Why the demand for speed is driving data centre expansion

speed

Alex Guillen, go-to market manager at Insight UK explains why the ever increasing need for speed is driving data centre expansion.

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Alex Guillen, Insight

In the age when high street consumers expect nothing less than next-day deliveries, immediate access to all things banking and retail, and instant gratification topped up with ease of use and flexibility, it comes as no surprise that businesses are increasingly joining the craze to prioritise speed.

As demand for rapid data processing increases, cloud service providers are now looking to move their data centres closer to their clients to reduce latency. The latest example of this is Google, who has recently revealed it is building a London data centre for the cloud computing services it rents to third parties.

 

Cloud computing – The root of all good

Almost two decades after the dot-com era, we’ve embraced the digital economy and we’re not letting go. Applications have become the lifeblood of organisations and cloud is their number one facilitator.

The cloud industry has now matured to a point where organisations are not only utilising the solution for functional elements like running IT back-up services and archiving, but they’re also taking advantage of its versatility to drive innovation.

With data intensive practices such as machine learning and virtual reality becoming key tools for organisations to better interact with and understand their customers, it’s no wonder than UK organisations are looking for cost efficient ways to carry that extra compute.

And this drive for cost efficiency, off-the-shelf solutions, agility, and disaster recovery capabilities to name a few have made cloud the queen of the party.

The trend to find more robust and efficient data storage solutions will not stop here. And we can clearly see an increased demand for faster data transfer.

Many businesses today are still battling data latency issues, which hamper their abilities to develop and deliver innovative digital products and solutions, retain operational efficiency and handle day-to-day activities. It is encouraging, however, to see both businesses and data centre providers join the race to shave microseconds from data processing.

 

Distance isn’t just a number

While the demand for speed and efficiency is characteristic to many industries, this becomes particularly relevant to the financial sector. Here, ultra-high speed networking, especially used in trading exchanges and brokerages, can provide an advantage of a few milliseconds, enough to earn the company millions per year.

Research showed that when choosing a data centre, brokerages pick based on cost, followed by the proximity to the local exchange, and reliability of power supply amongst other criteria. This is mirrored by other industries, where decisions-makers are on the lookout for networks that are as near real-time as possible, transparent and at low cost.

London, being a tech and business cluster, is home to thousands of businesses that require the above, and once Google has built its London data centre, Google Cloud Platform customers are expected to see significant reduction in latency when they run their workloads in the London region.

As such, the tech giant itself confirmed that in cities like London, Edinburgh, Dublin and Amsterdam, their performance testing showed a 40% to 80% reduction in round-trip latency when serving customers from London compare to the Belgium region.

This means that companies both big and small can now compete on the same level as they can all access the same capabilities – data centres offer unrivalled opportunities to unlock their growth potential. As businesses undergo a transformation process to meet the ever-increasing needs of their customers, we see the demand for cloud services soar.

 

Colocation and other solutions

Reducing the distance between two sites can considerably improve network performance, and that explains why many other data centre sites are located close to financial centres for example, or even inside stock exchanges.

However, a side effect of this is an increased competition for colocation. This drives prices up and increases strains on power reserves. An alternatively solution could be faster networks.

Various technologies can have an effect on how well a data centre is performing. Both the distance data has to travel and the bandwidth the colocation provider has impact user experience. It is clear, however, that data centre solution providers are now striving to implement the latest technologies as well as using old tricks to provide the best experience for their customers.

After all, time is money.

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