What will the emergence of the Omicron variant of the coronavirus mean to the data center and cloud computing? In his Data Center Frontier podcast, Rich Miller tackles three areas that are likely to be affected by new restrictions in reaction to the new, fast-spreading variant.
Aside from the obvious implications to travel anew, a significant area of concern is the global supply chain, which the pandemic has severely challenged.
“We’ve all seen the stories about container ships stacked up in major ports and the challenges of moving products around the world to meet the demands for not just data center construction, but also for servers and other components that are key to IT equipment,” Miller says.
“For most data center operators, managing the global supply chain crisis has been a function of leaning hard on their experience and relationships and getting even more obsessed than usual about planning.”
What can be done?
In a recent Data Center Frontier report, 12 different C-suite executives identified a number of strategies for managing the global supply chain crisis.
* Ordering equipment ahead of time.
* Holding more data center equipment inventory in warehouses and other locations where they can be quickly deployed to construction sites.
* Working with more suppliers, including new suppliers who can source hard-to-find products.
* Making spot purchases to meet specific short-term demand on particular items sometimes at premium prices. Supply and demand is certainly affecting the delivery time and pricing on some of these components.
* Doubling down on supplier relationships and wielding the company’s size and financial strength to help make sure that they have the inventory they need to deliver on projects.
* Working ahead on forecasting and procurement for 2022, 2023 and beyond.
The toughest choke point for the supply chain, Miller says, will likely be in the semiconductor shortages, which have affected not just computers and servers, but also cars and kitchen appliances and any number of the many things that rely on chips throughout our global economy.
“If component availability continues to delay the deliveries of chips, servers and network gear, ultimately that will play into the fill rates for data center capacity,” he says.
When a developer delivers a data hall, that doesn’t necessarily mean that all the servers are just going to roll right in immediately. But that’s one area where the availability of chips and the timelines for when people can get new servers will have an impact on how quickly data center equipment is deployed.
Enterprise IT budgets
Another area that might be affected by the Omicron restrictions is enterprise IT spending.
“If there’s one thing that markets hate it is unpredictability, and the unpredictability of the COVID-19 pandemic has been a major factor in the subdued investment that we’ve seen in its infrastructure by the enterprise sector in 2020,” Miller says.
But two years into the pandemic, there’s significant anecdotal evidence that enterprise spending on data center services has begun to normalize and rebound in 2021. A number of data center developers and service providers in recent months say they’ve seen increased activity, and they expect that to lead to better enterprise sales for the year.
The Omicron variant raises questions about whether this trend will continue into 2022. But even for enterprises that are being careful with their spending because of concerns about COVID-19, there is a clear mandate to be able to engineer their IT operations to handle whatever eventualities may come.
“There’s been a lot of discussion about how the companies that have been the most successful during the pandemic have been the ones that have been able to prepare their IT operations to be flexible, using cloud colocation and on-premises capacity to address whatever needs come up, including the need to rapidly scale up remote work and networks to meet the needs of more video,” Miller says.
Life goes on – and the pandemic unfortunately seems to go on – and companies can’t wait forever to create more nimble infrastructures that can handle their digital transformation.
Amid the continuing uncertainty, one thing is sure, Miller concludes. The demand for data center capacity will continue through 2022, despite the uncertainties brought about by the Omicron variant, the course of the pandemic, or the many other business factors that are driving digital transformation in which data centers are remaking how the world does business.