Management