Data centre trends 2016
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1 CONNECT IDG and DigiPlex survey Data centre trends
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3 Contents Introduction Key findings Current data centre solution and challenges Advantages and challenges with an outsourced data centre solution Business benefits with an outsourced data centre solution Future data centre plans Growing demands on providers Appendix Industries represented in the survey Survey questionnaire Survey language Reach of the IDG Sweden database as per target group Methodology Process for validating the responses for this study Number of validated responses in this study Response frequency Validation of the CEO target group Validation of the CFO target group Validation of the CIO/IT manager target group 3
4 Introduction With the growing availability of IT housing, cloud services and other forms of outsourcing, the choice is no longer limited to running an in-house data centre. We have asked a selection of Swedish executives and IT managers how they run their current data centres, what they see as the main challenges and opportunities, and whether they are planning or expecting change in the coming 24-month period. IDG Connect Nordics has conducted the study on behalf of DigiPlex to provide understanding of the current market situation, the perceptions of different data centre solutions and the plans for future development. The study was performed using IDG Sweden s databases, focusing on three leading positions: CEO CFO/Financial manager CIO/CTO or IT manager with equivalent responsibility 4
5 Key findings 55% of responding companies today own and operate an in-house data centre. The six most important challenges posed by their current data centre solution are staffing (access/skills/cost), security, keeping up with increasing data quantities, keeping focus on the core business, uptime and high operating costs. The main advantages management see with an outsourced data centre are scalability and flexibility, that experienced professionals manage it, that it provides a predictable cost, high security and guaranteed uptime. The main business benefits with an outsourced data centre are increased flexibility in a changing marketplace, predictable operating costs and greater opportunities to free up resources for the core business. The survey shows a clear trend towards outsourcing. The number of data centres owned and run in-house will drop from 55% to 43% in the coming 24 months. CIOs/IT managers give a more radical response, anticipating a drop to 39%. The interest in new data centre solutions is linked to the increasing demand on data centre operators resources and expertise. The need for flexible technological solutions for customers individual needs stands out in the survey. 5
6 Current data centre solution and challenges We asked respondents about their current situation. How the datacentre solution is today and what challenges they deal with. The survey shows that 55% of responding companies today own and operate an in-house data centre. The six most important challenges posed by their current data centre solution are staffing (access/skills/cost), security, keeping up with increasing data quantities, keeping focus on the core business, uptime and high operating costs. The challenge that stands out is staffing, which includes access to the right personnel with the right skills at the right cost. This may come as a surprise but is at the same time understandable. The shortage of well-educated data centre engineers on the Swedish market and IT becoming ever more business-critical creates an unbalanced situation. It s difficult to find the right people and difficult to keep them in the company. The survey shows there is a difference between what CEOs, CIOs/IT managers and CFOs regard as the main challenge with the current data centre solution. For CEOs the main challenge is that it takes focus away from the core business. CIOs/IT managers and CFOs sees staffing as the main challenge. What is your organisation s current data centre solution? Data centre which we own and operate ourselves Data centre which we own but is operated by an external party Outsourced data centre solution Cloud solution Our entire IT function is operated by an external party % 6
7 What challenges do you experience with the current data centre solution? The solution does not support our business activities The solution does not support the growth of our business Security Lacks ISO certification Uptime Capital tied up in non-core business Staffing (access/skills/cost) Takes focus away from our core business Keep up with increasing data quantities Reduced IT budget Limited investment budget High operating costs Unpredictable operating costs Access to connectivity (network) Energy cost/energy efficiency Eco-friendliness Lack of clarity of where precisely data is stored % What is the main challenge of your current data centre solution? The solution does not support our business activities The solution does not support the growth of our business Security Lacks ISO certification Uptime Capital tied up in non-core business Staffing (access/skills/cost) Takes focus away from our core business Keep up with increasing data quantities Reduced IT budget Limited investment budget High operating costs Unpredictable operating costs Access to connectivity (network) Energy cost/energy efficiency Eco-friendliness Lack of clarity of where precisely data is stored % 7
8 Advantages and challenges with an outsourced data centre solution What do you perceive as the advantages of an outsourced data centre solution? A predictable cost Greater energy efficiency, lower energy cost Clear SLA (uptime guarantee) Scalability, flexibility A solution completely tailored to our own needs The data centre is managed by experienced professionals Frees up internal premises Frees up capital for the core business Better uptime Option of Disaster Recovery premises Higher security Continuous investments Better eco-friendliness and sustainability % Which one of these do you perceive as the main advantage of an outsourced data centre solution? A predictable cost Greater energy efficiency, lower energy cost Clear SLA (uptime guarantee) Scalability, flexibility A solution completely tailored to our own needs The data centre is managed by experienced professionals Frees up internal premises Frees up capital for the core business Better uptime Option of Disaster Recovery premises Higher security Continuous investments Better eco-friendliness and sustainability % 8
9 The main advantages management see with an outsourced data centre are scalability and flexibility, that experienced professionals manage it, that it provides a predictable cost, high security and guaranteed uptime. Scalability and flexibility stand out as the most important benefit. CEOs and CIOs/IT managers see the possibility of increased flexibility in a changing marketplace as the main business benefit. CFOs see predictable operational costs as the main business benefit. Even if the respondents see many opportunities with an outsourced data centre, they also recognise the challenges: It is probably complex to change partners and move data securely and effectively. They fear losing control when the data centre is located away from the company. It might involve a change and/or reorganisation process. CIOs/IT managers and CFOs regard the complexity of changing partners and moving data securely and effectively as the main challenge. CEOs are more inclined to be satisfied with the current operations and ownership situation. What do you perceive as the challenges of an outsourced data centre solution? Lack of effective SLAs/guarantees Internal policies which prevent data being placed with an external party Lack of security and/or integrity The risk that we will lose control because the data centre is not nearby The risk of needing to reduce the workforce Satisfied with current operations and ownership situation Lower cost effectiveness compared to internal operations Difficulty of persuading other internal stakeholders Involves a change and/or reorganisation process Complex to change partners and move data securely and effectively Long delivery time Other % Which one of these do you perceive as the main challenge of an outsourced data centre solution? Lack of effective SLAs/guarantees Internal policies which prevent data being placed with an external party Lack of security and/or integrity The risk that we will lose control because the data centre is not nearby The risk of needing to reduce the workforce Satisfied with current operations and ownership situation Lower cost effectiveness compared to internal operations Difficulty of persuading other internal stakeholders Involves a change and/or reorganisation process Complex to change partners and move data securely and effectively Long delivery time Other % 9
10 Business benefits with an outsourced data centre solution The survey shows that the main business benefits with an outsourced data centre are increased flexibility in a changing marketplace, predictable operating costs and greater opportunities to free up resources for the core business. Reduced stress for staff and/or reduced need for recruitment also rank high in the survey, indicating that future data centre solutions care about both people and hardware. What business benefit do you perceive from using an outsourced data centre solution? Higher returns as investment capital can be used for the core business Increase our flexibility in a changing marketplace Lower security risk Predictable operational costs Lower operational costs including greater energy efficiency Reduced stress for staff and/or reduced need for recruitment Lower carbon footprint and/or help us reach CSR goals Meet the company s goals for reduced resource usage Meet our customers requirements for e.g. ISO certification Greater possibility for freeing up resources for the core business Other I don t see any business benefits % 10
11 Future data centre plans The survey shows a clear trend towards outsourcing. The number of data centres owned and run in-house will drop from 55% to 43% in the coming 24 months. CIOs/IT managers give a more radical response, anticipating a drop to 39%. Today there are three main options for outsourcing a data centre on the Swedish market. Buy the entire IT function as a service from an external service provider. Relocate the data centre to the cloud. Or outsource to a data centre operator/colocation provider. We can see that cloud solutions will grow in popularity in the future, although for certain industries cloud-based services are not an option due to security and other reasons. They may instead opt for a colocation solution. What will your data centre solution be 24 months from now? Data centre which we own and operate ourselves Data centre which we own but is operated by an external party Outsourced data centre solution Cloud solution Our entire IT function is operated by an external party % Current data centre solution 24 month prediction 11
12 Growing demands on providers The survey clearly shows growing demands on data centre operators/ colocation providers. The main areas for improvement are flexible technological solutions for the customers individual needs, reduced prices, the ability to act as consultants and reliable partners, and show a clear return on investments (ROI). What would you wish that providers of outsourced data centre solutions would become better at? Act more like consultants and reliable partners Reduce the prices Offer better SLAs Show a clear ROI Use less technical terms Offer greater energy efficiency Flexible technological solutions for the customers individual needs Tailored financing solutions Other Don t know % 12
13 Appendix Industries represented in the survey The survey was conducted among a broad representation of industries, with a focus on the manufacturing industry and public organisations. Which of the alternatives below best describes your industry? Marketing/Publishing/PR/Media Business Services/Consultancy Finance/Banking/Insurance Hardware/Software Health/Care/Medicine/Pharma IT IT consultancy IT MSP for IT environment Manufacturing/Industry/Workshop Public sector/authority/works/council Wholesale/Trade/Distribution Telecoms/Operator Other Survey language The survey was conducted in Swedish % Survey questionnaire The questionnaire was web-based. IDG Connect and DigiPlex crafted the survey questionnaire. From DigiPlex: Marketing director and communications manager Sara Lindholm, sales manager Johan Berglund and marketing consultant Bertil Timan. From IDG: Connect Business unit manager and project manager Dario Nazemson, content manager Lars Dobos and campaign executive Mina Nedeva. Questions asked in the survey 1. Where in Sweden are you situated? 2. Which of the answers below best describes your industry? 3. How many employees does your organisation have working in your in your country? 4. Which of the answers below best describes your primary job title? 5. Does your organisation currently rent or buy a data centre as a service? 6. What is your organisation s current data centre solution? 7. What will your data centre solution be 24 months from now? 8. What challenges do you experience with the current data centre solution? 9. What is the main challenge of your current data centre solution? 10. What do you perceive as the advantages of an outsourced data centre solution? 11. Which one of those do you perceive as the main advantage of an outsourced data centre solution? 12. What do you perceive as the challenges of an outsourced data centre solution? 13. Which one of these do you perceive as the main challenge of an outsourced data centre solution? 14. What business benefit do you perceive from using an outsourced data centre solution? 15. What would you wish that providers of outsourced data centre solutions would become better at? Reach of the IDG Sweden database as per target group CEO (50+ employees): 2,167 individuals CFO (100+ employees): 2,067 individuals CIO (100+ employees): 573 individuals IT manager (100+ employees): 2,136 individuals Only those responses are reported where we have validated that the respondent represents an organisation with more than 100 employees in Sweden (more than 50 employees for CEOs). The reason for setting the lower limit at 50 employees for CEO respondents is that there is a much larger share of CEOs at these smaller organisations compared to the share of CFOs, CIOs, and IT managers. We have only included IT managers who function as a CIO. In the report we will treat these two roles as one target group. The total number of persons that completed the survey was 318. Of these, 193 responses have been determined to be valid for this study. Methodology We have used a quantitative methodology, based on the assumption that at least 50 validated responses per target group are required for this study. This makes it possible for us to draw conclusions for each target group separately and independently. Process for validating the responses for this study We used the editorial databases of IDG, where all data has been validated by data cleansing, using the services from Largest Companies. Responses to all questions have been validated manually in comparison with IDG Sweden s internal databases and information used on public websites. Number of validated responses in this study A total of 193 validated responses. CEOs: 51 CFOs: 64 CIOs/IT managers: 78 13
14 Response frequency For the period when we could register the response frequency in directed mailings per validated target group (between 24 November and 5 December, as 60% of all responses had been received), we could measure these response frequencies with high certainty. Response frequency per target group: CEOs: 0.5% CFOs: 0.5% CIOs/IT managers: 2.0% Validation of the CEO target group From the CEO target group we have 51 validated responses, based on DigiPlex s requirements for responses relevant to its solutions. Our analysis of response data surprisingly showed that several CEOs stated that they represented organizations with 0 49 employees, when they actually were employed by organisations with 1,000 employees or more. One reason could be that the question was misinterpreted. The graph shows the actual numbers of employees based on validating the data with official information for each respondent s organisation. Validation of the CIO/IT manager target group We have chosen in this study to include responses from 78 individuals in the CIO/IT manager target group, validated according to DigiPlex s requirements for responses relevant to its solutions. The graph shows the actual numbers of employees based on validating the data with official information for each respondent s organisation ,000 or more % ,000 or more % Validation of the CFO target group In this study we have chosen to include responses from 64 individuals in the CFO target group, validated according to DigiPlex s requirements for responses relevant to its solutions. The graph shows the actual numbers of employees based on validating the data with official information for each respondent s organisation ,000 or more % 14
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16 DigiPlex specialises in providing Future-ready IT housing: Data centres that deliver the energy efficiency, scalability, security, and cost efficiency required by today s IT-intensive companies. DigiPlex is the leading IT housing provider in the Nordic region, currently operating three facilities in Oslo, Norway and one in Stockholm, Sweden. The Nordic region s cool climate, renewable energy sources, reliable infrastructure and stable political and financial situation are all factors that provide our customers with maximum security, reliability and sustainability at minimum operating costs. Read more about our data centres and Future-ready IT housing on digiplex.com
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