How Supply Chain Delays Specifically Affect Colocation Data Center Owners

COVID-19 blasted digital transformation into warp speed for many organizations. What was a five-year initiative to digitize files or move at least some operations to the cloud became an emergency directive, almost overnight.

Then, the world came to a screeching halt. The web and the cloud became our lifelines, both for social connection and for keeping businesses open and operating, which caused a sudden surge in demand for computing power and data management. To add some perspective, global data center IP traffic is expected to reach 20.6 zettabytes by the end of 2021 (up from 6.8 zettabytes per year in 2016).

This was both a blessing and a curse for colocation data centers. Owners had to figure out fast how to fulfill growing demand for capacity, with only limited and inconsistent access to the components needed for expansion. 

With many ports and factories operating at reduced output, if at all, colocation data center owners had to adjust delivery deadlines and absorb cost increases to account for supply chain delays and availability issues. Even today, data center owners are continuing to adapt to supply chain disruption with no clear end in sight.

How Supply Chain Delays Specifically Affect Colocation Data Center Owners

Supply chain issues don’t affect all colocation data centers equally. There are several factors that play into how much impact delays and product availability have on a particular provider.

For example, size is a major differentiator when it comes to overcoming supply chain challenges. Large colocation and hyperscale data centers have a lot more purchasing power than the smaller facilities, so they often have better access to limited materials than small, regional colocation data centers.

This disparity is especially significant if a potential data center tenant has specific demands or needs a certain amount of infrastructure. Small colocation data centers simply may not have the clout to requisition the required components to reliably meet the client’s infrastructure requirements.

For colocation data center owners that are considering new data center construction, the supply chain outlook is even worse.

Not only are these owners looking at delays and skyrocketing costs from a low inventory of materials, but the construction industry is also facing a massive shortage of skilled labor. Even if you are able to source the components and supplies needed to build a new colocation data center, you might not be able to find anyone to build it—at least not anytime soon.

Strategies to Help Colocation Centers Avoid Supply Chain Delays

At first glance, it may seem like timely colocation data center expansion and construction are doomed for the near future. But in reality, there are multiple things owners can do to circumvent some of the roadblocks, so they can grow their capacity or even build new facilities.

Vendor-managed inventory 

Vendor-managed inventory (VMI) is a supply chain strategy that helps ensure the right components are available when they are needed, without the overhead of stocking and storing them. 

With VMI, the colocation data center owner provides product specs to a supplier that then becomes responsible for maintaining the product inventory. The supplier often stores the materials near the data center so stock can easily be replenished with minimal delay. 

For colocation data centers, VMI helps construction or upgrade projects stay on schedule by minimizing shipping and transport delays, cuts costs because parts are accepted on consignment rather than purchased in advance and stored, and maximizes efficiency because the right parts are available when they are needed.

Pooling resources

Pooling resources is an effective way to stretch availability to limited or hard-to-find components. When colocation data centers centralize inventory instead of allocating it all to one place, those components can be distributed as needed. 

For example, when a data center owner is building multiple colocation facilities in the same region, and if demand for one type of material is higher than average in one location and lower than average in another, that material can be reallocated to the facility in need, rather than purchasing new material.

Vendor-agnostic materials

With supply chains experiencing a historic level of disruption, now is not a good time to have all of your components in one basket. 

When designing or expanding a colocation data center, locking in with a specific vendor severely limits scalability and customization. It also leaves you at the mercy of the vendor’s supply availability. Opting to use vendor-agnostic materials gives you the flexibility to choose components that are compatible and integrate well with the rest of the system. 

When you work with vendors that use standardized technology, rather than proprietary, you can exactly meet your client’s specifications by mixing and matching the best components for the job. 

Vendor-agnostic data center design also makes it easy to respond to tenants’ future growth needs and changing internal business objectives.

Modular data centers

When construction materials, technology components and human resources are tight, modular data centers can alleviate some of the pressure so growth can continue.

Because modular data centers are manufactured in a factory rather than in the field, each build is customizable to take advantage of available best-in-class components, so clients aren’t waiting around for parts to become available. 

Modular data center construction also provides flexibility and scalability, so if your needs change next year, there is no problem. You can easily make room for new tenants when you need to, without the wasted expense of stranded capacity inherent in traditional data center construction.

How PCX Corporation Can Help Your Facility

The demand for data storage and computing power is at an all-time high, making colocation data centers a hot commodity. However, supply chain disruption can make it nearly impossible to meet deadlines and stick to budgets when components are so hard to come by consistently, if you don’t have the right plan in-place.  

Many colocation data center owners are paying a high price for these supply chain delays, but there are ways to mitigate many of these issues. Applying strategies such as vendor-managed inventory, pooled resources, vendor-agnostic materials and modular data center construction can lessen the impact of supply chain disruption so owners can reap the benefits of the data explosion.

Learn more about how you can bypass costly supply chain issues through vendor-agnosticism and the Open Compute Project, by checking out our Guide to Open Collaboration and Vendor Agnosticism in Data Centers.