Blurring the boundaries

“In Italy for 30 years under the Borgias they had warfare, terror, murder, and bloodshed, but they produced Michelangelo, Leonardo da Vinci, and the Renaissance. In Switzerland they had brotherly love - they had 500 years of democracy and peace, and what did that produce? The cuckoo clock.”

This is one of my favourite quotes of all time, taken from the film ‘The Third Man’, and illustrates so succinctly, and perfectly, the idea that out of turmoil comes amazing creativity, while out of quiet and normality, comes very little (although, to be fair, the Swiss have turned themselves into rather successful bankers with their ‘quiet approach’).

Right now, in the data centre and wider IT world, we’re experiencing a great deal of turbulence as the evolutionary and cyclical nature of the industry that has been the status quo for as long as anyone can remember is being overturned by the Cloud, the Internet of Things and the online world. Everywhere you look, traditional businesses are under threat from their seemingly smarter, more agile digital rivals.

The data centre industry might still be in the business of supplying the facilities to house all the ICT kit that is fuelling this digital age, much as it has always done, but the reality is that colocation data centres everywhere have been struggling to come to terms with this new, demanding landscape. Gone is the certainty of long term, static contracts. Flexibility, granularity and agility, backed up by demanding SLAs, are today’s colocation currency.

And the colocation customer profile is also changing. Once upon a time, end users dominated the customer list. Now, fewer and fewer end users are being replaced by more and more service providers in most colocation facilities. While the prediction that no end user will own any IT infrastructure or applications appears to be rather optimistic, there has come a certain acceptance of a Hybrid world. A world where some IT equipment will remain on-site, while plenty of it will go out to data centres and, more especially, service providers.

Seeing this shift in emphasis, some data centre providers have been tempted to go down the managed services route themselves. Indeed, right now, one of the largest data centre providers is actually selling off its data centre and colocation business to concentrate on providing managed services. A recognition that the managed services opportunity is huge and, perhaps, also an acknowledgement that it’s difficult to provide colocation services to managed service providers (MSPs) at the same time as trying to sell managed services yourself.

This brings us neatly to the central question of this blog. What is the role of the MSP in the data centre? Well, I think we’ve already covered the role of the data centre/colocation in the managed services world – to provide the infrastructure on which the MSPs can build out their offerings and, preferably, to not compete with these MSPs. But what about the MSPs’ position in the data centre?

Most obviously, the MSPs are creating significant IT ecosystems in many colocation facilities. So, if you’re an end user and, in the new hybrid world, you have some on-premise IT, some colocation IT and the need to access plenty of managed services - choosing a data centre provider who has built up a significant portfolio of managed services clients is not a bad place to start. Issues such as latency, management and billing/cash flow, to name but a few, are going to be much easier dealt with under one roof than several.

On top of this, providing significant choice has always been a major priority and selling point for data centre providers. For example, providing a multiplicity of connectivity and resilience options has always been the hallmark of a good colocation offering. Doing the same for managed services makes perfect sense. Faced with the choice of a colocation who offers the traditional power and infrastructure contract, or a data centre who can offer access to a whole range of managed services covering not just infrastructure but compute, storage, networks and the like, most end users will opt for the latter.

On a different note, right now many MSPS and would-be MSPS (resellers and the like, who know that they have to change from ‘box shifters’ to service providers) are still struggling to come to terms with the best way forward.

Do they build their own data centre and provide services out of this? But one data centre isn’t doing much for business continuity and disaster recovery. Do they simply sign up as a major cloud reseller? Yes, but where’s the value add? Or, do they take advantage of the existing infrastructure provided by a colocation data centre provider, from which they can build and sell a range of managed services? And, obviously, scale up (and down) as required. Plus, the colocation can even provide some monitoring and management tools which could form the basis of a managed service to be sold to end users.

In fact, it may well be that, where previously the data centre provider owned the overall end user/supplier relationship, moving forward the MSP could assume this role – coordinating the various services being supplied to the end user, and meaning there’s ‘one throat to choke’ if things do go wrong.

And we haven’t even mentioned the issue of how an MSP, of whatever size, can access a data centre’s facilities to establish a base quickly and flexibly. Then there’s also the issue of data sovereignty. A managed services provider may well need a data centre in each country in which its customers operate. Building a data centre for such a requirement is unlikely to make sense, but taking space in a colocation facility does.

In summary, the success of the colocation and managed services industries is inextricably linked, and the data centres most likely to survive and better yet, thrive, in the digital world, are those who can build up a significant and diverse managed services ecosystem within their colocation facilities. As Rick says to Louis at the end of ‘Casablanca’: “This is the beginning of a beautiful friendship”.

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