As leader of the Europe West region for EMC I look after a diverse range of countries.
Yet within that diversity there are remarkable commonalities as technologies disrupt industries in equal measure, and consumer trends force change from providers. One such sector is that of the internet and IT service provider, which is undergoing particular pressures at the moment.
The market for corporate IT service providers has been challenging and fast evolving. The dynamics of Moore’s law and its storage equivalent (which actually shows a faster drop in cost per storage unit over time, as disk densities increase, than CPU/semiconductors see in Moore’s law) has set an expectation that hosted and cloud IT services will continue to get cheaper whilst SPs are forced to continue investing, refreshing and innovating their systems to deliver the latest customer offerings.
The rise of “shadow IT” in enterprises, thanks to the innovations in the consumer sphere from companies like DropBox, Apple, Amazon and Google, is creating a strong demand for enterprise-grade cloud services as businesses seek to ensure good corporate governance and compliance with data regulation laws – not least local data location and security requirements that often restrict the storage of sensitive customer data in US data centres, for example. The shape and nature of these services is being forced to change at a far faster rate than is typically allowed for by SP infrastructure refresh schedules or service development cycles.
The challenge for service providers in Europe is to find a way to enable the agility this sort of service delivery model requires in a scalable way; SPs can’t be forced to recapitalise their infrastructure too frequently, and therefore need to find an operating model that delivers agility without incurring painful costs. I believe there are five major routes to this, and we’ve seen Western European SPs start to pioneer these already, in a way that delivers an excellent total customer experience without spiraling capital investment requirements.
I’ll expand on these in my next post, but interested in your thoughts on the issue as you see it in your market, or across your region.