IT Scalability as a Competitive Advantage

August 31st, 2021 by · Leave a Comment

This thought leadership article was sponsored by QTS Data Centers and was authored by Sean Baillie, EVP Connectivity

Digital Transformation Driving Large Enterprises Off Premise and into Mega Scale Third Party Data Centers

The global pandemic waxes and wanes, but it has not slowed the massive digitization of data, often referred to as digital transformation, that is now challenging large enterprises and government organizations who are attempting to deploy new digital strategies. Since 2016, the digital transformation phenomena have generated 90% of the world’s data and this astonishing growth shows no sign of slowing.

Digital transformation is rapidly increasing requirements for larger technology stacks to store, compute, analyze and connect all the data.  All of this requires more power as evidenced by the Valuates Report that projects the global data center market for power increasing 43% from $15 billion in 2020 to $21.5 billion by 2026.  

This increase in demand for power is commensurate with increases in data center space and connectivity required to accommodate expanding compute and storage environments in colocation data centers.

Bigger is Better

As a result, the ability of an organization to scale — to easily add or subtract compute and storage resources, in different data centers and geographies – has become a significant competitive advantage.  

For on-premise data centers, scaling requires purchasing more power and building more space which is costly, slow, and difficult to manage. As a result, large enterprise and government organizations are choosing to move out of their on-premise data centers into large, modern, third party data centers offering flexible and scalable data platforms that can accommodate rapid changes in the growth of data.

According to an IDC survey, “72 percent of respondents indicated their usage of colocation will increase over the next 12 months” to accommodate a “new normal” for Enterprise IT taking shape.

While most on-premise data centers are relatively small, the average multi-tenant data center occupies approximately 100,000 square feet of space, with handful of providers offering mega scale, one million+ square foot facilities with ample power, robust connectivity and innovative service delivery platforms utilizing advanced technologies to optimize the digital infrastructure of their enterprise customers.

Enterprise digital infrastructure deployments are expanding and starting to take on junior hyperscale-like requirements for scalable space, power, and sophisticated connectivity ecosystems in multiple data centers and in multiple markets.

QTS continues to observe a significant increase in requests for proposals from enterprises across verticals with rapidly escalating requirements. What used to be normal enterprise requests for 250-500 KW environments are now requests for multi-megawatt, multi-site, multi-geography engagements.

As a result, there are a shrinking number of data center providers that are capable of accommodating the increasing enterprise requirements for scalable space, power and robust connectivity. They are unable to compete for large enterprise deals because the requirements are too demanding – both from the data center’s ability to physically scale (power, space, connectivity) but also its ability to provide data center services across multiple sites and geographies. 

And while the overall number of on-premise data centers may be going down as enterprises consolidate into large, multi-tenant data centers, the overall data center growth forecasts are rising. Gartner forecasts that end-user spending on global data center infrastructure in the US alone is projected to climb to $200 billion in 2021, up 6 percent from 2020.

Creative New Requirements Emerging

As data center deployment size and investment increases, it becomes more visible to stakeholders and the selection of a data center provider becomes a much more scrutinized process. As a result, today’s data center must demonstrate it can enable a pristine business experience from content to end user in a constantly scaling environment. The strategic enterprise buyer recognizes that if they are not growing beyond their initial deployment, they are not likely to succeed. Only through having a scalable data center platform can an organization be prepared for the potential of growth in its data needs.

The ideal colocation data center providers deliver a cloud-like experience when it comes to scalability. They have ample space, power, connectivity and advanced technologies that allow the enterprise to focus on executing their digital strategy rather than trying to replicate the cost and expertise advantages of a major data enter operator.  The best providers will collaborate to understand your digital strategy and scale your environment accordingly, ensuring you always have enough resources without over-provisioning and wasting your IT budget.

The increasing need to scale is a direct result of digital transformation and massive data growth that continues to increase exponentially. QTS’ experience with large enterprise, hyperscale and government organizations has given us unique perspective into serving this new dynamic. We have mega scale data centers in all the major U.S. markets and can support the largest space and power requirements. We are also unique in our commitment to provide and grow connectivity ecosystems in all of our buildings across geographies. This translates to a combination of mega scale data center infrastructure with access and connectivity to the world’s largest cloud providers, the world’s largest IP networks, Internet Exchanges, fiber providers, diverse transport paths and subsea cables.

To learn more about scalable digital infrastructure, contact QTS Data Centers.

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