The lap of luxury

Initially, luxury doesn’t seem to be a concept that has much demand in the data centre world. After all, luxury is often as much a product of marketing and aspiration as anything else. Such products may look appealing, but may offer little real value above a lower-cost alternative other than the ability to boast to the neighbours. In the world of data centres, where the concept of ROI is crucial, the equivalent of a gold-plated iPad will get little traction with CIOs and CFOs.

However, luxury can also be closely linked to the idea of performance, as anyone reviewing the luxury car market can tell. When viewed in this light, the idea of a ‘luxury’ data centre becomes more attractive. Whether due to sheer processing power; reliability; security; location; or energy efficiency, there are a number of reasons why businesses may want to place their IT services in a facility that does not necessarily provide the best ROI. In the DC industry this could take the form of an over-engineered Tier IV facility with a marble foyer, comfortable meeting rooms, List-X levels of security as standard etc.

The end of luxury?
The increasing commoditisation of IT infrastructure has had interesting implications for the idea of a ‘luxury’ data centre. Primarily, the performance that a luxury facility should be able to provide is now much more within reach. For instance, most IT departments have realised that servers come from an Eastern OEM anyway. As a result, you might as well buy them direct rather than pay the huge premium for a “tier 1 vendor” badge on the front. This means that IT departments are becoming savvier customers, and will expect much more for their investment. On the other hand, it also means that smart data centre providers can give their customers the performance they demand at a lower cost.

However, this commoditisation has also given businesses more ways to get the data centre environment they need. Functionally, there is increasingly little or no difference between building or leasing in-house data centre capacity, leasing colocation capacity from a data centre provider, leasing IT capacity in the cloud or renting IT services from the cloud by the hour. In such a competitive market, differentiation becomes crucial, but also more difficult. Attempting to differentiate on price simply leads to a race to the bottom; with businesses becoming increasingly cost-conscious, cloud service providers, colocation companies and data centre builders and consultants are all chasing after the same pie. In this environment, ‘luxury’ is continuing to become less and less important than addressing the precise needs of customers.

Giving the customer what they need
When selling any business tool, from a stapler to data centre infrastructure, providers need to ask: “do my customers need this?” While a high-performance data centre full of top-of-the-line facilities and equipment may look good on paper, cost-conscious customers are likely to decide that they simply don’t need the performance it offers for the price it demands. Just as most businesses will choose a fleet of Ford Transits over a fleet of Bentleys, so those that need data centre infrastructure will choose the provider that gives them the level of performance they need at the best possible price.

This is especially true when considering the level of performance IT services demand. For instance, the majority of IT services simply don’t require the level of resiliency that a Tier IV data centre provides. Using a high end data centre for anything but an organisation’s most business-critical services is essentially wasting money, and more and more organisations are realising this. Instead, what the majority of organisations want more than anything is confidence that they are spending their money in the best possible way. This may mean placing their most sensitive services in a top-of-the-line Tier IV data centre; it may mean moving IT services from in-house to the cloud if they believe it will cost less in the long run; almost certainly, it will mean a combination of tactics that suit the business’s exact needs.

The way forward
In this environment, data centre providers will see the best results by giving customers this confidence. If a provider can guarantee both the performance a customer desires, and also the cost of that performance over the data centre’s lifetime, then that customer will be able to plan their IT investment precisely and be far more comfortable entering into a business relationship. In order to provide this a data centre provider needs to have a full understanding of its costs; both in the present and also for the rest of the facility’s lifespan. If the provider can predict its costs down to the pound, it can offer price guarantees to its customers with the knowledge that it isn’t either pricing its services too high damaging its future sales, or offering such a bargain that it damages its own bottom line. Accurate prediction also means the provider can advise customers how they can make any further investment in their services to ensure they are receiving the best possible value for money.

It may be that the idea of a ‘luxury’ data centre has had its day. However, the greatest luxury most businesses truly desire is peace of mind. By offering clear, guaranteed costs and performance guarantees, whatever their customers’ needs, data centre providers can make this peace of mind their greatest asset.