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Flexible friends – Agility and the data centre

Posted by on October 15, 2015

We’re currently living in a golden age of entrepreneurial activity, a time when new company launches are at an all-time high. Equally important, we live in the age of agile companies whose directors are prepared to take risks, develop ideas rapidly, bring them quickly to market, and, if necessary fail fast. 

But this entrepreneurial culture requires a supporting infrastructure in terms of data centres, the delivery of IT functionality and access to digital networks. And crucially this infrastructure has to be flexible enough to meet the requirements of a new breed of entrepreneurial businesses. 

The lessons of real estate

Think of it this way. It wasn’t too long ago that simply finding the premises from which to run a new business was a daunting prospect for budding entrepreneurs, not least because of the long-lease agreements imposed by landlords. A young company might be required to commit to at least a year of paying rent, even if the business proved non-viable after only a few months. Such agreements were a real deterrent to have-a-go entrepreneurs who were rich in ideas and energy but light on funding. 

Happily, relief came with property companies offering short, flexible lease agreements aimed at allowing businesses to set up quickly, expand their allotted space as the business grew, or (crucially) scale down or move out if the business failed to gain sufficient traction in the market.  

Latterly the upsurge of new tech-led businesses centred in hubs such as London’s Tech City district has gone hand-in-hand with provision of shared workspaces. Again the ability to scale up and down is key to the appeal of these premises, as are the relatively low rents associated with shared space and the benefits of working in close proximity to other like-minded entrepreneurs. 

Changing the data centre model     

This is a model that data centre providers should surely follow. 

Traditionally, data centres were sold as real estate and priced on floor space. Contracts were typically five years or longer and while this was often fine for corporate and medium sized businesses it was simply too expensive and inflexible for many smaller companies. Co-location helped to bring prices down, but customers were still charged fixed fees based on power usage. Users had to pay for power and space, regardless of whether they were using it or not. 

But times have changed. In today’s market, increasing numbers of companies of all sizes are choosing to buy in IT functionality and data storage on a software as a service (SAAS) model. The deals on offer are scalable up and down and services can be switched on and off without long lead times or notice periods.  

The rise of Software as Service has given rise to much speculation that the data centre model is becoming redundant. It isn’t, of course. For one thing, SAAS providers are themselves using data centres. And secondly, many organisations prefer to manage data and IT functionality in-house or outsource to a co-location provider rather than relying on the cloud model.  

Raised expectations

But cloud computing has raised expectations that data centre services should be accessible on flexible terms. 

For instance, a flexible data centre should be able to provide an initial footprint for clients based on their immediate need. If the client subsequently wishes to migrate further in-house functionality to the centre, or scale up operations, then an option to increase footprint should be part of the deal.  Equally customers should have the option to remove services without commitment to further payment. 

And in this new marketplace, customers rightly expect to pay for power they use rather than a fixed fee which doesn’t take into the account periods when equipment is not active.    

In a technology-driven economy, data centres are a crucial part of the infrastructure, not just for corporates but for start-ups and fast-growth SMEs. It is essential that the industry recognises the realities of trading in a fast-changing environment and prices and structures data centre services accordingly. At Infinity, we are already offering more flexible deal structures. It is the way of the future. 

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