If recent market predictions are to be trusted, enterprise investment in the hosting, cloud and colocation (HCC) sector should continue for the foreseeable future. In 2010, data center spending was $87.8bn. Gartner has projected worldwide data center spending to reach $143bn in 2015, an increase of 63% over the last five years. Specifically for colocation services, Mordor Intelligence expects corporate investment to rise from $25.07bn to $44.69bn by the end of 2019.
This will be welcome news for HCC operators, in particular Infrastructure-as-a-Service and colocation providers; however, as further industry consolidation occurs and the commoditization of data center space continues, many providers may see their profit margins eroded.
Industry developments like the merger of Telecity and Interxion are being accompanied by a growing demand for service provider accountability. As more organizations begin to question what infrastructure is supporting their outsourced IT, as well as its condition and management processes, asset data is expected to become an essential component of future service level agreements (SLAs).
Just because services have been migrated to the cloud does not mean enterprises are more accepting of downtime or reduced control. The reverse is the case – cloud-based IT, and the data that resides on those assets, must be as secure and effectively managed as on-premise equipment.
Cloud providers and colocation operators of all sizes are all too aware of this need to balance service level agreements against future capacity requirements. However, rather than being a cost or operational challenge, if approached strategically, asset visibility can be a significant value-based revenue opportunity that strengthens the provider’s service proposition and raises its competitive advantage.
Asset-Based Revenue Models
With the right combination of live operational data, management software and executive dashboards, cloud providers are able to deploy solutions that offer enterprises precise, continuous visibility of their outsourced assets and verifiable proof that SLAs are being met.
It does not matter if an asset is arriving in the loading dock, awaiting configuration, being held in storage or is deployed in a rack, live asset location data provides clear evidence of where an asset is and its current condition. In the process, this reassures the enterprise their investment is secure and matches contractual obligations.
For the provider, asset location data extends beyond reactive management. It can be used proactively to maximize facility efficiency and deliver widespread cost savings. For example, systems over provisioning and asset under-utilization can be reduced while “comatose” racks, where servers draw power without any processing workload, can be eliminated. Additionally, marrying asset data to environmental insight further reduces inefficient management practices to save both money and energy, which can be passed onto customers and reinvested in other areas of the business.
These capabilities can be transformative, especially in terms of business planning. It enables workloads to be prioritized and costs allocated based on demand and availability. Industry-specific productivity metrics that measure the efficiency of each client’s infrastructure against an industry benchmark can be developed. Customers can then analyze trend data to safely exploit the capacity of their data center while planning strategically for the future.
Clearly, having advanced data analytics capabilities is advantageous for all parties involved. It provides the customer data-driven assurance that IT assets are being maintained to the optimum level and the confidence that disaster prevention is being taken seriously.
The relationship then becomes more of a true partnership, rather than one based around a basic supplier and customer model. The provider can leverage its customer experience as a clear differentiator against competitors and the customer leaves satisfied that they are receiving the maximum return possible from their investment.
Disclaimer: This article was written by a guest contributor in his/her personal capacity. The opinions expressed in this article are the author’s own and do not necessarily reflect those of CloudWedge.com.