In recent years, there has been a growing trend of corporate mergers and acquisitions involving data center assets. As companies continue to invest in digital transformation and the adoption of cloud-based solutions, the demand for data center infrastructure has continued to grow. This has led many companies to seek out mergers and acquisitions as a way to quickly acquire technologies needed to support their growth strategies. The process of integrating data during the M&A process, however, can be a complex undertaking that requires careful planning and execution to realize the potential long-term benefits.
Why Organizations Integrate Data Centers During the M&A Process
There are several reasons why organizations may choose to integrate data centers during an M&A. One key reason is to achieve cost savings and efficiencies. By integrating data centers, organizations can eliminate redundant infrastructure and streamline their operations, resulting in cost savings and increased efficiency. Additionally, integration can help to improve data continuity, making it easier to manage and access critical data across the organization.
Another motivation for integrating data centers is to enhance their ability to support growth and innovation. Integrating data assets allows organizations to create a more scalable and flexible infrastructure that can easily accommodate changes in demand and support the deployment of new applications and services. This can be especially important in today's rapidly evolving digital landscape, where companies need to be able to quickly adapt to changing market conditions and customer needs. By integrating data centers, organizations can create a more agile and responsive IT infrastructure that can help them stay competitive and drive growth over the long term.
Best Practices for Merging Data Center Operations During the M&A Process
Merging data center operations during an M&A process can be a complex and challenging task, but there are several best practices that organizations can follow to ensure a successful integration.
1. Assess Existing Infrastructure
Much like a data migration, the first step to any integration strategy should be conducting a thorough analysis of the existing data center infrastructure, including hardware, software, and network configurations. The assessment can help identify potential issues, such as compatibility issues or capacity limitations, which can be addressed before the integration process begins. Decisions about what assets need to be preserved, migrated, or retired should be made as early as possible to avoid potential complications further down the integration process. In some instances, it might even be easier to migrate the entire tech stack into a new, scalable colocation or cloud environment.
2. Establish Roles and Responsibilities
Rather than diffusing responsibility for the transition among multiple departments, a dedicated team should be assembled to spearhead the project. Each team member involved in the integration process should have a clear objective and measurable goals before getting started. This includes defining the scope of work, assigning tasks, and providing adequate training and support to ensure that team members have the necessary skills, knowledge, and resources to perform their tasks effectively.
3. Develop an Integration Plan
Organizations should treat the integration process like any other complex data migration. Whether the plan involves transitioning data and applications from one facility to another or migrating everything to a new data center, having a clear roadmap in place will make the undertaking more manageable. The plan should include a detailed timeline, a list of required resources, and a testing and validation phase to ensure that data continuity and integrity are maintained throughout the migration process.
4. Establish Communication Channels
Having clear lines of communication in place throughout the M&A process is vital for the data center integration project’s success. Key stakeholders not only need to receive regular updates on the status of the transition, but also have the opportunity to provide feedback and discuss concerns as they emerge. This is particularly important in the event that the process doesn’t go exactly according to plan and adjustments need to be made.
5. Engage with Data Center Experts
No matter how much expertise exists within the merging organizations, it’s always a good idea to consult with third-party data center experts about a migration. Their specialized knowledge, experience, and resources can help organizations to overcome the unexpected challenges associated with an M&A data integration. They can also help to reduce the workload on internal IT teams, allowing them to focus on other critical aspects of the integration process.
Potential Issues to Watch Out for During an M&A Integration
Integrating data center assets as part of an M&A is a complex undertaking, especially if one of the organizations has a substantial IT footprint. There are several potential problems that organizations need to watch out for along the way:
Compatibility issues can arise if the infrastructure of the two companies is not compatible. This could be the result of them having different hardware, software, or network configurations, which can make it challenging to integrate their data centers. Issues can also arise with software applications, where the two companies may be running different operating systems, software versions, or databases. This can make it challenging to migrate data and applications between the two data centers, leading to data loss or corruption. This issue is more likely to occur if one of the organizations is heavily dependent upon outdated legacy systems.
2. Capacity Limitations
Capacity limitations can occur if the destination data center is not enough to support the additional workload. When two companies merge, their data centers may need to handle a larger volume of data, applications, and services. If the data center is not designed to handle this increased workload, it can lead to performance issues and cause system downtime, which can disrupt business operations and lead to lost revenue. Additional storage space, processing power, and network bandwidth may need to be added to accommodate migrated assets without impacting performance.
3. Loss of Data Integrity
Merging data from two different data centers is inherently complex, and it can cause a number of data integrity issues if managed improperly. Data loss can occur if data is not properly migrated from one data center to another. This can happen if data is missed during the migration process or if data is lost due to system crashes or other technical issues. If data is not properly merged into a system with different formats, structures, and definitions, it could be corrupted, resulting in inconsistencies or application errors. When merging data from different data centers, it’s important to ensure that all data is properly secured and that access controls are in place to prevent unauthorized access. Failure to properly secure data can lead to data breaches, which can result in legal or financial consequences for the organization.
4. Poor Resource Allocation
Resource allocation protocols determine how computing power, storage, and network bandwidth is assigned to different applications and services. When two companies merge, their data centers may have different resource allocation policies, leading to conflicts and inefficiencies. Resource contention can occur when multiple applications or services require the same resource, leading to performance issues and system downtime. Overprovisioning can also occur if resources are allocated excessively to applications or services, leading to wasted resources and increased costs. If resources are underprovisioned, they could suffer from poor performance, become unresponsive, or simply crash.
5. Time and Cost Overruns
Data center integration is a complex process that involves many steps, and if not properly planned and managed, it can lead to delays and increased costs. Unforeseen technical issues are usually the culprit behind delays. This is more likely to happen if the migration wasn’t planned properly, or when there is a lack of communication between organizations. Cost overruns frequently occur when additional resources are needed to address unexpected technical issues, or if the integration requires customized solutions. Both types of overruns can impact an organization's resources and impact its ability to meet business objectives or invest in other business areas.
How Cloud Computing Can Streamline M&A Data Center Integration
Cloud resources can be a powerful tool for facilitating an integration of data center assets. One key advantage is that cloud-based infrastructure can help maintain uptime for critical applications and services during the integration process. By leveraging cloud resources, companies can create a temporary environment that reduces the risk of downtime and ensures that critical applications and services remain available until the integration process is completed. This can be especially important in situations where the integration involves complex migrations, as cloud resources can provide a reliable and scalable infrastructure for supporting swing migration strategies.
Another advantage of cloud resources is that they can facilitate the creation of hybrid IT networks. By combining public cloud resources with data center assets, companies can create a flexible and scalable infrastructure that can support a wide range of workloads and applications. This can be especially important during the integration process, as it allows companies to quickly and easily migrate data and applications between different environments as needed. After evaluating performance requirements, it may be the case that one organization’s assets can be shifted entirely to the cloud, eliminating the need for integrating hardware or legacy systems into another data center environment.
Put Your Data Center M&A Integration on the Right Track with Evoque
Evoque Data Center Solutions provides a unique combination of data center and cloud engineering expertise that can help organizations navigate the complex challenges of integrating data center resources. Our colocation and cloud consultants have overseen countless successful migration projects involving transitions from on-premises facilities, third-party data centers, and cloud environments. We can help you develop an integration strategy that maximizes the potential of your M&A without compromising performance or uptime.
Whether you need support consolidating your tech stack or transitioning into a brand new colocation or hybrid IT environment, Evoque has the data center and cloud engineering expertise to make your project a success. Contact us today to talk to one of our experienced migration specialists.