Andreas Hipp is the CEO and co-founder of Epsilon.
Data center operators can capture more revenue from cloud and content providers if they’re able to offer complete network-inclusive data center solutions. These kinds of customers want their lives made easier by the seamless integration of data center and network infrastructure, all delivered from a single source. Data center operators, large and small, can meet this new demand but are being challenged to find effective ways to add networking to their service portfolios.
New Customers, New Demands
Cloud and content providers need infrastructure that works harmoniously and is simple to manage. They also require easy scalability so that they can grow their businesses globally without the stress of integrating multiple vendor solutions.
This in turn is driving them to look for a single source for all their infrastructure needs, saving the need to procure these services separately and work them into an integrated whole. They are looking to data center service operators to deliver both network and data center solutions and see them as natural providers of scalability. By offering a simple and cohesive network and data center ecosystem, data center operators can capture new revenue from the cloud and content providers and free these customers to concentrate their core businesses.
Caring for Your Core
Networking, however, goes well beyond the core business of data center operators, challenging them to find efficient and effective ways to add these capabilities to their basic services.
They have the theoretical option of developing the required capability internally. This is an unattractive and impractical choice for most data center businesses, demanding resources and time they can’t spare. As well as acquiring new expertise, they would also need to develop relationships with multiple network providers, initially within their home market, and as customer horizons expand be compelled to do the same in any number of other markets around the world. Buying, selling, managing and maintaining international networks is complex, and unlikely to offer a return on investment in the near term.
Developing their own networking capability would also limit their ability to get to market quickly, shifting their attention from developing data center solutions to creating a network offering. Instead they must find a way to reach out and acquire the capability they need, one that matches their own skills in the data center market. In this way they can explore new revenue streams while making sure that their cloud and content customers get the service packages they need.
The Outsourcing Answer
Data center operators can converge flexible networking with multisite data center operations through the right network outsourcing partnership. An outsourced network solution offers a low capex method of acquiring the new networking capabilities that will help the operator meet the needs of customers in the cloud and content space. When network expertise is tapped in this way then new value can be created for customers and new business models explored.
An outsourced networking solution allows data center operators to integrate network capabilities with ease and break into new services quickly. It leaves others to monitor and deliver the network capabilities that are needed. The right contract allows a network offering to be scaled up or down, without the need to commit to rigid service provider contracts. No new investments or long procurement processes are required when it comes to scaling to meet customer needs.
Data center operator Digital Realty, for example, has facilities in Chessington and Woking with 22 key London-area Internet and metro gateway centers. Through network outsourcing it has been able to gain an application-aware network that supports 100G connectivity and facilitates on-demand switching of cloud-based application workloads between all these locations. It has also gained interconnectivity with hundreds of cloud, content, OTT and carrier names globally.
Racks Central, a Singapore-based data center provider, has also outsourced its network needs and is now able to offer its customers both its core data services as well as global connectivity. It has achieved its aim of allowing customers to purchase both data center and networking solutions, simplifying their procurement processes. By acting to meet these needs, Racks Central has avoided the risk of customers looking elsewhere for the integrated services they need.
A Real Opportunity
The demand from cloud and content providers is growing and the fastest way to serve this new demand for both network and data center infrastructure is to use network outsourcing to add new networking capabilities. From the largest to the smallest data center, operators can capture new revenue without adding complexity to their businesses. With the right partner, there is an opportunity to drive profitability, capture new revenue, and do more for customers.
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