How independent data center operators are aligning to better meet market demands
We walk among giants. It’s a refrain you could hear from almost any independent data center operator these days. According to Cisco’s Global Cloud Index Forecast and Methodology White Paper, “Traffic within hyperscale data centers will quadruple by 2021. Hyperscale data centers already account for 39 percent of total traffic within all data centers and will account for 55 percent by 2021.” While this market domination may not be as extreme as the Standard Oil monopoly broken up by the Sherman Antitrust Act of 1890, it bears examining. Though several hyperscalers dominate the market instead of one large company, the drawbacks for independent operators are just as serious. “Share of voice in any market is challenging. When you don’t have the resources or budget to vie for space in the market, you challenged to be discovered,” says Ilissa Miller, industry veteran, co-founder of the Independent Data Center Alliance, President of NEDAS and CEO of iMiller Public Relations, a global public relations and marketing firm focused on the communications infrastructure sector.
The hyperscalers’ mammoth marketing budget and large staff provide resources that allow them to flood the market with their messaging. This recurring communication with consumers inevitably builds brand awareness and, as a byproduct, trust. For this reason, it’s understandable that even the most reputable independent data center operators have to combat the fact that consumers see the titans in the market as the safest choice.
It’s essential to have a strong message, but strong connections are just as vital. Tom Brown, President and CEO of DataGryd, located in the iconic 60 Hudson Street facility, shares how his company is proactively dealing with the drawbacks of a market dominated by giant providers: “We are combatting this challenge by partnering with cloud providers, managed service providers, and equipment providers. This allows us to broaden our message.” In fact, DataGryd is taking partnerships to a whole new level: Brown and Miller recently formed the Independent Data Center Alliance (IND-DCA), a consortium of independent data center and carrier hotel operators engaged in joint go-to-market initiatives that include commercial agreements to co-market and co-promote their individual facilities as a collective. The alliance, which includes knows how to leverage the power of the collective to unlock opportunities for a fair share of voice in the marketplace. With a unified approach, they effectively help customers understand that choosing a smaller operator doesn’t mean compromising safety or other important requirements such as compliance.
Though the IND-DCA member companies share a unified purpose, they are intentionally geographically unique and can highlight their company’s individual properties within the alliance’s messaging. For example, IND-DCA Founding Member Michael Morey, President and CEO of the Bluebird Network and the Bluebird Underground Data Center, points to his company’s location in Springfield, Missouri, as a strategic advantage. He reports, “Bluebird focuses on edge customers within a 150-mile radius of our data center so that we are filling our data center with customers for whom our location is their primary consideration, rather than going head to head for the hyperscale business.”
The IND-DCA community opens up avenues like this for more partnering or referral opportunities. “The differentiators with the IND-DCA are the key relationships you have with those companies, the unique locations, and the details of the types of services and capabilities,” Miller says.
Morey notes that another major drawback of being an independent operator in the current marketplace is the decreased ability to get consideration from the hyperscale buyers. However, amplified messaging provided through the IND-DCA gives each smaller operator maximum visibility. Miller sums up what all this means for member companies: “I envision the IND-DCA to be a go-to for buyers, investors, and other major data center operators that are looking to partner or need secondary or tertiary sites in new markets. It should become a marketplace for anyone interested in the data center space to look at who the emerging players are from a variety of perspectives.”
Those are just some of the goals Miller and Brown (who, when combined, possess more than 40 years’ experience in this industry) considered when launching the organization at ITW in 2019. Other goals being realized include providing practical resources and research that is usually proprietary. Members obtain access to a gated online portal that includes services ranging from locating an expert speaker for industry events to accessing information, such as research, tech lists and market data, that historically could only be obtained by individuals at large corporations.
Competing with today’s giant data centers is possible if company leaders are willing to think differently and explore collaboration. In some regards, the strategy these leaders are employing through the IND-DCA is a lot like the one used in Moneyball, a film about the art of winning an unfair game. Rather than playing by the old market rules set by the giant providers, these companies are creating new rules. Together, they are sharing data and employing specific, measurable marketing strategies to bring the same marketing volume and talent to the field as the most recognizable “first-round draft picks.” To learn more about the IND-DCA’s efforts or join the alliance, visit www.ind-dca.org.
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