World Data Centre Day / Changing hands. The sharing economy and data centres
Marking World Data Centre Day on 25 March, Data Economy looks at the evolution of the data centre – and its ownership model
The creation of the data centre wasn’t so much an invention as an evolution of the computer rooms that dominated early IT architecture.
However, as a concept, the data centre as we know it today has its roots in a partnership that was formed between IBM and American Airlines in the 1950s. Back then, the aim was to automate Sabre’s passenger reservation system; a task that required massive computing ability and ultimately rewrote how air travel is booked.
A few decades later and the data centres have graduated to become critical infrastructure and vital components of any functioning economy. However, the way we use them continues to adapt, driven by everything from business trends to the rollout of 5G.
Gone are the days when a company’s only choice was to build, own and operate its own data centre – today, much like everything else, there is a share economy solution that is democratising both access to the data centre and the business functions that access supports, initially 5G technologies and the increased data processing these demand.
“Digital transformation is the main driver for organisations across all industries to become more competitive and their journey to become digital is underpinned by technologies like Cloud, AI, 5G, virtual reality, the Internet of Things, and more,” says Interxion’s chief strategy officer Giuliano Di Vitantonio.
“As businesses increasingly adopt these technologies, they need to make sure that they have a powerful infrastructure in place that is capable of supporting them,” he adds.
Findings published in October 2019 by GM Insights, confirm that over recent years enterprises in many sectors have invested heavily in data storage and management, pushing overall IT spend up by 3.9% in 2018 – the equivalent of $3.65 trillion.
The preferred approach for these enterprises? Colocation.
As a market sector in its own right, revenue from colocation data centres is expected to reach U$100 billion by 2025, up from $40 billion in 2018.
As such, this projected growth provides opportunity both for those looking for data centre access and those able to provide it .
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On demand solutions
As 5G rollouts gain pace and everyday tech collects and stores more and more data, smaller firms are increasingly seeing colocation data centres as essential business real estate, available on demand.
“Historically, enterprises managed IT within their own on data centres, but many of them don’t intend to manage this new, more complex IT infrastructure in a proprietary facility,” Di Vitantonio explains.
According to GM Insights, the reasons for this vary by region and not all are rooted in cost.
For example, in North America and Europe, large facilities can be a financial burden and there is growing demand for hybrid cloud and virtualisation technologies. In the Middle East, modular construction is the defining trend along with meeting the demand generated by rising data traffic.
But in Asia-Pacific, there is a strong demand for green data centres, a rising demand for public cloud and IoT, and interestingly, a growing number of SMEs in India all driving demand.
Meanwhile the Latam region is dominated by enterprises with big ambitions but limited resources. For example, Brazil boasts a strong services industry that requires data centre access; Columbia has dozens of free trade zones; growth in Chile is driven by pro-business regulations; and in Peru colocation demand is driven by the requirements of a growing public sector.
“ In addition to providing businesses with improved network security and overall cost-savings on IT infrastructure, interconnection capabilities through colocated data centres help businesses grow their geographic reach as they seek to get content as close to end-users as possible and serve users in new regions,” says Di Vitantonio.
“ Direct connectivity to the cloud and other platforms through colocation creates a connected community that allows enterprises to access a rich array of partners and services while retaining access to their own infrastructure. Colocating also provides flexibility, scalability and energy-efficiency, allowing businesses to meet their current needs and grow in the future in a more environmentally friendly way,” he continues.
The future of ownership
According to figures from International Data Corp., there is a decline in the number of data centres owned and operated by non-tech companies that wish to retain systems in-house. In fact, it is estimated the 35,900 such centres that were in use around the world in 2018 will dwindle to 28,500 by the end of this year.
Meanwhile, the number of centres owned and operated by cloud providers, other tech firms, and “data-centre landlords” is expected to exceed 10,000 this year, up from 7,500 in 2018.
Gartner predicts that 80% of North America’s “large enterprises” will shut down all data centre operations by 2022. In 2017, that figure stood at 10%. Combined, these stats paint a clear picture of how it isn’t just the tech but the ownership models too, that are evolving.
“Businesses understand the value of a millisecond. They’re the organisations running real-time applications – the social networks, the live streamers, the high frequency traders. But to achieve this and help keep things moving, they need direct access to a connected community. That’s what carrier and cloud-neutral data centres provide. Colocation interconnects them with each other and with their partners, suppliers and customers,” Di Vitantonio says.
But there’s another piece to the puzzle.
Today is International Data Centre Day, an initiative from 7×24 Exchange International, intended to increase awareness of data centers and their role in a modern economy, beyond the industry itself.
However, as the Covid-19 crisis continues to unfold, that awareness is growing every day as flexible, scalable systems keep the world turning. If anything, recent weeks have demonstrated that the ability to operate, secure and recover systems is critical to the global economy, and the ability to scale capacity in line with demand is perhaps one of the most important tools at our disposal right now.
“Colocation data centres play a critical role in IT as the backbone of today’s digital society. During global pandemics and otherwise, continuing to invest in data centre services will enable our society to continue to operate, at least in the virtual world, and support mission critical activities such as online grocery shopping, sharing of healthcare data, home working and dissemination of critical information, as well as providing a much needed relief through social media and online entertainment,” says Di Vitantonio.
“Underpinning all these activities is a highly resilient infrastructure, with strong business continuity practices to ensure uptime during uncertain times.”
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