Appetite for enterprise datacentre expansions dampens in face of Covid-19, research shows

The Covid-19 coronavirus pandemic has led to marked dampening in appetite from enterprises when it comes to investing in expanding their in-house datacentres, research suggests.

According to the summer edition of the European datacentre survey report, which is based on the responses of 3,000 senior datacentre owners, operators, developers and end-users from across the continent, interest in expanding in-house datacentres has fallen through the floor in recent months.   

“One of the most dramatic sentiment changes has been in the predicted expansion of in-house datacentre centre space, with only 21% of respondents expecting an expansion over the coming 12 months,” the report states.

“This is the lower proportion recorded since the inception of the survey over a decade ago and significantly below the long-term average of this measure, which stands just shy of 50%.”

This is the 20th edition of the survey in 12 years conducted on behalf of IT services provider Business Critical Solutions by IT market watcher IX Consulting. It was also compiled during April and May 2020, as many countries across Europe were in the thick of coronavirus-related lockdowns.

This has led to huge shifts in how people work across the globe, with many countries mandating that anyone who could work from home do so, prompting some firms to re-evaluate whether or not a return to office-based working will be financially and productively worthwhile in the post-Covid-19 economy.

BCS CEO Jim Hart said it is too early to say with any conviction what these findings mean, but added that they do indicate that these are questions many enterprises are in the throes of weighing up: “Is this an indicator of cutting floor space and moving to a more flexible model to cope with changing working patterns?”

Meanwhile, the proportion of end-user respondents (42%) looking to expand their infrastructure with the help of external, third-party colocation providers looks set to remain steady over the coming 12 months.

“This provides evidence that the appetite for third-party managed IT real estate solutions could remain relatively buoyant, despite the coming global economic downturn,” said Hart. 

“With reported latency issues and variable download speeds, this sentiment is further underlined by the opportunities of the potential changes to working patterns and how our digital infrastructure is delivered.”

The report also touches on the supply chain issues that some datacentre operators have encountered during the pandemic, when it comes to sourcing IT hardware to kit out their facilities with.

As recently reported by Computer Weekly, such challenges have been easier for some operators to overcome than others, depending on whether or not their sites are designated critical national infrastructure (CNI) or how much spare inventory they have at their disposal.

This is a challenge the report flags as being important for the industry to be able to overcome so that it is ready and able to respond to the changing demand for datacentre capacity Covid-19 is ushering in.

“Difficulties in sourcing materials from domestic suppliers who are in lockdown is problematic in itself, but in a high-value industry where supply chains are increasingly global, there are significant challenges when movement is restricted, or priorities given to movement of essential medical equipment,” said Hart.

“Will this be the new normal or a paradigm shift that sees technology being utilised to its full potential? There are many hurdles to face but opportunity exists. It is down to us to shape the opportunity and grasp it.”