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The challenging future of the data center in an IoT landscape

“Whosoever desires constant success must change his conduct with the times.” This phrase of Machiavelli’s perfectly aligns with how we should consider the Internet of Things (IoT) – the need to change our mindset regarding the IT industry and how we use data. Better analytics are now creating an amount of information which has never been obtained before; providing important insights into markets and consumers. The IoT can further enhance the business value extrapolated from data, and we find ourselves in the early phase of development of this new technology that will shape our vision of the world. 

Now, imagine a company that distributes millions of sensors along its production chain in several factories, all sending data about machinery to a central location. On one hand, managers will have access to a large amount of data which can effectively contribute to help correct inefficiencies, and to create business value. McKinsey estimate that if policy makers and businesses get it right, linking the physical and digital worlds could generate up to $11.1 trillion a year in economic value by 2025. On the other hand, the data center involved would probably very quickly reach its processing capacity, as it would be overloaded with data and connections that are being pushed from the sensors. According to Gartner, it would not be technically and economically feasible to maintain every computing activity in a central location with the IoT.

The impact of the IoT

The IoT will have a huge influence on companies’ data center strategies, and the best option is likely to be creating a distributed data center infrastructure, installing smaller facilities close to the devices for local processing, with further aggregation in a central location. This creates a more flexible management system which can be adapted to changing requirements. The old logic of using a centralized data center to reduce costs and increase security is simply not compatible in the IoT era. However, any strategy is dependent on the smartness of the devices being used to filter data and avoid overloading the entire system to prevent inefficiencies.

The adoption of the IoT will likely lead to a profound reassessment of data management strategies within businesses, and aspects such as costs and the integration of new technology are hot topics for managers today. The IoT represents a great opportunity for creating smarter companies that are more responsive to market needs. It enhances capabilities that, decades ago, managers could barely imagine: real time analytics that allow for preemptive intervention to avoid potential errors.

Therefore, implementing IoT solutions is important to be able to create a tailored data management strategy, re-considering the role of the data center for a business. The IoT will likely speed up the transitional process to cloud-oriented infrastructure; companies in different sectors are already gradually running a larger part of their processes on hybrid cloud solutions. The cloud is an enabler of digital transformation which can enhance the potential of the entire infrastructure, and support in delivering better services.

A future for the traditional data center?

The advancement of IoT and cloud computing may lead to the reduction in the use of data centers by businesses, simply due to the potential level of scalability and flexibility that companies may need to attain. Clearly, security cannot be underestimated and companies need to maintain a robust infrastructure around their data. It is likely that data centers will gradually lose strategic importance for most businesses, however physical locations will still be needed as safe stations of reference in case of system failures.

IT managers need to begin thinking about the best approach to optimize and innovate their infrastructure, ensuring it doesn’t become quickly outdated in a fast moving environment, enabled by the IoT.

About Paul Albada Jelgersma

Paul has over 24 years of experience in running IT and business programs; including managing large teams of IT and other professionals. Paul is a founding member of the Atos Scientific Community. In his day job, he focusses on the strategic partnership between Siemens and Atos, managing the overall innovation process. Paul likes to work with Virtual Teams in the new way of work. He dislikes email as a chat and document-management tool. He occasionally writes articles and publishes at his own blog. Paul is married and has 2 children. He lives near Amsterdam, The Netherlands. He likes to travel. In 2013 he visited Peru, Ecuador and the Galapagos Islands. Many more locations are on his bucket-list.