There are 3 key factors that drive data centre market development:
๐น Carrier neutrality
๐น Network latency
๐น Data sovereignty.
Hereโs how they drive the marketโฆ
๐๐ฎ๐ฟ๐ฟ๐ถ๐ฒ๐ฟ-๐ป๐ฒ๐๐๐ฟ๐ฎ๐น ๐ฑ๐ฎ๐๐ฎ ๐ฐ๐ฒ๐ป๐๐ฟ๐ฒ๐
re data centres where there are multiple telecom carriers and Internet Service Providers (ISPs) in the data centre.
Access to multiple networks provides choice, promotes competition, which drives network costs down.
To have a carrier-neutral data centre, you also need multiple network operators in your country or city, this allows the data centre operator to offer network choice in the data centre.
This is something we are grappling with in Africa as a lot of telecom sectors are still closed to competition, which means there is one or few network operators.
When carrier network costs are high, there is less incentive to outsource your computing needs to colocation or run your applications in the cloud.
๐ก๐ฒ๐๐๐ผ๐ฟ๐ธ ๐น๐ฎ๐๐ฒ๐ป๐ฐ๐
Is the time it takes data to travel from one end of a communications (fibre) cable to its destination and back again.
The lower the latency, the quicker an application can perform. As latency increases, it impacts customer experience as the application takes longer to perform its tasks.
For example, as more people sign up to Netflix in your area, shows take longer to open because the limiting factor is the bandwidth of the network, ie there is a limit to the amount of data that can travel down the network at any one time.
Once a certain latency level is hit, Netflix will decide there is a big enough demand in your location and they will locate the data closer to you, i.e. they will locate servers and storage in a data centre closer to you, so that everyoneโs shows load faster โ and we all watch even more Netflix!
Additionally, an implicit message in here is that as latency increases, demand for data increases. Hence, latency and demand are very closely tied.
๐๐ฎ๐๐ฎ ๐๐ผ๐๐ฒ๐ฟ๐ฒ๐ถ๐ด๐ป๐๐
This is a term used to describe how a government, firm or individual controls their data with regard to where it is processed, sent or stored.
Typically, governments will want key data sources held in-country to ensure they have โsovereigntyโ over it as required. Examples of sensitive data that governments generally like to keep in-country are:
๐น State, defence and any other data used in the operation of the country.
๐นBanking information on the flow of funds in and out of the country.
๐นTelecommunications information flow in and out of the country.
The sovereignty of this data drives the location of data centres closer to the origin of power and/or inside country/personal borders.
These are the 3 factors I see influencing the data center market the most, however as each data centre market is unique, there will be local conditions and influence that move the market as well.