Managing a data centre transformation

The massive growth in global IP traffic and cloud services market is great news for data centre operators but only if they can expand their infrastructure fast enough and provide the best connectivity to their customers.

Over the last year or so the data centre has evolved fairly dramatically. Traditional data centres are no longer simply cages full of infrastructure or viewed as warehouses for storing large amounts of information.

According to the latest Cisco Visual Networking Index, annual global IP traffic will quadruple by 2015, reaching the zettabyte threshold by the end of that year. Gartner foresees the cloud services market to increase threefold, from $US50 billion to nearly $US150 billion in 2014, increasing traffic for business IP and private networks.

Despite these growth trends, the Telecom Industry Association is forecasting that overall network CAPEX spend will grow at a meagre two per cent per year between now and 2014.

The massive growth in demand for IP-based services is great news only if you can grow your infrastructure fast enough to keep pace with demand and if you are building that infrastructure where you can easily sell to – and connect to – the greatest number of the most profitable type of customer, offering them increased performance and interconnections.

Network demand and the need for performance

With the rapid proliferation of connected services and the advent of new services in entertainment, gaming and even financial trading on Wall Street, the data centre today is increasingly seen as a means to gain a business performance edge. The explosive growth in mobile, content, and cloud-based data traffic all require an unprecedented level of data networking efficiency, reliability and scalability in order to ensure quality of service for customers, partners and end users in destinations around the world. It also opens up tremendous revenue opportunities for high margin retail services such as Ethernet and MPLS (Multiprotocol Label Switching).

To remain competitive, network operators have no choice but to expand their infrastructure to meet demand for these new high-growth services. However, when it comes to how an operator plans for – and manages – that growth, they now have a very clear choice. They can opt to deploy in traditional telehouses or carrier hotels, and continue to focus on wholesale services, or they can invest in “retail data centres” that not only offer all the network-to-network connectivity of a telehouse, but also act as aggregation points for concentrations of retail customers in network-centric industries. These “revenue centres” contain concentrations of highly profitable potential customers in key business markets around the globe.

The trend toward greater IT efficiency and collaboration is supported by Equinix through Marketplace, a portal for organisations to connect and do business with one another. This new service allows customers to drive opportunities for collaboration, enabling companies to form partnerships, create new solutions and execute strategies that ensure the long-term viability and scalability of their business models.

We’ve also seen a real shift in how businesses and even governments perceive the role of the data centre. The data centre is now seen as an essential part of any cities’ infrastructure, which is critical in supporting the sustainable growth of traditional and new pillar industries such as financial services and cloud computing.  

High frequency trading drives demand for low latency platforms

As trading strategies continue to grow more complex with new trading platforms such as HKMEx and Chi-X Australia, commodities exchanges and independent liquidity aggregators like Chi-East, are driving the development and regulation of trading across Asia Pacific. The changes in the trading landscape across the region and the need to remain competitive is resulting in financial institutions adapting their technological infrastructures to meet growing requirements to ensure they achieve the type of low latency, high performance, stable and resilient trading system that the market demands.

Cloud infrastructure evolves away from single data centre locations

Cloud service providers are also learning that latency matters and that minimising end-user variability to services is critical. Gone are the days of running an application in a single data centre and serving a global community. The future of cloud services includes well thought out deployment architectures that are distributed across multiple data centre geographies, multi-tiered to gain economies of scale and performance, and precisely connected to end-user communities with multiple networks to optimise access to cloud services.

In the enterprise sector, we continue to see an interest and willingness by CIOs in Australia to adopt cloud services, therefore we also expect to see greater deployments of distributed cloud solutions and accelerated demand for ‘data portability’ between clouds, as well as more dynamic SLAs around cloud performance and security.

Tony Simonsen is the managing director for Equinix Australia and responsible for the overall performance of the company’s IBX centres in Australia.  

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