Data Center Operator
When the digitalization of business processes began, back in the 70s and 80s, companies that could afford to take this leap (large banks, telecommunications operators, governments ...) implanted gigantic machines in their own corporate headquarters or in ships enabled for such use. Some of these systems, such as the historic IBM mainframe, are still operating in many of these companies.
Gradually, these systems were reducing their size and complexity, so it was possible to deploy many machines and connect them in the same center to centralize all the digital activity of the company and provide many more services to subsidiaries or territorial delegations. Thus the concept of data center arises, where the data and critical applications of each entity are housed.
This premise has remained stable until today, as more and better servers were deployed to respond to the growing digital strategies of companies. And, with the takeoff of Big Data and the presumed explosion of information that organizations were going to have to process, many of them made huge investments in state-of-the-art data centers.
We talk about very expensive facilities, with investment amounts higher than tens and even hundreds of millions of euros. And, it is not only the price of the computer equipment itself, but also the associated connectivity networks, the relationship with the power supply (and backup systems or batteries) and the deployment of the cooling systems that must be counted. they allow the data processing center (CPD) to be operational in itself. To this, we must add in many cases the costs of the land and the actual construction of the building. It's not turkey mucus, precisely.
The companies that took this step were boasted by analysts, investors and the press. They were facing the great digital wave strongly and had their infrastructures ready to respond better than their rivals to the technological challenges of Big Data or the emergence of artificial intelligence and large-scale information analysis.
But it was only a mirage, or at least a reality that had a name and expiration date. Because what the CIOs who designed these data center deployments did not have is that, in the late 2000s, a market trend was going to emerge that would render all these previous efforts useless: cloud computing.
The impact of the cloud
The premise is really simple: large digital service providers (such as Amazon, Alibaba, Google or Microsoft ) need to deploy large physical infrastructure to support their own applications. But since they all experience load peaks, they tend to overweight their CPD needs. In this way, they usually have an excess of capacity - both processing and storage - that they can market to third parties.
From this basic argument a whole market arises in which these actors take advantage of their economy of scale, operational experience and geographical dispersion to offer all layers of business computing (infrastructure, platform and applications) as a service. In this way, the final company only has to pay a monthly fee and give a couple of clicks to access the capabilities that once required years of data center design and millions of euros in investment.
Cloud computing eliminates the barriers to entry that restricted digital advances to large IBEX firms but, more importantly, imposed a new financial criterion in the ICT strategy: while the construction of its own CPD directly impacted the account of companies' results, the payment of a fee to an external supplier is accounted for as an ordinary expense.
Read more: Why Madrid could become the European capital of data centers
In other words: from one second to another, the millions of euros invested that seemed to give advantage to the pioneers in the digital transformation became their biggest slab, compared to the agility and better financial margin of those who entered directly to compete in the 'cloud era'.
The data is eloquent: the cloud market will move in 2019 no less than 1,107 million euros in Spain, 20% more than last year, according to IDC, and that trend will continue during the next five years, at a compound annual rate of 22.5%. And what is more relevant if possible: 50% of companies will choose the public cloud as their default deployment model in 2023 because of its lower risk and complexity. Meanwhile, traditional deployments (that is, in their own data centers) will go from the current 68% of the total to 61% in 2022.
Gradually, these systems were reducing their size and complexity, so it was possible to deploy many machines and connect them in the same center to centralize all the digital activity of the company and provide many more services to subsidiaries or territorial delegations. Thus the concept of data center arises, where the data and critical applications of each entity are housed.
This premise has remained stable until today, as more and better servers were deployed to respond to the growing digital strategies of companies. And, with the takeoff of Big Data and the presumed explosion of information that organizations were going to have to process, many of them made huge investments in state-of-the-art data centers.
We talk about very expensive facilities, with investment amounts higher than tens and even hundreds of millions of euros. And, it is not only the price of the computer equipment itself, but also the associated connectivity networks, the relationship with the power supply (and backup systems or batteries) and the deployment of the cooling systems that must be counted. they allow the data processing center (CPD) to be operational in itself. To this, we must add in many cases the costs of the land and the actual construction of the building. It's not turkey mucus, precisely.
The companies that took this step were boasted by analysts, investors and the press. They were facing the great digital wave strongly and had their infrastructures ready to respond better than their rivals to the technological challenges of Big Data or the emergence of artificial intelligence and large-scale information analysis.
But it was only a mirage, or at least a reality that had a name and expiration date. Because what the CIOs who designed these data center deployments did not have is that, in the late 2000s, a market trend was going to emerge that would render all these previous efforts useless: cloud computing.
The impact of the cloud
The premise is really simple: large digital service providers (such as Amazon, Alibaba, Google or Microsoft ) need to deploy large physical infrastructure to support their own applications. But since they all experience load peaks, they tend to overweight their CPD needs. In this way, they usually have an excess of capacity - both processing and storage - that they can market to third parties.
From this basic argument a whole market arises in which these actors take advantage of their economy of scale, operational experience and geographical dispersion to offer all layers of business computing (infrastructure, platform and applications) as a service. In this way, the final company only has to pay a monthly fee and give a couple of clicks to access the capabilities that once required years of data center design and millions of euros in investment.
Cloud computing eliminates the barriers to entry that restricted digital advances to large IBEX firms but, more importantly, imposed a new financial criterion in the ICT strategy: while the construction of its own CPD directly impacted the account of companies' results, the payment of a fee to an external supplier is accounted for as an ordinary expense.
Read more: Why Madrid could become the European capital of data centers
In other words: from one second to another, the millions of euros invested that seemed to give advantage to the pioneers in the digital transformation became their biggest slab, compared to the agility and better financial margin of those who entered directly to compete in the 'cloud era'.
The data is eloquent: the cloud market will move in 2019 no less than 1,107 million euros in Spain, 20% more than last year, according to IDC, and that trend will continue during the next five years, at a compound annual rate of 22.5%. And what is more relevant if possible: 50% of companies will choose the public cloud as their default deployment model in 2023 because of its lower risk and complexity. Meanwhile, traditional deployments (that is, in their own data centers) will go from the current 68% of the total to 61% in 2022.
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