A recent business conversation led to the establishment of the fact that the Data Center business is becoming much cut-throat than ever. Incidentally there was also recently a well covered article posted in the Globe and Mail that provided an overview of challenges the current Canadian Telcom and Datacentre industry is facing.
Price wars, advanced offerings, upsells and what not are the usual tactics that have been used, but now competing forces are pressuring Data Center providers to go beyond the usual and utilize something new. Data Center businesses are now relying more and more on leveraging strategic footprints. Global presence and larger capabilities to educate and work with customers at a local level. In the United States alone, there are an estimated 3 million data centers. With data center services more abundant than grocery stores how will the model sustain itself and what will determine the winners from the losers? My answer to that new is Granularity!
Granularity Needed by MSP's
Managed Service providers (MSP) work day in and day out with end users. The core of their business revolves around providing cloud services and solutions to their customers. This may include computing power, database, hosting, storage and many other services that are cloud based. MSP's however are facing a challenging time as well. That too on two fronts. One on their relationship with Data Centers, where the need for granularity is evermore needed. Consider this, IOTA Services, a medium scale MSP has over 800 customers they work with. All 800 customers are hosted on a third part datacenter owned by TrueNorth Data Centre. At the end of every month, TrueNorth Data Centre Provides an invoice to IOTA Services for all their utilization of the infrastructure within the Data Center. IOTA Services then looks at what aspect of the infrastructure is used by each customer and the splits the invoice based on a homemade logic consisting of multiple excel worksheets. This is one of the biggest challenges faced by MSP's overall, the Granularity of consumption. Data Centers today can really propel into the success domain by helping MSP's deal with their challenges. Providing Data and infrastructure services today is not enough and having more control over your information, infrastructure and the consumption of it is key. If Data Centers reply in MSP's to drive their business, it makes more sense to empower SP's with what they need to drive the business forward. In my opinion the samurai sword of the situation is to provide
Ultimate Value for End Users
MSP's on the contrary are now able to completely view the usage of infrastructure and services at the datacenter level and can easily make sense of all the services used by each of their customers. This plays a key role at the end user level where say a small consulting company that uses IOTA Services to host some of their data and exchange server, can now see exactly how much it costs them from an IT aspect. Of course assuming there are adequate margins and other business due diligence in place. End users may have proprietary software or nice software solutions they have deployed. Knowing how much in very precise terms becomes invaluable.
More Reasons for Granularity to Be Key
As software solutions have evolved, we now are at a time where the consumption of IT is a key aspect in every business. I have spoken about the need for chargeback and empowering IT to charge back the services and solutions they offer in an enterprise environment for this very reason. Unless you have such a unique offering that nobody else offers it in the Universe, you sure are facing the same economic terms everyone else is. Be it the economy, the need to lower expenses, the need to improve margins and the absolute need to scale. Everyone has the same set of problems. Knowing where you spend, stopping the bleed and optimizing the business are just essentials you should be doing anyways. As a business end users, I absolutely do not want to pay for anything that I do not use. This trend of consumption is growing, be it in our personal lives or the workplace. Enabling this value proposition forms the bedrock of business profitability.
Where to go from Here ?
Here are my concluding thoughts. We all are going to use a lot of data and IT services going forward. Data centers are amazing with the offerings they have and so are MSP's who are providing much needed solutions and services to millions of businesses and essentially helping organizations enable and embrace the cloud. Unless we have an element of granularity built into the billing of Cloud solutions and services at every level, we are going to face the challenge of not being happy for what we pay. This is purely because human beings love granularity and businesses especially need granularity to make sense of what they are spending. Global economies are not helping either. Whether it is Canada, the United States or China, daily changing market conditions and economic conditions makes conducting business more difficult.
Let's make 2016 the year of Granularity and help bring more knowledge to what we consume. Let us also engage in a meaningful conversation with our customers, clients, service providers and peers to know more about the Consumption Model, Cloud, Chargebacks, and of course granularity. Do you have ideas about Cloud granularity? For the sake of value, let's start a granular conversation.
About Ian Khan: I am the Author of Cloud Wars, The Internet of Things & the Future of Innovation, Make Me Like You, 21 Steps, Get Ahead . I am a Technology & Business enthusiast, deeply passionate about helping people and businesses simplify their understanding of technology and how it can help derive more value for the betterment of humanity. I work with organizations of all sizes, evangelizing technologies such as Cloud Computing, Internet of Things, Business Intelligence and the Internet. Reach out to me to learn more about Cloud computing technologies, IoT and beyond. More than anything else I am a mentor, a business coach and a friend to many people, all of who bring enormous joy to my life. Visit me at www.iankhan.com to learn more