Datacentres in demand as tech evolution continues to disrupt business

Datacentres in demand as tech evolution continues to disrupt business

The evolution of technology and IT is placing ever increasing pressure on businesses.

“Having the right data centre infrastructure has become the new “arms race” for companies trying to differentiate themselves in this crowded, technology driven world.”

Where is the growth coming from?

When asked which type of business in the data centre industry was most likely to grow in the next 12 months, DLA Piper respondents outlined specialised hosting/cloud vendors and co-location providers as the most likely to see growth, followed by managed service providers such as telecoms suppliers.

“Overall, this data aligns strongly with the key messages that we are receiving back from our clients,” Day adds.

“Whereby lack of datacentre capacity in certain markets, the proliferation of mobile and “data heavy” services, the growth of Cloud and the convergence between key players in the market (e.g. telecoms suppliers, outsourcing suppliers and hosting providers all offering different flavours of data centre services) are all contributing to growth in the sector.”


A recent IDC report notes that data storage requirements by 2020 are set to reach 40 zetabytes (i.e. 40,000,000,000,000,000,000,000 bytes of data).

This, along with the other macro trends identified, is going to have a massive impact on the data centre industry.

“However, set against this positive backdrop, there is still huge financial pressure on businesses to reduce their IT spend and be more creative in the way that they use and purchase data centre services (and how they approach their data centre infrastructure),” the report states.

“With a key emphasis being on demand driven or consumption based models, so that customers only pay for what they use.”

Companies that are able to harness these competing factors and recognise the seismic change that is taking place in terms of how customers procure (and wish to use) data centre services, will be better placed to leverage the current opportunities in the datacentre market and achieve growth.

“This macro trend for datacentre growth are compelling but the market must now be seen as a component of an IT solution, rather than the property where the IT solution resides,” adds Andrew Roughan, Commercial Director-Infinity SDC.

“Influences such as virtualisation and Cloud mean end users can get more IT out of less physical datacentres.”

So what does this all mean for businesses and the datacentre sector?

The key theme of growth and overall positive outlook that pervades this report is obviously encouraging for the data centre market as a whole.

“But the most important “take away” has to be understanding how to cope with technology change and the impact that this is having on the market,” concludes Paul Jayson, Real Estate Partner, DLA Piper.

“We can see that technology change is dramatically changing the way end-consumers use and consume data (and has contributed to the prolific data growth we are seeing), Cloud, Big Data, virtualisation and changes to storage technology are all hugely disruptive and having their own impact on different aspects of the market.”

Finally, Jayson believes customers now procure datacentre services in a very different way, focusing on flexibility and being “demand driven” (based on business needs) which is requiring traditional data centre players to re-think their approach and leading to the growth of modular and more flexible data centre solutions.

“Being able to harness the opportunities that technology change is driving will be absolutely critical to those organisations wanting to benefit from the current growth that the market is seeing and continues to expect to see in 2014,” Jayson adds.

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