The lasting legacy of Covid-19 on the data center sector

Much has been written in recent months about the impact of the Covid-19 crisis – we’re all well aware that social distancing and reduced access to workplaces has forced many organisations and enterprises to move operations and processes online for staff who are now working remotely.  

In some cases, naturally, the added strain on IT infrastructures has exposed areas of weaknesses or lacking flexibility within the business to adapt and cope with the extra online workload.  

An earlier 2020 report by data virtualisation firm Donodo found that 75 per cent of organisations surveyed had already deployed workloads into the cloud in 2020, a ten per cent increase from 2019 (worth nothing that this trend was before Covid-19). Impressively, despite the huge workloads transferred to cloud since the crisis, the infrastructure has coped, largely owing to the high levels of redundancy in the global data center network.  

Cloud service providers have played a major role in supporting businesses as they continue to offer increasingly diverse services focused on individual business models. This situation has forced a rethink about how the relationships between customers and cloud provider should be structured. We’ve observed a couple of significant changes in the data center sector that are worth noting.   

• Flexibility: 

Hyperscalers and other large enterprises have seen unprecedented usage of cloud services and applications during the crisis. For instance, Microsoft reported over 700% cloud usage in many regions across the world.  

This added pressure on the network has forced cloud service providers to exercise their lease and capacity option to increase their data storage and processing requirements to keep pace with growing demand. However, while these large businesses have weathered the current storm, they are now quickly banking high volumes of ramp up space to anticipate long-term demand as this shift and migration to cloud environments solidifies and adoption accelerates. As the crisis deepens, the challenge to the industry is whether this further flexibility is delivered when and where it is needed the most.  

• Customer Relationships: 

During this crisis, we have seen customers’ procurement attitude shifting too. Companies are interested in working with data center providers in a new way that changes the relationship into a partnership. Rather than cherry pick from an available list of offerings, enterprises and hyperscalers are now interested in working with partners with a more comprehensive solution tailored to their requirements. We anticipate that large-scale companies will look to consolidate the number of suppliers and solutions providers as they continue to seek out bespoke cloud models that are agile and flexible enough to meet future challenges .  

Modern organisations require incredibly elastic cloud environments and agile infrastructures. While it is important to note that one size does not fit all, this pandemic is also a test of an organisation’s ability to swiftly, securely and systematically scale online applications and communications software, and provide remote access to all employees.  

This situation is still evolving and there are many unknowns regarding what ways of business will look like once the dust settles. However, we have been impressed with how flexible and efficient the data centre industry has been in responding to the crisis and feel confident that it will continue to adapt as we enter this ‘new normal’.