Redefining perceptions of the data centre: From budget line item to revenue driver

For non-IT executive leadership, the data centre (or, in the somewhat distant past, the “computer room”) has historically been treated like a misunderstood stepchild: costly, high-maintenance… what exactly is going on in that warehouse? This is the mentality that has left CEOs and CFOs clenching their fists while trying to decipher a hefty expenditure that often surpasses a third of the organisation’s IT budget, seemingly without a direct link back to revenue.

But if this is really the case, then why is so much emphasis placed on data centres – and why are data centre strategies becoming more complex and ingrained into businesses?

The simple fact is that for a business with a connected mobile or cloud offering, the data centre serves as the central nervous system – and without it, productivity comes to a screeching halt. Not only that, but it’s becoming difficult to even identify an industry that doesn’t rely on this technology to power much of its day-to-day operations.

But, increasingly so, the most progressive thinkers in industry view the data centre as providing more than incremental improvement in productivity or just a mechanical piece of production infrastructure. They view it as a silver bullet – a catalyst and a competitive advantage.

The (Not-So) Missing Link
In the world of e-commerce, every online transaction, from a simple page view to a credit card order, can be traced back to the precise kilowatt in a given data centre engine. Data centres power the human interaction, data storage, and knowledge sharing that enable connected businesses to increase revenue and build out their customer base.

Take for example the eBay Digital Service Efficiency Dashboard (DSE), which elegantly measures and reports on data centre activity related to eBay’s business model and KPIs.

For a company like eBay, it’s not necessary to have a dashboard to understand that if data centre activity is down, then business volume (and revenue) is also down. That being said, the eBay DSE closely links data centre downtime to exact monetary amounts, which can be extrapolated across the number of active users, servers, even megawatts at a given point in time. For example, in Q2 2013 in the US, approximately $45,251 of revenue was generated per megawatt within eBay data centres.

Not such an ambiguous connection between revenue and the data centre after all.

From Infrastructure to Strategic Differentiator
For a modern company like eBay where the offering resides exclusively online, much of the business is actually built within the data centre, so there exists a mutually exclusive relationship. That is to say, there would be no business without support from a data centre. However, with business models that pre-date the Internet, organisations will embrace a more complex strategy as they feel the pressure to develop more sophisticated offerings.

Take for instance the evolution of the household television service provider. Ten years ago this offering was pretty basic. They offered a few different options in terms of programming that were delivered through a cable in the wall.

Today, with the inception of on-demand and streaming services, this model has been turned on its head. With the ability to stream live programming to a mobile device, or download an episode to a personal computer, consumers are accessing their content through channels that would not exist without large-scale adoption of data centre infrastructure.

These new offerings in the cable business started as competitive differentiators, born in the data centre, and have now grown into healthy revenue streams.

Evolution or Extinction
Without a doubt, technology has changed the way the world conducts business. From electronic tax returns instead of paper tax returns, to cloud storage instead of metal filing cabinets, we live in a time where analogue is slowly becoming a thing of the past.

As part of this change, many business models are being challenged altogether. For publishing and media, shuttered industries have been replaced with new, digitised alternatives -- and the pressure to evolve can be felt across different verticals as well. A simple app connecting people who need a lift with drivers of empty cars has revolutionized the taxi industry. Once we all had travel agents, now we use Expedia and TripAdvisor. Some of us had trusted stockbrokers, now we have IG. All of these industry disrupters grew out of and continue to evolve inside of the data centre.

While many businesses must re-evaluate their strategies in order to stay competitive in an increasingly digital world, the data centre remains an integral resource that not only enables innovation, but also powers the flow of ideas and information that keeps established companies running like clockwork. In today’s information-driven market, data centres are no longer treated as budget-items in need of cost-management – but rather – a defining piece of the business strategy and revenue driver.