Callum Wallace is a Consultant in the TMT practice at Berwick Partners (an Odgers Berndtson Co.)
Rarely a day goes by in the data center sector without a new vendor springing up in the market or an existing business expanding. The reasons are clear: the market is buoyant and there is money to be made.
As a Search Consultant, I regularly work with data center teams and investors to help shape their leadership teams as they embark on new strategies or ventures. I have been lucky to work with a range of organizations from investors to startups and beyond.
I have observed that what really makes companies stand out and ultimately successful, is the quality of the product. Unfortunately, product management and marketing in the data center sector is often overlooked when building teams.
Build it, they may not come
Conventional thinking dictates that it is very difficult to differentiate a data center offering (outside of wholesale/retail colocation). The strategy often boils down to finding a site with good location, connectivity and power, and then executing the selling of that space better than your competitors – ‘whoever shouts loudest wins.’
However, the proliferation of data centers and the desire for clients to consume the services in a myriad of ways means that you can no longer follow the “build it and they will come” strategy.
Regardless of the sector, all customers require minimums in security, flexibility, price and uptime. Once achieved client’s primary needs can differ quite significantly:
- Media Sector: scalability, flexibility, agility
- Public Sector: ultra-high level security (physical and virtual)
- Banks: ultra-low latency
- Charities: green credentials and value
The options are endless and despite extensive cross over between sectors, building ‘standard’ and selling one size fits all is becoming commercially challenging. Therefore, making the glove fit the hand becomes the real key to long term data center growth and profitability. This responsibility falls with the owner of the product.
Standing out in the crowd
Take Amazon Web Services (AWS) for example, they have a sales and marketing team that is undeniably good. However, when taking into account the extraordinary and exponential growth of their offering, it is not as spectacular when compared to the market norm. The differentiator is simply that they had a significantly better offering than anyone else for their target market. While their competitors built indistinguishable products and crack sales teams, Amazon’s product gurus swallowed the market through product vision and engineering wizardry.
Enforcing the importance of the product
Data center vendors are getting into increasingly complex services and architectures such as on demand services, systems management, hardware (flash storage, converged infrastructure) and software (automation, DCIM, orchestration).
The broadening of the data center sector is enforcing the importance of the product role in data center leadership teams, as the offering must factor in a highly complex matrix of available technology and client desires. The product owner should therefore interface with every part of the business to create a homogenous strategy and roadmap:
- CEO: who are our target markets, what do they want to buy, why do they want to buy it and can we deliver that?
- CFO: investment cost and revenue predictions (particularly important around annuity services).
- CMO: working to understand the target markets and delivering marketing strategies that appeal to those verticals. Exceptional vertical marketing (driven by product) is often the difference between opening an opportunity and winning/losing the deal.
- COO: can we build what our target customers need?
- Head of Sales: if we build this, can we sell it and how quickly?
Once a clear vision and roadmap has been defined, it becomes easy for the business to align behind this strategy. A clear and definable strategy will inevitably aid the on-going health of the business.
One size does not fit all
Larger companies may wish to hire a product director, for smaller companies this may not be possible. In this scenario I would advocate clearly assigning the responsibility of product to a single person and empowering them within the organization so they can be held accountable to deliver the roadmap and vision.
To be clear, I am not advocating that all data center vendors have to verticalize the market and build sector specific solutions. Depending on location, availability of cheap sustainable power and good connectivity the best strategy may be to build a vanilla solution for all. This, however, should only be done if the product owner has come to this conclusion through deep scrutiny of the situation.
Ultimately the sector is expanding at a rapid pace and demand continues to grow. Nevertheless if your product or offering cannot be differentiated from the competitors then you have an unenviable position.
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