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Structure Research: Data Centre Supply Research is Broken; Legacy Research Firms Miss the Mark but There is a New Way

  • December 30, 2015

Source: LinkedIn

Legacy research firms continue to completely mishandle data centre colocation supply studies. The methodologies are incomplete and cursory and result in questionable data. This translates directly to inaccurate analysis and portrayal of a given market. This research should not be used to make or validate critical business decisions. Where do legacy firms come up short? How can this be addressed? The answers are below:

Space and power: Supply side studies are incomplete when focused solely on space as the unit of measure. Focusing on space only addresses half the story and is by definition incomplete. Truly valuable data centre supply studies need to address power – the truest unit of capacity and cost in the data centre. Everything in the data centre is driven off the cost and availability of power. To ignore power is to not just throw a dart against a dartboard aimlessly, but to miss it altogether.

Structure Research’s answer: Our data centre supply studies measure capacity and utilization rates from BOTH a space and power perspective. And as you might expect, this results in very different utilization rates that must both be considered when conducting a proper market assessment and analysis.

Sub-regional breakdowns: Many data centre markets – particularly those in the top tier – tend to have ‘market within a market’ dynamics. Most research firms recognize this. But it is basically useless to draw a map and show where the clusters are gathered. That is nice aesthetics but meaningless from an analytical perspective. Proper sub-regional analysis will not just break out a market’s clusters or sub-regional markets. They will actually measure them. And they should do this from both a space and power perspective. Anything less has no analytical depth.

Structure Research’s answer: Very simple. Break a market down into the sub-regional markets and measure it. Provide the size, capacity and utilization rate of sub-regional markets (within a market) from BOTH a space and power perspective. We do this.

Measurement accuracy: Even measuring space has nuance. A ‘net sqft’ or ‘usable sqft’ metric is open to interpretation. Does ‘space’ also count equipment that supports the operation of the data centre but does not contribute directly to revenue generation? A less than rigorous approach to measuring space leads to imprecise metrics. And this makes for weak data. Providers tend to pump up their numbers when speaking to legacy research firms. They need to be asked questions that are defined strictly and enables production of data that is accurate and most of all, actionable.

Structure Research’s answer: Our measurement of space is granular and nuanced. We differentiate between ‘rackable’ and ‘net sqft’, and measure it, to provide a more accurate picture of actual revenue-generating capacity and utilization. This is not throwing darts at a dartboard. This is about gathering and providing precise data and analysis.

Time in the region and on the ground: Aside from good data and metrics, data centre supply studies should offer some detailed perspective on market dynamics. To get that kind of depth, research firms need to spend time in the local market to get a true grasp of what is going on. This is a particularly big issue when, for example, US-based firms send US-based analysts to do studies in markets like Singapore and Hong Kong – where they have never visited and have little to no knowledge of the local market. Doing studies in this way leads to questionable insight and data … at best.

Structure Research’s answer: Our data centre supply studies are focused on select markets where we have spent considerable time on the ground. We are not ‘passing through’ any market we study (let alone just once). This leads to better analysis and truly grounded insight into market dynamics – in the markets we take on. Our reports on Singapore and Hong Kong are a clear demonstration of this. We are locally incorporated (in Singapore) and have spent the requisite time on the ground to get a true understanding of the market.

Structure Research Data Centre Supply Methodology

Structure Research has developed a proprietary methodology for data centre supply research. Please inquire: [email protected] or read about it here: http://www.prweb.com/releases/2015/09/prweb12954861.htm

You can also download an executive summary of our Singapore Data Centre Supply Report here: http://structureresea.wpengine.com/product/singapore-data-centre-supply-report/

About Structure Research 

Structure Research is an independent research and consulting firm with a specific focus on the hosting and cloud segments within the Internet infrastructure market. We are devoted to understanding, tracking and projecting the future of hosting and cloud infrastructure service providers.

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