August 9, 2019
Earlier this year, Drew Leonard, VP of Strategy for Evoque Data Center Solutions, spoke at The Future of the Data Center Panel Discussion hosted by the Southern California chapter of AFCOM at Evoque’s Hawthorne, California data center facility. During the discussion, Leonard mused on how data centers have changed in the past five years. While a lot has changed, he identified three emerging elements that data centers and colocation providers must incorporate to stay competitive and meet modern business demands.
- Cloud Connectivity
- Terms Flexibility
- Interconnectivity Support
Leonard outlined the need for cloud connectivity simply:
“There is an expectation that there is some level of access to a cloud from your data centers today. That’s become table stakes.”
It’s such table stakes that he didn’t elaborate any more on this point during the panel. It’s simply something data centers must accommodate.
While exactly what should be put in a cloud and how it should be managed isn’t as straight forward as many organizations originally thought (another topic covered during the discussion), the need for cloud solutions is undeniable in today’s business environment.
Whether baked into a data center’s core service offerings or facilitated by key partnerships (like the Evoque + Megaport partnership), data center solution providers who try to ignore the cloud will quickly lose business.
Cloud adoption is having a secondary effect on data centers and colocation providers; it’s changing how customers think about contract terms. Leonard pointed out:
“Think about the mentality of folks and the experience they’re having with their cloud providers — they can dial things up, dial things down, they can turn it on, turn it off. Now they’re thinking about how they can do that in a colo environment.”
For colocation providers, this is translating into shorter terms and backend contract flexibility that allows customers to remove or downsize by as much as 40% after a certain point, Leonard explained.
“Companies don’t have as much line of sight into what their future business needs are going to be in the data centers. So, the notion of a three- to five-year term with ETCs and things like that is evolving and the level of flexibility is increasing.”
This shift has been happening for a few years, but at this point it’s unlikely to reverse. While this may be a bigger business adjustment for colocation providers than finding ways to offer cloud connectivity, it is something that successful providers will need to adapt to. Offering more favorable terms will be a major driver toward winning and retaining customers.
Interconnectivity, particularly to environments outside the data center walls, is the final emerging element Leonard discussed.
“The ecosystems within the data center are good. The ecosystems outside the data center are great. If your data center provider is not giving you the ability to reach out and build your ecosystem across multiple data centers, other buildings, and other regions, they’re not giving you the ability to take advantage of a full ecosystem.”
As enterprises refine their cloud approach and as the edge expands, the importance of supporting interconnectivity will only grow. When done correctly, it will have positive impacts on both effectiveness and efficiency for customers.
The Future of Data Centers
The future of data centers is changing quickly as solutions like the cloud and edge computing push traditional colocation providers into a new way of doing things. Metrics like density and service level agreements will continue to be important, but new elements like cloud connectivity, terms flexibility, and interconnectivity will play a growing role in who customers chose to do business with.