Data Center Ownership – The question shaping business leadership thinking

by Jul 17, 2019





CIOs and CFOs are finding new answers

In a changing digital landscape, how can CIOs find greater value from the owned and managed data center assets through which they ensured years of secure day-to-day business operations?

This taxing question is shaping the thinking of many senior IT leaders.

Digital transformation is firmly on the board agenda, and changes in thinking about digital infrastructure ownership and operation are never far behind.

CIO-CFO-Discussing-Data-Center-Economics-TransformationAs questions about the value of data center assets and digital strategy are discussed at the highest levels, the closest C-level relationship for many CIOs is often that with the CFO. In a changing discussion on value, risk and return, CIOs and CFOs are exploring new thinking in disposing of data center assets. The economics of the data center have shifted and this is challenging the CIO to think differently.

The answers lie in what ServerFarm calls Data Center Economics Transformation.

 

For many enterprises, scarcity, criticality and availability were once the key fundamental drivers which led teams to invest, build, own and operate data center infrastructure. The decision-making process was sound and the solutions provided were fit for purpose.

But the fundamentals are shifting, and so are attitudes to ownership.

“The one size fits all ownership era is ending.  But achieving flexibility should not be at the cost of certainty.”

Technology-driven disruption means we operate in a world where it is increasingly difficult to justify long term capital deployment at scale for data center infrastructure. This is pushing many businesses to explore selling off their physical assets.

‘Show me the money’ short termism

In times of uncertainty, with decision-makers on the hunt for new value, CFOs are increasingly driving an agenda that says ‘sell these assets, get it off the books and bring me back the money.’

Today’s conversation, as often directed by the CEO to the IT director, is: ‘You’ve got all these assets, but people now go to cloud so why do we have these data centers? Is there a market for them? Can we sell them?’ In this way, the pressure from the CFO transfers to the CIO.

Some conversations might develop like this: ‘We’d like to explore transferring our physical assets to a new owner and taking back what we need on a colo basis.’

ServerFarm looked at the way things are now, the way they should be and ultimately, the way they have to be.

CIO-CFO-Cloud-Application-Migration

For some CIOs this may be seen as providing an opportunity to accelerate the migration of applications to the public cloud.

These are common considerations across most, if not all, sectors. But as digital disruption hits the business, ServerFarm believes that some companies may be missing out on opportunities to positively reshape their data center strategy. By focusing on short term objectives, they’re skipping over strategy that provides all of the certainty of data center ownership with the capital efficiency and operational flexibility of cloud.  

For those with existing data center assets, a traditional sale and leaseback approach focused on long-term contracts surrounding fixed assets may not always be the best solution for the enterprise, financially or technologically.

Just as digital transformation is disrupting businesses everywhere, ServerFarm is bringing disruption to decades of traditional thinking in the financing and operation of data center physical infrastructure. 

If the goal is to facilitate a long-term strategy that creates wealth for the enterprise, cuts costs of operations and future proofs the physical environment, ServerFarm’s approach of DC Economics Transformation and DC Operations Transformation has the answers.

ServerFarm recognizes that, just as no two businesses evolved identically, so no two data center fleets are the same.

Using decades of experience and expertise in operating its own data center fleet, ServerFarm brings a unique perspective to financing and operation of digital infrastructure.

Traditional-Data-Center-LeasebackSeverFarm’s approach to Data Center Economics Transformation and Operations Transformation efficiency is already benefiting many organizations. Under ServerFarm’s guidance, enterprises, telcos and cloud providers are finding value in their data center assets. They are cutting expenditure though the outsourced management of the physical data center and IT operation.

The decisions made today by CIOs and CFOs around data center ownership and operational efficiency are long term and are key to the success of enterprise digital transformation.

The one-size-fits-all ownership era is ending.  But achieving flexibility should not be at the cost of certainty. By thinking holistically, CIOs and CFOs will find better approaches than traditional sale and leaseback. Many are already doing so.

Now Read: DC Economics Transformation – Solving the CFO’s problem while addressing the complex challenges of the modern CIO

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