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Why The Future of Data Centers Depends on These Six Factors

As enterprises prepare to transform digitally, a key consideration for most large organizations is their data strategy. Specifically, their strategy around where to locate their data centers for the future.

Most business and technology leaders, are already familiar with IDCs forecast of 35 Zettabytes by 2020. That’s certainly old news, now. However, what is interesting is that some business models are starting to consider creating their own data centers.

For example, Walmart has been investing in its own data centers. This investment has not only helped them with the data storage capacity but more importantly, it has made the giant retailer more agile. Agility is a clear winner in the digital age. It’s a key competitive differentiator. Walmart is now able to make over 170000 monthly changes to software that supports it’s website, as compared to the 100 or so changes, previously.

This is significant value added, all because of a better data strategy. Enterprises that claim to have a data strategy but fail to monetize their data, pale in comparison.

But, how good is your current data strategy? Is it something that you can believe in and make a difference to your enterprise and the world, for the long term?

These are questions for the boardrooms and the C-suites.

If your business decides to have its own data center, then according to the data strategy blueprint, you are pursuing ‘data as an asset’. But, for a start where would you locate your data center and what are the parameters to consider?

Here are six key factors to consider for your data center locations.

  1. Energy sources
    • Reliable
    • Cost Stability
  2. Favorable corporate tax rates
    • A climate that is conducive to support business growth in the digital age
  3. Climate suitability
    • Climatic conditions that are relatively less disruptive and more suitable for data center operations
  4. Availability of trainable workforce
  5. Real estate costs
  6. Maturity of the local democratic system

Whilst the first five are easily understood and perhaps manageable through currently know methods and practices, the maturity of a local government that is democratic and functioning in the best interest of its citizen is key. Whether there is an easy acceptance of this or not, ignoring six is likely to pose the biggest business risk. While climatic suitability is also as critical, the whole world is exposed to this risk in any case. And that leaves, the maturity of the local democratic system as a make or break parameter.

A data center in a business model, is a long-term business infrastructure component, that could potentially even outlive the company headquarters, in the digital age. Whilst businesses have to keep an eye on maximizing shareholder’s wealth, they would also do well in investing in communities that would benefit for generations. Ideally, a generation that is mature in managing its governance with freedom based on a sound constitution.

To this end, Vodafone has given us an example by signing an agreementon the 26thof February to create Reykjavik’s first large scale data center, that is to be built in Kroputorg later in 2018.

There are more geographic locations available and you can use the six parameters to evaluate your options.

If your organization needs any help or advice on this matter, The Data Strategy Lab, Switzerland will be able to provide advisory services.