Trend Forecast 2021: Second verse, same as the first

Mitch Fonseca • March 22, 2021 • 4 minute read

AI/ML, Hybrid IT, Enterprise Bare Metal, Colocation, Connectivity in Interconnection

You might have read my previous post, where I talked about what I see on the horizon for data centers. In it, I talked about how much of what I’m seeing is simply a continuation of what began last year as companies looked to keep costs in check while keeping employees safe and still growing their business. Not exactly an easy feat. In this post, I’m going to continue with that theme and delve a little deeper into what I see coming not only for data centers, but our customers.

Ace is the place. Anyone looking to buy hardware these days is more likely to be found at their local Ace store than in the data center. Whereas a few years ago, companies were focusing their energies and resources on accessing the public cloud, that’s now developed into a true hybrid strategy. Organizations today, rather than buying their own hardware, are pushing for services on-demand (e.g., NVIDIA’s DGX A100 systems), which would otherwise be cost-prohibitive to tackle on their own. I expect that demands for as-a-service offerings will continue to increase, especially from companies that aren’t comfortable putting certain infrastructure in the public cloud or that know they’re going to run steady-state that will be more expensive in the cloud.

A little bit of ... Standard enterprises have become more comfortable with hybrid environments over the last year to year-and-a-half and are really leaning into it now. Granted, leading-edge companies have been doing it for a while, but among the down-the-fairway companies, hybrid environments, where they're connecting to four to six service providers in the same data center, are really starting to take off. Being able to get to the public cloud, access internet exchanges, and connect with specific carriers — these things have become increasingly important to our customers. The number of connections they have is skyrocketing, and data centers will need to keep up with their need to interconnect.

Remote control. The need to keep workforces as remote as possible in the wake of COVID has led to a definite uptick in complex service requests from customers. In the past, enterprises would have sent their teams in, but given companies’ desire to keep their employees healthy, the need for highly skilled data center operations techs will only grow. Even if a customer is guiding your team step-by-step, it’s extremely helpful to have someone on the other end of the line who not only knows what they’re talking about, but really understands what a company is trying to accomplish.

Future proof ... positive. The majority of enterprises today don’t have the adequate skill sets to transition to new technology efficiently. More often than not, they need help. For any organization, there’s always a learning curve with new platforms, how they assign resources, and how they leverage a data center’s services. This presents a tremendous opportunity. Having the world’s best technology isn’t enough — data centers must be able to offer staff that knows the technology inside and out. And, too, the growing popularity of Products-as-a-Service, which allow organizations to eliminate expensive capital expenditures and transition to more manageable and predictable operational expenses, gives data centers additional opportunities to increase revenue streams while simultaneously building strong customer engagement. The combination of network automation, near-instant provisioning of compute resources, and a highly skilled operations team that can assist customers when they have questions, means data centers are poised to future-proof customers.

A-U-T-O-matic. Automation, especially network automation and the ability to turn up workloads in the cloud or at physical locations, is becoming increasingly important. Among our customers, we’re seeing more companies that want to automate not only the provisioning of our compute nodes or interconnect services, but their incident response, as well. Organizations want to know about an event the moment it happens so the ability to automate and manage their response teams is becoming more critical.

We’re on the precipice. How will 5G and edge computing transpire over the next several years? That’s the question of the hour, and the reality is we still don’t know. Enterprise companies are typically slower to embrace emerging technologies — they want to understand it, but they don’t necessarily want to act on it immediately. In terms of 5G and edge, I think we will see a lot of education in terms of what they mean and how companies can leverage them. And while I don’t expect to see widespread pickup by enterprise customers in the coming year, with the push toward automation, traditional data centers will need to shift toward being 5G-capable in anticipation of when their customers jump onboard and those markets, where data centers already located near their customers, will transition into “edge” data centers.

Asia Major. Expect to see South Korea and even Kuala Lumpur take off as the next big things in terms of data center markets within APAC. Tokyo, which has long been a popular hub, is an extremely dense environment, not to mention costly. As customers look to reduce their power costs, we expect to see more enterprises put network access points in Tokyo and move their compute elsewhere. The same goes for Singapore, where demand is greater than supply, which as anyone who paid attention to Econ 101 knows, leads to higher prices. I think some of the offshoot markets with lower power costs will really start to take off in the next year or so.

This is the last post in a 3-part series examining data center trends. Read the other pieces in the series: Data Centers on the Move and Artificial Intelligence Applied.

Views and opinions expressed in our blog posts are those of the employees who made them and do not necessarily reflect the views of the Company. A reader should not unduly rely on any statements made therein.

Mitch Fonseca Chief Operating Officer, Cyxtera

Mitch Fonseca

Chief Operating Officer, Cyxtera