Until very recently, typical management boards regarded the data centre as little more than the shed used to house computer equipment. So when data centre managers first warned of an impending crisis, few took the problem seriously. It is only now, when the lack of space and spiralling operating costs has started to impede business growth, that the data centre has become an agenda item.

The reason for this nonchalance, says Peter Meehan, director of Analytical Applications, a company that applies business intelligence technology to streamline data centre operations, is that without an understanding of the physics that govern heat and power usage in the data centre, the complaints of the CIO can seem ridiculous. “The CFO sees that [IT is] getting 5% utilisation out of their servers, and yet the IT department is still asking for more money,” says Meehan.

But the problems are now so acute that the business can no longer ignore them. Indeed, so intense has the competition for electricity within London’s Square Mile become that organisations are being compelled to take drastic measures. For example, “one bank has turned its commodity traders on to the job of buying electricity,” says Meehan.

To put the electricity consumption into perspective, Meehan cites the example of one unnamed City institution: electricity consumption at its City HQ accounts for 0.23% of the UK’s entire supply.

However, Kate Craig-Wood, managing director of third-party hosting provider Memset, believes that the issues that Meehan is discussing are specific to the financial services sector in London, which regards ‘London as full’. “Outside of London, power and space are less of an issue,” she says. Locations such as Reading, with its abundance of suitable data centre space, and good transport connections, is becoming a popular choice for those not tied to capital, she adds.

This is little comfort for the City banks, where milliseconds of network latency represent millions lost in trade, and data centres must be on operations’ doorstep. “There is an impact on the network – what was a local area network would become a wide area network,” says Meehan.

However, notes Craig-Wood: “Most businesses don’t mind having a two milli-second delay on their ‘ping’ time.”

Nevertheless, the number of out-of-London locations with sufficient power and network connectivity is still finite. Therefore, says Dan Sutherland, chief executive of hosting company Carrenza and acting chair of the Green Technology Institute (GTI), the problem of sourcing energy in the long term will affect every business. That, he suggests, will prompt some organisations to outsource their data centre operations.

Whatever the potential problems, data centre outsourcing remains a polarising subject. Financial institutions have hitherto retained an iron grip on their infrastructure, which is unlikely to loosen any time soon.

For others, the decision of whether to outsource or not remains a secondary consideration. For as long as business data continues to grow at pandemic rates, while the appetite for more powerful enterprise applications remains undiminished, and while legislators continue to demand businesses retain ever more information, the issues affecting the data centre will remain entrenched – whether the physical assets are owned or merely rented.

Data centres will continue to consume more power and require more space unless businesses tackle these underlying causes, says Sutherland. “Four or five years ago, the industry had no interest in stopping the sprawl of data centres; everyone was making too much money. But now, I think the industry has realised that we have a role to play in mitigating data growth.”