The State of Data Center Supply Chains

Supply chain disruptions for data centers remain stark, despite efforts by data center operators to work around delays and shortages.

Christopher Tozzi, Technology Analyst

March 16, 2023

3 Min Read
Containers on the MSC Alexandra Container Ship arriving at the Port of Felixstowe UK as part of the global supply chain.
Robert Evans / Alamy Stock Photo

For businesses in general, supply chain disruptions increasingly feel like old news. A growing consensus among analysts suggests that the supply chain problems that plagued businesses during the pandemic's height are abating as delivery times decrease and vendors learn to work around unexpected supply issues.

In the data center industry, however, the outlook on supply chains is not so rosy, according to data from the Uptime Institute. In a recent survey report, the organization concluded that "data center operators continue to face significant supply chain hurdles." In fact, data center supply chain disruptions have increased over the past year, according to the survey.

Here's what to know about the state of data center supply chains today, including how pervasive disruptions remain, why they're happening and what data center operators are doing in response.

Persistent supply chain disruptions

The good news about major supply chain disruptions that impact the data center industry – such as long delays in acquiring critical equipment – is that only about one-fifth of supply chain operators report experiencing them, according to the Uptime Institute data.

The bad news is that the number of operators who have experienced disruptions or delays has increased significantly by about 60 percent over the past year. That jump suggests the problem is getting worse, not better.

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The data also shows that supply chain issues are widespread across the industry. More than 75 percent of organizations reported disruptions of some type, although a majority were "moderate" or "minor" in nature.

This is happening, by the way, despite improvements in supply chain operations in other sectors of the IT industry. PCs are now shipping much faster than they did during the pandemic, for instance. The troubles also persist despite evidence that organizations have shifted.

The survey report points to a variety of causes for lingering supply chain challenges in the data center industry. Geopolitical disruptions are a major factor, it says, as is trouble acquiring the raw materials required for data center equipment manufacturing.

Semiconductor shortages – a problem across a number of industries – are also hampering supply chains, the report found.

Responses to supply chain challenges

Data center operators are not sitting idly, waiting for the supply chain situation to improve on its own.

A majority are instead taking action to address the challenges by, for instance, seeking alternative suppliers or increasing the inventory of materials they keep in stock. Attempting to source supplies locally is another popular strategy.

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The fact that supply chain disruptions are increasing despite these changes suggests that they're not delivering the results data center operators hope for. But perhaps the situation would be even worse if operators weren't taking steps to address supply chain challenges.

When will data center supply chains improve?

Looking beyond the Uptime Institute data, there are at least anecdotal reports – like this one from John Parker of ESRI, who says he's seeing better shipping times compared to those from previous years – that supply chain challenges are getting a little better.

But like inflation or the coronavirus, supply chain disruptions don't seem set to disappear completely anytime soon. The challenges run deep, and data center operators should remain proactive in their strategies for minimizing the impact of supply chain problems on their businesses.

About the Author(s)

Christopher Tozzi

Technology Analyst, Fixate.IO

Christopher Tozzi is a technology analyst with subject matter expertise in cloud computing, application development, open source software, virtualization, containers and more. He also lectures at a major university in the Albany, New York, area. His book, “For Fun and Profit: A History of the Free and Open Source Software Revolution,” was published by MIT Press.

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