Data Centres at the Crossroads

Other industries have been there before. Will data centres take the right direction?

In the mid-1980s the industry covering the transportation of goods stood at a crossroads. The globalisation of trade, improved information and communications technology, and the existence of specialised but fragmented logistics companies offered tremendous opportunities for those with the vision to understand how having visibility  across the supply chain could drive profitable new business models.

Many well established transport companies were already complaining about commoditisation and low margins. Yet, they couldn’t see beyond their own operations and silos. They were also very snobby about the new parcels carriers who were forming or expanding into newly deregulated economies like Britain. Those carriers included TNT, FedEx, UPS and DHL. Today they are among the dominant global supply chain organisations. Older established companies like the National Freight Consortium, SPD, Cory and P&O have either been swallowed up, gone out of business completely or have survived in reduced circumstances in particular niches.

One of today’s IT industry buzzwords is platform. Everyone seems to have a platform and you could be forgiven for being confused about what they mean. But if you think about a platform as a raised space, visible to others and shared by people with a common message to get across, it may start to make sense. I think the parcel carriers of the 1980s created a supply-chain platform and I think data centre operators today are uniquely placed to create the ultimate information platform.

The parcel carriers don’t manufacture goods, nor do they sell them. They provide the platform upon which manufacturers, wholesalers and retailers move their goods to the end customer as quickly and efficiently as possible. It is perhaps then unsurprising that Amazon is now considering getting into the supply-chain business.

Let’s not lose sight of the main objective here. It is not about building a platform; it is about improving the effectiveness of complex, interconnected demand and supply chains so that the end customer gets what they want, when they need it at a price they are prepared to pay. If ever there was a complex interconnected demand and supply chain it is in information technology. A data centre sits in the middle of that demand and supply chain. The manufacturers (software developers, hardware vendors), the retailers (hosters, Systems Integrators, as-a-service providers) and customers (Enterprise CIOs, SMEs etc.) all need somewhere to house their data and run their applications. Understanding the needs of everyone in this chain should give data centre operators unique insights.

So, sitting at the crossroads, data centre operators need to decide if they are going to take the road that leads to increasing commoditisation and assimilation or look at how they can become the hub around which all the IT industry flows. Ask yourself the question, “what business am I in?” I hesitate to offer the term Information Platform. Whatever it is, you need to own it and create a platform that enables all the other players to join you and that visibly makes life easier for the consumers and enterprises that are the ultimate end-users of IT.

In the IT world, will you be DHL or NFC?

This post first appeared on the old Cassini Reviews website.