How Colocation Mitigates Supply Chain Hurdles for the On-Premise Data Center

December 17, 2021

The impacts of COVID-19 on the supply chain are well documented. Lengthy closures of manufacturing plants have been compounded by bottlenecks at U.S. ports and a lack of drivers to transport products. According to the Institute of Supply Management (ISM), about 75% of businesses have experienced pandemic-related supply chains disruptions.

Data centers are not immune to these issues. In fact, the instant, sweeping shift from in-person interactions to online activities was a bit of a one-two punch for the data center. The increased reliance on telehealth, virtual education, video conferencing, online financial trading, streaming media and gaming fueled the amount of data being created and consumed. A comparison of the average daily in-home data usage in the U.S. in March 2019 and March 2020 showed a 38% increase—with similar growth in 2021.

As data continues to soar, on-premise data centers face widespread supply chain constraints that significantly lengthen lead times from weeks to months or more to procure the additional infrastructure to meet this intensifying demand.

On-Premise Data Centers Lack the Necessary Supply Chain Relationships

Most on-premise data centers lack the buying power and strategic supply chain connections to quickly acquire data center equipment, such as UPSs, generators, servers, racks and CRAHs. These facilities generally order these components every couple of years, and, as a result, do not have the necessary contracts in place to support growing demand or an unexpected system failure.

In an increasingly technology-driven landscape, the ability for data centers to access additional infrastructure is essential to promote performance and uptime. An unreliable data center means the enterprise, its customers and partners cannot access and share data and perform key business functions. With the cost of downtime recently calculated at $84,650 an hour, enterprises have a lot to lose if their supply chains cannot support their needs.

The Value of the Third-party Data Center

While no one is immune to supply chain disruptions, third-party data centers can more easily weather these challenges.

Tremendous Buying Power and Supply Chain Relationships
With their core business focused on data center management and operations, third-party data centers continuously buy and refurbish equipment to encourage the health and reliability of their facilities. Providers that operate multiple, large-scale facilities across the country and support thousands of customers have enhanced buying power because of the sheer volume and frequency of these purchases. They also have deep, diverse supply chain relationships to ensure they can procure equipment more quickly to keep ahead of need and help their enterprise customers address uptime challenges and risks. The ability to multi-source equipment helps support rising demand, regular refreshes or unexpected issues significantly faster than an enterprise could on its own.

Rapid Scalability
In addition to minimizing lead time, third-party data centers also already have the critical infrastructure in place to support additional capacity requirements. The ability to easily scale an environment to meet growth demands or attain the resources to develop a new product is crucial. This can increase speed to market and deliver a significant competitive advantage over a competitor that is going it alone. Colocation providers with cloud services can support this scalability even more quickly.

Third-party data centers also build in a series of resiliency plans and best practices to minimize supply chain challenges and ensure their continued operations. Redundant infrastructure, including critical equipment, power feeds and connectivity options, ensures an enterprise’s availability and business continuity in the face of an equipment failure, natural or manmade disaster, or any other event. This allows operations to continue uninterrupted while maintenance is performed, an issue is addressed or a new component is installed. On-premise data centers may not have these robust redundancies in place, leaving them at risk of downtime while they wait for new equipment to arrive.

Data center providers with multiple facilities can also transfer underutilized equipment between locations to support added capacity requirements or an unforeseen outage to ensure the strength and resiliency of the environment. Third-party data centers guarantee specific uptime and performance levels through strict SLAs.

Preventative Maintenance Program
Multi-tenant data centers also utilize routine, preventative maintenance programs and schedule equipment refreshes to further optimize performance and avoid equipment failures. By identifying issues before they threaten availability, data centers promote the overall well-being of the environment. This strategic planning is even more essential than usual to sustain stability amid longer equipment lead times.

The Data Center Labor Shortage
The pandemic has amplified the existing data center workforce shortage. According to one study, 73% of data center leaders reported difficulties recruiting data center personnel. Without this highly skilled workforce, the operational integrity of the data center can suffer. Third-party data centers have this skilled workforce on staff, allowing enterprises to leverage these teams and avoid hiring and retaining this shrinking workforce.

A Final Thought

The supply chain challenges brought on by COVID-19 are not going away anytime soon. According to economist John Rutledge, the pandemic will continue to impact the global supply chain into 2023. Enterprises need to carefully assess how reliably and quickly they can procure new equipment to meet escalating demand and contend with unanticipated events. A third-party data center can ensure enterprises have the resources they need to future proof their businesses and remain productive, competitive and profitable in uncertain times. To help minimize uptime challenges and risks—especially as supply chain disruptions continue to impact business—enterprises should consider colocation.

Ryan Mallory, Chief Operating Officer, Colocation Services

Ryan Mallory

Chief Operating Officer

As COO for Flexential, Ryan drives operational excellence and performance optimization for the integrated colocation and interconnection portfolio - including colocation services, cloud managed services, backbone, real estate, data center and network operations, desi

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