Traffic Growth Justifies New Global Cloud Data Centres

South Africa-based ICT services provider Dimension Data is to bring four new global cloud data centres into service over the next three months, enhancing its global coverage and improving its ability to respond to rapid growth in global Internet protocol (IP) traffic volumes. Meanwhile, data networking specialist Oracle will add four new cloud data centres of its own. Both companies foresee significant upticks in demand for enterprise and carrier-class data traffic management and remote storage solutions, reflecting BMI's optimistic views for data services in general.

NTT Corporation-owned Dimension Data will open new managed cloud platform (MCP) locations at Ashburn in the US, Melbourne in Australia (November 2013), London in the UK (January 2014) and São Paulo in Brazil (January 2014), bringing the total number of owned public MCPs globally to 11. The company will then have multiple data centres in each of the Americas, Europe/Middle East/Africa, Asia Pacific and Australia. The company states that its client base is growing rapidly in the US, Australia and Europe and that multiple cloud data centres are required to support business continuity, backup and replication. The São Paulo facility will be Dimension Data's first Latin American MCP and is designed to serve the needs of global enterprises struggling to obtain large capacity solutions in the region.

Oracle's new cloud data centres will enter service in Q214, adding locations in Canada and Germany to its global cloud infrastructure and taking the total to 17 facilities worldwide. The cloud data centres are essential to the company's transformation from a storage and networking hardware vendor to a software and solutions-led provider. Its Oracle Cloud solution offers a range of integrated services running in a secure, enterprise and standards-based platform.

Outlook Far From Cloudy
Global IP Traffic By Type (PB per month)

South Africa-based ICT services provider Dimension Data is to bring four new global cloud data centres into service over the next three months, enhancing its global coverage and improving its ability to respond to rapid growth in global Internet protocol (IP) traffic volumes. Meanwhile, data networking specialist Oracle will add four new cloud data centres of its own. Both companies foresee significant upticks in demand for enterprise and carrier-class data traffic management and remote storage solutions, reflecting BMI's optimistic views for data services in general.

NTT Corporation-owned Dimension Data will open new managed cloud platform (MCP) locations at Ashburn in the US, Melbourne in Australia (November 2013), London in the UK (January 2014) and São Paulo in Brazil (January 2014), bringing the total number of owned public MCPs globally to 11. The company will then have multiple data centres in each of the Americas, Europe/Middle East/Africa, Asia Pacific and Australia. The company states that its client base is growing rapidly in the US, Australia and Europe and that multiple cloud data centres are required to support business continuity, backup and replication. The São Paulo facility will be Dimension Data's first Latin American MCP and is designed to serve the needs of global enterprises struggling to obtain large capacity solutions in the region.

Oracle's new cloud data centres will enter service in Q214, adding locations in Canada and Germany to its global cloud infrastructure and taking the total to 17 facilities worldwide. The cloud data centres are essential to the company's transformation from a storage and networking hardware vendor to a software and solutions-led provider. Its Oracle Cloud solution offers a range of integrated services running in a secure, enterprise and standards-based platform.

Outlook Far From Cloudy
Global IP Traffic By Type (PB per month)

BMI notes that there has been a marked uptick in data centre construction and expansion in 2013 as ICT services providers, telecommunications operators, internet service providers and major retail companies respond to increased usage of online services for a broadening array of applications. Networking specialist Cisco Systems forecasts total global IP traffic to increase at a compound average growth rate of 23% between 2012 and 2017 to reach 120,643 petabytes (PB) per month. While enterprise-generated traffic will certainly grow steadily, at CAGR of 21%, it is consumer-generated traffic (online shopping, browsing, video streaming, etc) that will be setting the pace (CAGR of 23%). And, increasingly, mobile devices will be originating a growing proportion of traffic (up by CAGR of 66% to 11,157PB per month by 2017).

We therefore believe that large multinational players such as Dimension Data and Oracle are, theoretically, set to benefit financially from the explosion in data traffic through early deployment of high-capacity resources. However, potential downside risks to their long-term strategies include sudden changes in regulations governing storage of citizens' (and businesses') data outside their countries of origin, ongoing issues regarding the reliability of cybersecurity, rising electricity prices (impacting on data centres' profit margins) and the growing likelihood that instances of capacity oversupply and ensuing price competition could soften the value of data centres and related resources, particularly in very mature markets.

European data centres operator Telecity recently remarked on the difficult competitive and business landscape in Frankfurt, Germany, where a host of data centre providers have inundated the market and the resulting capacity oversupply has made trading conditions more challenging than expected. BMI expects that, owing to their size and their deep relationships with end users, Dimension Data and Oracle will be relatively well insulated from changing market conditions, even in the long term. However they would be well advised to keep abreast of local developments and price services and upgrade plans accordingly.

Read the full article

This article is tagged to:
Geography: Global, Australia, Brazil, Canada, Germany, United Kingdom, United States, South Africa
×

Enter your details to read the full article

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.