Digital Realty: Delivering Stability Amidst Digital Disruption

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Digital Realty: Delivering Stability Amidst Digital Disruption

By Erik Linask, Group Editorial Director  |  August 11, 2016

In today’s age of digital disruption, where organizations need to adapt to rapidly changing business and customer needs, the demand for high-performance services and more bandwidth that is needed to access increasingly powerful applications continues to skyrocket. As a result, cloud adoption – more specifically, hybrid cloud adoption – is building momentum.

According to RightScale’s 2016 State of the Cloud Report, 89 percent of organizations are using public cloud services (a slight increase of 1 percent from last year); 77 percent are using private cloud (up from 63 percent); and 71 percent have adopted a hybrid model (up from 58 percent). All in all, 95 percent of businesses are using some form of cloud today, with the average utilization being three private and three public clouds.

What this means is there is a considerable need for expertise in connecting multiple cloud resources with local data center assets, securely and efficiently. Discussing the trends in cloud computing and a data-driven economy, TMC (News - Alert) CEO Rich Tehrani spoke with Digital Realty CTO Chris Sharp about how the company is leveraging the growth in cloud utilization along with an ever-growing thirst for data.

What’s the vision for the company?

Big data is today’s greatest business asset, but at the same time, it’s today’s biggest IT headache. Just collecting and storing big data doesn’t drive revenue. In fact, as more data is stored, enterprises are finding it increasingly difficult to extract meaning from it. At Digital Realty, we are helping enterprises grapple with the logistics of moving massive amounts of data to and from the cloud, which numerous analyst firms have pointed out, can feel like a forced march around multiple stumbling blocks. Financial services companies, healthcare systems, high volume online retailers, video rendering services, among others all share the pressing need for speed — not just in getting vast amounts of data to cloud applications, but also in extracting insights from it to drive time-critical business decisions or meeting consumers’ real-time performance expectations.

Cloud strategies enable companies to gain control over the data, as well as utilize the flexibility and elasticity of the public cloud to move quickly, especially as speed and performance are increasingly becoming differentiators. Being able to efficiently access, analyze, and exchange data quickly is a big win for companies who are dealing with exabytes of data. As more and more companies become data companies, the amount and the diversity of data sets will necessitate hybrid cloud strategies for SaaS (News - Alert) companies to operate successfully and execute on action. Because we are becoming a more data-enriched environment, the amount of data is astronomical. You have to have space and the ability to land and expand the environment.

Our vision is to build a network of connected campuses and gateways that become the heart of the internet, powering growth and prosperity for our customers. The company is uniquely positioned to provide a complete range of data center and colocation solutions on a global scale that fit customer needs. Digital Realty’s strategy provides a unique opportunity to deliver an open environment that gives customers their choice of service providers, levels of redundancy, power configurations and connectivity options that align to their ever-changing business requirements, now and in the unpredictable future. Digital Realty is removing limits for global businesses by combining unparalleled service delivery, network-dense interconnection, real estate acumen and financial strength.

Simply put, Digital Realty provides our customers the trusted foundation for the digital world.

Tell me about your blend of organic versus M&A growth.

The cloud hosting industry is going through symbolic changes with spikes in M&A activity.  The growth in data center capacity is being driven by increasing demand and appetite for public and private clouds. Digital Realty’s recent acquisitions solidify customers’ appetites for solutions that enable them to further grow their businesses.

What’s been the driving force of your acquisitions?

Digital Realty acquired Telx in 2015 to expand its retail colocation and interconnection business. The acquisition advances the company’s objective of ensuring that Digital Realty's suite of products and services is able to best serve its customers' current and future data center needs.

The driving force behind the acquisition is to develop a world-class ecosystem of global solutions providers that help companies implement and manage their connected ecosystems. Digital Realty is well positioned with its network of flexible, globally scalable, and connectivity-rich service providers that enables customers to expand their portfolios of service offerings and help apply technology in new and innovative ways that help drive their businesses.

Can your footprint really allow customers to emulate large cloud vendor networks?

The cloud is more earthbound than the term might suggest. Physical connections, infrastructure and networks make up the very foundation for everything we access and communicate via the cloud.

Digital Realty provides the foundation for that physical infrastructure. We facilitate direct, secure connections between cloud providers and businesses within and between our data centers. We provide a growing ecosystem of premium cloud solutions from a strategic and diverse set of cloud service provider partners, and we enable enterprises to acquire these services through virtual and physical connectivity across multiple cloud service provider options.

With public cloud models constantly evolving to higher levels of availability, performance and security, they are becoming go-to environments for an ever-growing number of apps. The increase in maturity, use and financial advantages of public cloud platforms shows their value as reliable deployment options for enterprise apps and systems.

The Digital Realty ecosystem makes it easy for businesses to choose from a variety of cloud options that include both cloud services and cloud interconnections to address their growing IT needs.

How are you differentiating?

Businesses operate based on connections. They need to connect with the right people at the right time and have instant access to important data and resources, as well as mission-critical applications and services. More and more companies require a mix of dedicated physical data centers, private cloud deployments and public cloud deployments. The varying demand in scale is further adding to the divide – moving back and forth from cabs to megawatts. However, the relationship between them is not always the easiest to maintain. For large tech companies, like Dropbox (News - Alert) and Netflix, implementing elastic hybrid clouds has been extremely complicated and takes enormous engineering prowess to achieve. For the traditional enterprise, the barriers have been too high (i.e., performance, security, costs). While cloud promises agility, without strong technical partners and a strong foundation, more than 90 percent of attempted deployments will likely fail.

Digital Realty differentiates from competitors by building connected data center campuses that allow customers to quickly and securely exchange information between all necessary parties, whether inside or outside the data center facility. Through this model, Digital Realty enables customers and partners to scale, whether that is adding more bandwidth for a fixed amount of time, or facilitating interconnection with collocated cloud providers and network carriers in real time. We encourage our ecosystem to scale to better adhere to their business needs.

Additionally, the data center campuses provide highly reliable power and cooling solutions, physical security and an ecosystem of carrier and cloud partners.

Digital Realty’s colocation product is designed for workloads requiring the greatest number of interconnection options found at peering exchanges. Supporting the Open-IX initiative, which challenges data center providers looking to generate revenue from peering ports, Digital Realty strongly believes cross connects shouldn’t be viewed as interconnection inhibitors.

Additionally, Digital Realty’s colocation product directly links customers to internet/cloud gateways via Digital Realty’s metro fiber networks. The managed fiber network also enables direct connections to more than 50 cloud providers, including Amazon Web Services (AWS), Microsoft Azure and IBM (News - Alert) SoftLayer. Customers can directly access major cloud providers through latency-optimized dedicated routes, even if the cloud provider isn’t located in one of Digital Realty’s data center facilities. As one of the largest builders of data centers on the planet, Digital Realty works to ensure its customers have the capacity to scale their businesses and deploy more mission-critical infrastructure when and where it’s needed.

What about international capability, especially as it relates to data retention laws in various jurisdictions?

We have just opened our latest data center in Singapore, which is quickly becoming a growing APAC network hub. Our new Singapore data center is designed to accommodate a wide range of customer deployments, from cloud service providers to financial services customers, and has been engineered to meet the applicable technology risk management guidelines of the Monetary Authority of Singapore.

Digital Realty also has a large presence in EMEA. The multiple opinions inside the European Commission is an example of the huge political complexity of issues like data sovereignty. Cloud deployments currently do not understand or respect the boundaries of nation states. So, even if regions including Europe could agree, that is just the tip of the iceberg.

As regulators throughout the world struggle with this issue, they will need to realize that hybrid cloud environments will only continue to become more complex, regional divides will only continue to blur, and that multinational agreements are necessary. In the meantime, smart cloud providers will route around the problem as good technology always does. Keep a lookout for providers to deploy locally until the regulators can come to a global agreement.

Tell me about compliance issues as they relate to your offerings?

Data sovereignty remains top of mind for governments and corporations throughout the world. Cloud providers continue to struggle with the mismatch between their business models and architectures, and the desires of citizens and governments to protect their data.

This controversy impacts these topics considerably and should act as an accelerator for multilateral conversations that need to occur to make plain the complicated tapestry of the intersection of the cloud and how it lands. In the middle of the vagueness around the topic, there are cloud architectures that make more sense than others, and we should expect to see designs that take into account data sovereignty issues to be able to benefit from in-country infrastructure deployments. Without certainty on the complicated issue of sovereignty and residency, these progressive architectures will be differentiators.

What other differentiators does your company offer?

 As the Internet of Things localizes data streams down to the smallest wearable device, many organizations are growing increasingly concerned with latency and the emerging need to maintain data centers within physical proximity of their customers. Digital Realty offers latency as low as 1.5 milliseconds — one of the lowest latencies for a hybrid cloud solution in the industry. This is essential for many businesses, like financial services organizations, as they continue to look for secure, hybrid cloud solutions. Financial institutions rely on more data communication than ever, as exchanges move deeper and deeper into the digital world. The fully digital trading system allows market participants to trade from booths at exchanges or while sitting at homes or offices thousands of miles away. These customers need to connect to the cloud and their critical partners on a dynamic platform to be successful on a daily basis, given the high degree of accuracy and results required. Digital Realty helps connect, expand and create new business relationships within its global data center network.

What is the future for your company and the industry as a whole?

Data centers will remain the backbone of today’s digital economy. Organizations are looking for vendors who can host the information that is empowering their business. Today’s data centers have evolved into connectivity-rich service providers, allowing customers to deploy quicker, scale globally, easily access managed services in a reliable way and easily connect to cloud providers.

There is a growing recognition among business and IT leaders that incorporating cloud strategies is critical to business success. Not surprisingly, businesses seek to put the right IT workloads in the right place at the right value. As the world becomes more connected, there will be an increasing need for data center providers like Digital Realty to house global ecosystems.

Edited by Alicia Young
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