Speed to data. That’s what it’s all about. In a world where data is being increasingly generated and demanded planet-wide rather than just in the Tier 1 cities, the winners in the colocation and cloud services race will be the companies that can deliver data the fastest to end users worldwide.
But here’s the issue… in order to meet the demands of enterprises outsourcing to the cloud, or indeed end consumers wanting a faster more seamless experience when using social media or content streaming services, most of the existing hyperscale data centers are too far away from users in Tier 2 or 3 cities and certainly too far from emerging economies, with the result that latency increases and user experience suffers.
The solution of course is to build new data centers physically closer to these users and with large enterprises having facilities distributed geographically, colocation and cloud providers need to be thinking seriously about establishing facilities closer to the edge with secure access to multiple networks. In these regional cities or developing markets though, building hyperscale facilities is costly, time consuming and they’d be way oversized for the local market’s requirements. So this is where more flexible prefabricated facilities come in to their own.
Lower cost of entry
The lower up-front cost of prefabricated data centers vs. larger traditionally built facilities, will lower the cost of market entry making edge markets more accessible to service providers and making the cost of the services hosted there more attractive to the ultimate customers.
With prefabricated solutions minimizing their initial capital outlay at individual sites, colocation companies will also see an increase in the total number of markets they can address as they will be able to spread their investment in modular data centers across a larger number of sites.
These factors will open up edge market opportunities for colocation providers, reducing overall investment risk and thereby making them more financially viable.
Speed to revenue
Unlike traditionally built data centers which can sometimes take years to build, the much faster speed of construction of prefabricated data centers will enable colocation providers to start bringing in revenue faster and to respond to customer demands more quickly.
In fact, the speed of prefabricated construction allows a colocation company to build an order book at the same time as building the facility offsite, without any serious risk that they will be late to deliver service.
Informed expansion planning
Traditionally constructed data centers are typically built oversized and then fractionally occupied over time — an expensive and highly inefficient process. By contrast, because prefabricated facilities are built in a controlled factory environment before being assembled on site, the lead times are shorter. This enables capacity to be planned over a much shorter time horizon and then incrementally expanded as the need for more capacity arises.
This provides a number of key benefits:
- Allowing colocation providers to delay expansion orders until much closer to when they are actually needed, when they will have a clearer view of exactly how much and what kind of additional capacity they’re going to need
- Enabling capex outlay to be phased more in line with business growth
- Significantly reducing business risk
- Each new phase can take advantage of the latest innovations that typically increase efficiency and reduce cost
Taking a prefabricated approach effectively introduces an on-demand or just-in-time (JIT) model to the provisioning of data center capacity — an unheard-of concept until now.
A large element of the cost of data centers is the design element. With a prefabricated solution though, using a repetitive design approach will streamline the process, minimize the cost and standardize not only the facility design but also the associated operational processes such as training, support, spares, engineering, etc. In this way repetition not only reduces capital expenses (with lower ongoing design costs) but also operating expenses (with lower and more streamlined operational processes).
Using the same design for every site, means the design cost is only incurred once for the very first facility. Regional variations may be added over time but site-specific designs can be kept to a minimum. Additionally, a standard design opens up the possibility of repetitive manufacturing that further increases efficiency and reduces cost.
Speed to the edge
With increasing numbers of businesses and consumers demanding quicker access to data outside the world’s Tier 1 cities, market opportunity at the edge is growing fast.
There is no question that the next wave of data center development will be the land grab at the edge and the colocation companies that take a prefabricated approach to building their new facilities will undoubtedly be best positioned to take full advantage of this growth market while at the same time minimizing their risks.
Speed to the edge for providers translates into speed to data for customers — a winning formula for both.