The Data Center Frontier Executive Roundtable features insights from industry executives with lengthy experience in the data center industry. Here’s a look at the insights from Chris Sharp of Digital Realty.
CHRIS SHARP, Digital Realty
Chris Sharp is the Chief Technology Officer of Digital Realty. Chris has over 20 years of experience in the technology industry, with an extensive background in developing technology strategies in global markets. He has a deep knowledge of the data center sector and is well positioned to expand technical innovation at Digital Realty. Most recently, he was responsible for cloud innovation at Equinix, where he led the development of innovative cloud services solutions and developed new capabilities enabling next-generation, high-performance exchange and interconnection solutions, facilitating broad commercial adoption of cloud computing on a global basis. Previously, Mr. Sharp held leadership positions at top network and colocation providers, including Qwest Communications, MCI/Verizon Business and Reliance Globalcom.
Here’s the full text of Chris Sharp’s insights from our Executive Roundtable:
Data Center Frontier: What is the one trend you believe will be most significant in shaping the data center industry in 2018, and why?
Chris Sharp: I think data and compute proximity, and the effect they have on the data supply chain, is the most interesting dynamic in the industry today. While it may be something of a sleeper in terms of issues that are really driving change, the ability to understand its criticality will really separate the winners from the losers in 2018. Enterprises’ dependence on data to derive actionable insights is growing. Their success there is determined to a large degree by their ability to find providers who can help them put them as close together as possible, so that performance, availability and security are all assured, regardless of the scale.
I think 2018 is also the year of SaaS because there’s so much demand for services and there’s so many tailor-made SaaS applications that are entrenched in solving their unique business problems. It’s less about how much compute and storage you have, and more about your SaaS application and how your customers consume it.
How SaaS is consumed is changing, and how that change is occurring is critical. SaaS interconnectivity is much more complicated to do privately than it is over the public Internet, but the Internet degrades performance and security, making SaaS unusable. If you don’t have the ability to normalize that consumption, using layer two for compute and storage and layer three for application delivery, you’ll be left behind.
Data Center Frontier: 2017 has been an interesting year for wholesale data center providers. Some have focused on winning huge hyperscale deals, others on expanding into colocation and interconnection, or targeting key industry verticals. How do you see the landscape for wholesale providers evolving in 2018, and what do you see as the keys to success?
Chris Sharp: You can’t solve the complete architecture for a customer with one product. What we’ve had to date is data center providers pushing colocation because that’s what they had, or scale because they had that – that’s over. Also, you can’t just wake up one day and do hyperscale, especially hyperscale with interconnectivity. If you don’t have the expertise – deep expertise in each of those respective areas – you’re going to fail.
All customers have a multi-tiered architecture. You solve part of it with colo and another part of it with scale, and you just can’t ignore the economics associated with that, nor the fundamental underpinnings of the product. Because at the top of that pyramid is their network nodes ,which are drastically needing these interconnections products: cross connect, metro connect, internet exchange. And then at the bottom of that scale is a larger farm of infrastructure that needs to be need efficient – and I mean energy efficient, where you can hit the right PUE utilization level for a larger, multi-megawatt footprint. Being able to marry those two together is critical.
The real differentiator, though, is hyperscale, and that’s the hard one to hit. The density of the ecosystems required and the sheer size required is immense. You could fit two aircraft carriers in our Building L in Ashburn, Virginia. That’s hyperscale. Right? But, you can also get colo and our full interconnection product in that same environment, and that approach – fully distributed and available on a global basis – is what’s really required to excel in this market.
The first phase of Digital Realty’s Building L of its Ashburn mega-campus will support 36 megawatts of IT capacity. (Photo: Rich Miller)
Data Center Frontier: Data center geography is a hot topic. What geographic markets will be strongest in 2018, and why? What are the up-and-coming markets that may make headlines in 2018?
Chris Sharp: It’s less to me about the hot news markets, and more about how and why markets get and stay hot. There’s a level of efficiency for natural expansion with an existing tier one market, and that’s where we see a ton of demand from major cloud service operators who are expanding to meet the need of their broader consumer base. You can’t service the world from one market, but you can service it from ten. So, you’re going to see further expansion in all the tier one major markets.
That said, enterprise and cloud needs in Asia and Europe are only continuing to accelerate, which is why we’ve done some of the builds that we have done in Japan, Germany and the Netherlands.
Data Center Frontier: The data center industry has seen growing interest from new investors and a wave of mergers and acquisitions. How might these trends shape the competitive landscape in 2018?
Chris Sharp: I would say there’s a lot of money in the market right now and there’s a lot of uninformed money. There are a lot of people that are trying to come to market and just buy their way into it. If they don’t have the understanding of the complexity of how to procure power, something that people think is very simple, or how to work with a municipality to build out substations, money doesn’t give them that.
There’s been a lot of customer failures that we’ve learned about where people are just trying to go into market, build a data center and forget about it. You’ve got to be very mindful of the expertise and the ability required to operate these facilities on a go-forward basis. Even so, that’s just the bare bones.
The most critical element for success, and this is a massive oversimplification, is the ability to develop and provide the right mix of all of the elements need for success of all of the customer groups that you serve as a data center operator. Achieving just the right balance of fully-interconnected wholesale/scale, retail/colocation and cloud services for enterprises, telcos, cloud providers and content providers, with all of their subsets – it’s hard to even conceive. It’s much harder to do, but that’s the market we’re in, and we feel we’re doing it right.