As the balance of power is slowly shifting to emerging markets, countries like India, China, and Brazil may experience more sustainable growth in the coming years than the United States of America may. While the US economy witnessed growth largely fueled by the technology bubble, credit bubble and debt accumulating up to $13 trillion, emerging markets have been steadily climbing and their GDP data presents some hard evidence. India more than doubled its GDP in the last five years and China and Brazil are also experiencing rapid growth.
The chart at the following link indicates that GDP in the United States is largely fueled by debt for the last two decades: http://market-ticker.denninger.net/uploads/Dec2009/Absolute-Debt-GDP-9-09.png
The table at the following link represents the GDP in the growing economies courtesy of Trading Economics: http://www.tradingeconomics.com/
A comparison derived by a Google chart compares GDP growth in Indian, China, Brazil, and the United States. Which I find very interesting. View the comparison chart here .
All economic indicators despite global economic meltdown point to a greater need for IT enabled services in the emerging markets. Catering to this huge demand is virtually impossible if the service providers continue to focus on the traditional growth markets and downplay the emerging markets. This economic and technical growth yields a large opportunity for the data center service providers to benefit from development overseas.
A Structural Change Is Underway
As remarkable as the GDP numbers sound, the data center service providers will have to build more internal architecture and complex business models to cope with the growth. Until now, a data center service provider’s primary task has been ensuring uninterrupted power and connectivity, secured web space, and disaster protection. Moving forward, Data Centers will be faced with space and power issues in already over populated areas. A major shift to server virtualization will help the service providers keep their cost and power consumption in control. Perhaps a hybrid model with virtualization mixed with traditional models could present the best solution. The service providers may have to maintain much smaller facilities across the globe rather than funneling all of their traffic through a few larger data centers.
The forecasted trend of more and more scattered, smaller data centers will materialize over time with Managed Services requiring a high level of customization. Service providers can easily leverage their infrastructure with the intellect in the growing economies to provide scalable and inexpensive solutions. This will result in bolstering security without any increase in operational costs. These new trends are likely to become more evident as more facilities are procured and built. Service providers can capitalize on this trend to ensuring their business models are in sync to take advantage of the booming growth.
The Opportunities Ahead
Rapid expansion in the growth markets calls for a reliable yet cost effective data center service providers that can meet the requirements efficaciously. Some experts forecast the data center market will expand 45% in 2010, adding an additional 80% of total revenue to the data center service providers in these regions. Recently conducted surveys suggest that the data center market in India, China and Brazil is going to nearly double by the end of 2010. This has encouraged some data center operators to increase their capacity and upgrade their resources. Significant cost savings from staffing in countries like India has also enabled the service providers to manage a good balance between growth and return on investment.
As the data center services demand in India, China and Brazil surges, it calls for service providers to align their goals with the market trends. Service providers may need to create flexible business models and upgrade their infrastructure to better cope with the growth.
Continued innovation and exploring new opportunities beyond geographic boundaries is the name of the game in the new global economy.
Atlantic.Net is always open to exploring new opportunities to mold our business models with the changing times. We love to explore growth opportunities to help us stay ahead of the curve and surpass the competition.