Data Centers as a Service Industry

The benefit of hindsight is that it provides clarity and perspective. It is clear now that - mergers, acquisitions and ground breaking technologies aside – there was an obvious shift in thinking last year towards the data center now being regarded as a utility. Going forward, that most likely means that there is also going to be a much greater emphasis than ever before on service excellence in the data center in 2017.

The key driver behind this is that data centers are becoming increasingly core to business operation and success, and are no longer considered to be ‘simply running behind the scenes’ but ensuring backup and storage is managed effectively. As information continues to be the lifeblood of global businesses, the mission-critical data center is now deemed to be an asset that needs to be protected at all times. As data centers are playing an increasingly important role in providing the essential infrastructure required to support ‘always-on’, content-rich, connectivity-hungry digital international businesses, we must perhaps now expect that the way in which they are procured will also change.

What is shifting first and foremost is that the major purchasers of data center space are now more likely to be hyper-scale companies such as Amazon, Google and Alibaba, than large corporates. The move to the Infrastructure-as-a-Service (IaaS) and Software-as-a-Service (SaaS) model, or any other such cloud services for that matter, will only continue to grow. The hyper-scale businesses know what they want and exactly when they need it. Their expertise in providing a hosted service to their customers means that they are 100 percent focused on efficiency, pricing, flexibility and reliability of service from the data center operators that they ultimately select as business partners.  They set the business agenda and the data operator is expected to meet it.

As a result, the requirement for consultancy and ‘old fashioned outsourcing’ from data center operators is being replaced by a smart new approach, driven by an overall preference for finding a different way of working that focuses far more on collaboration.

Data center operators will without doubt continue to be selected based on their ability to build a facility that is sophisticated but added to future demands and expectations will be the underlying ability to form a trustworthy partnership with their clients. The focus will become about showing detailed levels of understanding about the specifications provided by the client’s highly knowledgeable and experienced engineering and IT team, whilst delivering an agile yet cost effective implementation and maintenance model in the longer term.

As a service industry, data center operators will therefore need to expand their levels of knowledge to identify lower efficiencies and continued cost savings. It will also require a responsive ‘can do’ attitude, complemented by advanced problem-solving skills and a heightened awareness of what guaranteeing a 24×7 operation actually means.

The impact of globalisation also suggests that data center operators should be prepared to be asked to support client expansion into new territories, practically on demand, by harnessing their own experience of what it takes to enter new markets successfully, and then build quickly.

Extensive advanced planning, combined with the ability to deliver the same infrastructure in more than one country – against increasingly short deadlines – in order to support ambitious go to market strategies will become critical requirements in the RFP.

Looking ahead, we fully expect data center operators to have to work much harder to meet the needs of fewer but larger customers and our flexible business model means we are ready. For those intending to deliver a new kind of data center service in 2017, agility and adaptability will be what keeps you ahead of the game.  Don’t under-estimate the importance of this.

Article by Franek Sodzawiczny, first published in The Data Centre Alliance Journal February 2017

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