Andrew Kirker is a man who knows the datacentre market better than almost anyone. As regional general manager datacentres for Schneider Electric, one of the world’s largest manufacturers of datacentre infrastructure, he has his finger firmly on the pulse.
“Over the past few years the definition of a datacentre has changed. If you look at the old IDC definition, a datacentre was any piece of infrastructure with active compute. That consisted of 100,000 centres in Australia and New Zealand (A/NZ),” he said.
Kirker explained that the real definition of a datacentre is a bit more tricky. Over the past few years, the firm has built or been involved in the construction of close to 1000 facilities in A/NZ.
“You have a changing market at the moment, we are seeing a lot of larger datacentres being constructed. There were 130 super-sized datacentres constructed worldwide in the last twelve months. That’s just in the colocation market.”
The enterprise end of the market is relatively flat while colocation is on the rise. The colocation market in Australia grew 18 per cent last year.
Kirker identified Sydney as one of the distinct markets for enterprise and colocation datacentres.
“In Sydney, capacity has slightly exceeded demand in the past 12 months but we expect that to even out in the coming year. We are expecting colocation utilisation rates to get up around 90 per cent.”
Currently the demand for space is running at about 15 per cent, while supply is at 13 per cent. There are 39 players in Sydney with 67 datacentres and around 35-40 thousand racks. Kirker commented that 50 per cent total datacentre space is now in third party facilities.
“We will continue to see capacity come on line. If IT is the vehicle of commerce, the datacentre is the engine room.”
“I certainly see continued growth, I see continuing opportunity for the channel as well because it is not a pure outsourced market that we are seeing out there. It is certainly a datacentre ecosystem that is being procured by organisations that are using a mix of colocation, Cloud services and on-premise,” said Kirker.
“For partners, if they can get in the middle of that and help their customers navigate that journey, there is a lot of opportunity amongst that, it is one of the themes I will be talking about at the partner summit,” he said.
He was quick to point out that demand was a key driver for growth in the datacentre market.
“You’re getting that driver of Cloud into colo, you are getting still some pretty big wholesale deals done, the banks have embraced it over the last few years, although most of them are maintaining a mix of on-premise and colo.”
Kirker went on to say that he did not see any one key vertical as an outstanding driver for growth in the market.
“Every industry is dependent on IT and datacentres these days, for those organisations that are embracing Cloud and colo, the primary drivers are around data sovereignty, latency and the prefered business model of the organisation, weather they are a capex or opex focussed organisation.”
“If you look at hospitals for example, they are big users of datacentres, but are not putting those datacentres into colo, we are seeing the vast majority of them build in their own datacentres and as a result they are not a primary driver for growth in the colo market. The utility organisations that are used to making capital intensive purchases. They are not embracing that market either.”
Kirker said newer organisations are looking to colocation as an option because they have other priorities than investing in their own data centre.
“The market is growing because organisations are deploying evenly across on-prem, colo and cloud. Watching the way it is playing out, it is definitely an ecosystem.”
When asked about the transition to public Cloud and how rapid the shift would be, he said, “I think we are too much into our data sovereignty in Australia to see that grow at a rapid rate.”
Schneider Electric partner summit
Kirker took some time to chat about the Schneider Electric partner summit coming to Sydney’s Luna park on March 4.
“The main goal is to get partners to understand what’s really going on in the datacentre market.”
“There is a lot of confusion in the marketplace around what the sales guys should be doing. There is still a lot of paralysis by analysis out there. Customers are wanting partners and vendors to help them more. If they understand the business drivers behind why customers are making decisions, then they will be better placed to help navigate the journey.”
“The other thing that we blatantly try to do at these events is get people talking together. If you are a colocation provider, you do not have all the tools in your bag necessary to set out a datacentre strategy for an organisation. If you’re a reseller, you might not either.”
“It is an opportunity for people to understand how partnering is critical in the IT landscape, no one has all the answers. Any salesperson that goes in trying to push a single barrow is not going to be seen as a consultant , we try and give people an idea of where the market is heading and what customers are wanting.”
The challenge for resellers
Kirker said lack of understanding of what is going on in the market and lack of ability to help take customers on the journey of what their datacentre strategy will look like was the main challenge facing resellers at the moment.
“It has generally got harder. I have been on the edge of this industry for 20 years and it has become harder for both the customer and the seller.”
“The main problem is a lack of willingness to understand the business problem and architect a solution around that. There are a lot of lazy customers and a lot of lazy sales guys out there.”
“There are a lot of good people that are making solid ground and we are definitely seeing the pace pick up and that is evident in some of the numbers we are seeing. However, it is still a little flat out there for most organisations, particularly if you are selling x86 servers.”
Mobility is key to market growth
Kirker said mobility had been, and would continue to be, a major contributor to growth in the sector.
“If you look at where the growth is coming from, if you take out mobility, I don’t think we would be seeing any positive growth at all in the IT market. Without mobility in the density optimised category, the server market would not have grown at all last year.”
“The good thing about that is it does show we are getting more efficiency in IT, I am a big proponent of density in datacentres. If someone can create high density in IT environments, we can build a better data centre and a more efficient data centre around that.”
“Density is our friend in terms of energy efficiency,” Kirker said.
“Technological developments, like flash, will certainly do some good things for datacentre efficiency, and we need some stuff like this. Last year, energy consumption in data centres grew by about eight per cent, and considering we are supposed to be putting more things into larger, more efficient data centres, the demand for IT is outpacing any energy efficiency gains that are being made.”
The APC by Schneider Electric Partner Summit will be held at Luna Park on Wednesday, March 4. The event will feature presentations by Kirker himself as well as Schneider Electric global vice-president for IT business, Francois Vazille.
The summit will also include insights from industry analysts and networking sessions for vendors, distributors and resellers.
Schneider Electric is expecting 300-400 people will attend the summit with a good presence from across the Australia and New Zealand.