Mass closures of pubs, restaurants and other businesses, surging unemployment, tightened purse-strings. These are just some of the features of the economic environment that organizations could be operating-in in the post-pandemic world. The survivors and thrivers won’t just be the businesses that keep a close eye on their costs, but ones with a digital strategy that reaches customers better than their rivals.
That was the warning of Bernard Marr, author and technology advisor, writing just last year. Now, one year into the Covid-19 pandemic, the post-pandemic world is looking even more worrying. “Businesses are going to become more reliant than ever on their digital strategy. Without wanting to sound too alarmist, in many cases it will be the deciding factor in whether they make it through the tough times ahead,” he wrote.
Businesses that survive the pandemic and the subsequent recession, which some have suggested will last the best part of a decade, will have done so by rethinking the way they do business. In particular, how they can better incorporate data into their business processes: their online presence, sales and service delivery, the automation of systems and processes, customer response, and being able to reach beyond a limited physical territory to new customers and suppliers.
Key to this rethinking will be data and the underlying infrastructure to support it and, while the data center sector may stand to benefit, the migration process, accelerated by post-pandemic business needs, will also carry with it a number of threats to the sector, too.
For example, there are already a number of warning signs emerging, similar to the ones seen following the dot-com crash 20 years ago, and the global financial crisis of 2008-09. This includes reports of some clients of colocation providers falling into financial difficulties, media reports of under-occupied data centers, and smaller providers experiencing difficulties. But, thankfully, the shift to digital services and the growth of cloud has kept the sector healthy as a whole.
The profile of companies using cloud and data center services will change over the next decade, too, as will the hosting and IT delivery options available to them. Understanding these changes, and what will drive them, will be key for operators’ growth over the next decade.
Cloud will continue to evolve into a combination of hybrid and multi-cloud, driving greater choice for users. Organizations that have been slow to shift activities off-premise until now will be encouraged to do so in the post-pandemic economic environment, as will the need to push data and processing capabilities closer to customers in order to serve them better.
Furthermore, trends that accelerated fast during 2020, such as the rise of home working (and the adoption of associated tools to support that) will not be thrown into reverse post-pandemic.
In other words, it won’t just be the economic climate alone that drives digital transformation in 2021 and beyond, but also suddenly changed working practices and patterns of consumer behavior.
Regardless of the economic climate, sustainability will remain an important factor, while perceived ‘social responsibility’ will also increase in importance.
Sustainability will be judged in terms of consumption of resources, not just including power, but also water and the energy used to manufacture, transport, install and maintain equipment. In other words, the whole environmental costs, also taking into account procurement and environmental costs incurred in the supply chain.
Over the past decade, the trend towards energy efficiency and sustainability has been driven by the high-profile cloud providers. Google, Microsoft, Amazon, and Apple have all committed to strategies for procuring energy from sustainable power sources and all have committed to becoming, at the very least, carbon-neutral.
This commitment is not just about what those companies do in terms of their own operations, but is also a requirement of those companies that supply them with products and services. Major data center operators, including CyrusOne, have made similar pledges.
And it is not just about energy but, increasingly, about water as well. The water usage of a large data center can be considerable – based on an average Water Usage Effectiveness rating, a 100MW campus would have a water demand of 1.1 million gallons (4.2 million liters) per day. At an average consumption of 100 liters per day, that is enough water for 11,000 people.
Social responsibility relates to the recruitment and retention of staff, including commitments towards equality and diversity. This drive dovetails with the need to make good acute skills shortages, as well as the increasing diversity of skills requirements in the sector.
As the data center transforms, skills requirements have moved from a focus on facility design, engineering, operations, and real estate management into skill sets from IT, networking, analytics, security, software, and strategy. Different markets will have different skills shortage profiles, depending on the technological development of their data centers, the level of competition for skills from other industries, local standards of education and training, relative salary levels, and awareness of the data center as a career option.
As a measure of how acute skills shortages are, in DCD’s 2019 Asia Pacific survey, the shortage of people with desired levels of qualification and experience was a greater resource concern than lack of energy or water.
However, considering the challenges that some sectors will be grappling with this year, a skills shortage will be a luxury in comparison.
Download the full report, which includes insight into how the data center sector will need to adapt in order to respond to customers’ rapidly changing needs.