The data centre challenge behind digital transformation

Digital transformation has reached a turning point. Businesses have now added so many new applications and need so much data consistently available, that accessing sufficient capacity in data centers is becoming a challenge.

Cadence (Future Facilities is now Cadence) has conducted market research, interviewing over 750 technical practitioners and digital strategists to investigate some of the sector’s most pressing trends. This encompasses small, mid-sized and large companies across a range of sectors, including Software/Technology, Financial Services, Government, Manufacturing and Healthcare.

Data Centers: The Heartland of Business Transformation

Digital transformation was inevitable for all businesses, but various factors—most notably the pandemic—accelerated plans for organizations across the board over the last few years. As it is such a critical part of so many businesses’ strategies, it is unsurprising that their main reasons can be boiled down to three main points:

· To enable the business to work faster

· To replace analogue with digital

· To modernize infrastructure

However, while this acceleration has helped businesses in every vertical to reach their goals ahead of schedule, one thing they all agree on is that, in comparison to the last 18 months, digital transformation is only going to speed up. And data center leaders need to find a way to avoid continually playing catch up.

Alignment in the IT Industry

The proliferation of apps, as well as compute-intensive features such as machine learning (ML) and big data workloads, has led to cascading pressures for data center professionals. All of which are complicated by many of their customers switching to hybrid working processes.

Combined, this compounds the risks in data centers because of the necessary speed and scale of change required to accommodate them. Despite this, 81% of the IT professionals we asked in our research state that their digital transformation is a help to their business. However, the flipside of this is that 20% of our technical respondents see digital transformation as a non-strategic replacement of tools—essentially, that their digital transformation has not been properly thought out.

How Will Digital Transformation Affect Your Industry?

Digital transformations will impact every member of staff, though in varying ways. However, most felt that digital transformation created more demand for capacity, particularly those at larger organizations.

Manufacturing has been most affected by this need for increased capacity, with 64% of those surveyed mentioning it as a challenge, followed by Financial Services (62%) and Healthcare (61%). Nevertheless, over two-thirds of Manufacturing companies are solving this problem through increased colocation, making them the most aggressive to facilitate transformation using this method. For many businesses, this increased demand, driven by digital transformation, will result in new data center projects.

Are Technical and Transformation Strategies Aligned?

This need for expanded capacity led us to examine the extent to which transformation leaders are considering it within their planning, and then stress testing whether tech professionals concur. Fortunately, the results were largely positive—with 86% of technical professionals agreeing that digital transformation leadership takes data center capacity into consideration.

This was highest among Education (91%), but even the lowest, Government, had over three-quarters agreement (78%). These figures are encouraging, particularly in the face of the new wave of leadership entering digital, technology and transformation functions in recent years. The expectation was that their wider set of skills might reduce the level of awareness around technology challenges, but it appears this has not been the case.

What Leaders Need for Digital Transformation

Our research has shown that the biggest barrier digital transformation leaders are facing is poor IT infrastructure, often driven by cost.

Outside of this, digital transformation leaders’ priorities are relatively familiar challenges:

1. The ability to scale their tech up and down quickly

2. Collaboration with IT

3. Unlimited data storage and management

The research does, however, also suggest, that collaboration between business strategy and technical teams may be improving through digital transformation.

Minimizing the Environmental Impact

With businesses gradually returning to normality, they are once again in a position to focus on restabilizing their environmental, social and governance (ESG) efforts. This is visible in digital transformation, where 92% of leaders are considering environmental factors as part of their digital strategy and almost as many IT professionals believe this commitment is reflected fairly.

We found that many of the organizations we surveyed linked digital transformation to ESG initiatives. Almost half (45%) said their digital transformation strategy was aimed at reducing the environmental impact of their technology infrastructure. Included within this is a reduction in power consumption, as 43% identified it within their transformation strategy. But to do so, companies must make efficient gains across equipment, as well as put in concerted efforts to improve space utilization.

Transforming Your Future

Digital transformation is a double-edged sword. On the one hand, it presents businesses with numerous opportunities, but on the other, it brings barriers for technical professionals and digital strategists. But while the digital transformation acceleration will cause data centers issues, digital transformation as a whole does seem to be aligning with business strategy and technology. This increases efficiency, helping technical teams to add value through effective facilities management and maximized capacity.

“Digital transformation is prolific in every industry right now, thanks to its power to unlock business growth in a challenging climate,” said Dave King, senior product marketing manager at Cadence. “While the level of change and challenges it unveils may vary across sectors, one thing remains consistent—the need for digital twin technology to manage the pressures that arise when transforming data center facilities. With this technology in place, organizations can effectively manage changing capacity demands and deliver on ESG directives. As such, it’s unsurprising that a growing number of companies are turning to physics-based simulation with data center digital twins to empower decision-making for these transformations”.

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