Portable datacentres will be key to supporting the surging demand for online services, but equipment vendors need to start designing products especially for them, a Microsoft engineer said Wednesday.

Microsoft has already shown its enthusiasm for portable datacentres, which cram hundreds of servers into a standard 20-foot (6.1 meter) shipping container that can be delivered wherever it's needed, so long as there is a power supply and network connection.

The company has said it will put more than 200 of them on the first floor of a datacentre it's building in Chicago, and it is already operating at least one of its online services, Virtual Earth, from a portable datacentre in Colorado.

"The idea of modular, portable datacentres is key to the industry's future," said Daniel Costello, Microsoft director of data center research, in a presentation at GigaOM's Structure 08 conference in San Francisco. "That's why I'm here to talk about datacenteres, not just for Microsoft but for our customers as well."

Buying these boxes from server vendors can be more energy-efficient and cost-effective than building a new, traditional datacentre, he said, and Microsoft sees them as more than just a way to add extra computing capacity at short notice. "We see them as a primary packaging unit," he said.

Using shipping containers is part of an effort by Microsoft to radically rethink its datacentres, as it tries to add more computing capacity in a way that is cost effective and power efficient. "At Microsoft, we're questioning every component in the datacentre, up to and including the roof," Costello said. That includes "eliminating concrete from our datacentre bills."

"The definition of a datacenter has changed. It's not just bricks and mortar any more, and moving forward, we think it can be a lot more energy efficient," he said.

But vendors building portable datacentres today are filling them with equipment that was designed for traditional datacentres. "Moving forward, we need to design systems specifically for this form factor. If we look at the containers, that form factor will change over time as well."

Microsoft has approached every major server vendor about providing it with equipment, Costello said. He said he thinks "all major vendors" will offer portable datacentres within the next two years. Vendors offering them today include Sun Microsystems, Verari Systems, Rackable Systems and American Power Conversion.

The cost benefits come partly from economies of scale. Shipping 2,000 servers in a container is more cost-effective than shipping and installing separate racks, and portable datacentres don't require raised floors or as much wiring.

They can offer a better "power unit efficiency" ratio than do traditional datacentres, he said. PUE is a measure of a datacentre's power efficiency. If a server demands 500 watts and the PUE of a datacentre is 3.0, the power from the grid needed to run the server will be 1500 watts, according to a definition from the Green Grid industry consortium.

"We've seen PUE at a peak of 1.3" in modular datacentres, Costello said, compared with between 1.6 and 2.0 for a traditional datacentre.

The containers can accommodate 1000 watts per square foot, allowing companies to power a lot more servers in a given area, he said. Many companies are unable to add more equipment to their datacentres because power supplies and cooling equipment are at maximum capacity. The portable datacentres are an alternative to building new facilities or extending old ones.

There are some drawbacks and plenty of questions to be answered, he said. Some of the cons include a higher cost of failure if the power to a container is cut off, as well as new risks in terms of regulatory compliance. In addition, portable datacentres offered today can't accommodate servers from multiple vendors, he said.

There may also be issues with patents. The idea of putting standard equipment into a standard shipping container probably can't be patented, according to Costello, but "what happens inside the unit, in terms of airflow and how it's laid out, is definitely patentable."

There are also questions about the lifecycle of a portable datacentre, such as whether it can be refurbished after its 10-year life-span or will need to be discarded. "The financial models are still being worked out," Costello said.

But he thinks portable datacentres will be deployed widely to provide services to end users. "We used to talk about a PC on every desk," he said. "But how about a datacentre in every town?"

The company is looking at green energy sources to power them, including wind, solar and hydroelectric, he said.

The Structure conference is about the infrastructure equipment needed for "cloud computing," which refers to hosted services such as Amazon's S3 storage service and Google's App Engine, but can also include online services such as MySpace and Salesforce.com.