How do German providers have to position themselves in the future in order to be successful?
When the save-harbor agreement, a law that allowed the storage of personal data of EU citizens in the US until it was overturned by the European Court of Justice, seemed to be the time of German data center providers. Even if the strict data protection in Germany was seen as a valuable bonus, he was only in individual cases actually sales-decisive. Under the terms of the agreement, many companies have chosen data centers that comply with these rules due to strict data protection in Germany. They were therefore able to be sure that their data were stored and processed in accordance with the law. However, the large US data processing companies such as Amazon, Facebook or Google cannot be pushed out of the market. They either entered into a cooperation with local providers or set up their own data center at German locations. As a result, the great plus of the high data protection factor was lost, and the question arises as to which sales arguments German data center operators would have to put into the market today in order to be able to survive on the market.
The IT strategy needs to be adapted
A very important factor in this context is the IT strategy. Previously, the focus was only on costs and stability, which meant that the role of the Chief Information Officer (CIO), i.e. the IT manager, was comparatively clear. Today, however, the CIO and its team are facing a much broader scope and new challenges. They must ensure that the company can (continue to) grow, promote innovation and support agility and speed. Firstly, long-term planning and the need to act flexibly are not compatible. For the IT department, this means combining the traditional, long-term planning and execution of IT projects with the modern, flexible approach. Both concepts can be connected via the Bimodal IT model. The company, in turn, should consider how best to implement this approach.
Static thinking or flexible action?
Traditionally, it is hardly possible to develop a suitable procedure to recreate the static patterns of the past. Such a planning can only take place if the consequences are foreseeable. Nowadays, however, these consequences are no longer foreseeable due to the rapid technical changes and adaptations. The functioning of the employees is also influenced – while in the past the actions of individual persons were sufficient to carry out a task, teamwork is becoming increasingly important due to the high degree of networking. Even the business processes themselves no longer follow clear rules and strategies, they can only be well managed if they are made more flexible. A complete adaptation to rapidly changing conditions is only possible if the technical, organizational and personnel influencing factors are considered holistically. In the critical areas of the business, the focus will also be on fail-protection and cost-efficiency, now supplemented by a rapid development and marketing cycle of products.
The future lies in the hybrid cloud
It quickly becomes clear that the boundaries are blurred. On-Premise, the complete outsourcing into the colocation of the data center provider, a solution for the development of a private cloud or the all-in offered by Hyperscalers, misses the goal. Regardless of industry and size, companies will rely on the service portfolio of a full IT service provider offering hybrid cloud platforms. These ecosystems enable the simultaneous use of colocation as well as public and private cloud resources over a single data pool, i.e. the central storage. This build-up of the hybrid cloud does not require data to be moved, only the computer and RAM resources come from one of these three instances. This makes it possible to procure precisely the IT services that are needed at the time – flexibly scaled according to quantity, quality and time. By offering these full-service providers, the CIO becomes an IT service broker, which enables him to meet the needs of the departments for the first time.
Not every location fits
In this context, the location of the data center or full-service provider must be considered. For more than ten years, Frankfurt has been the leading data center in Germany. In addition to the Internet exchange nodes are the “big 5” of the colocation providers. Due to its high performance and low latency in data processing, the location will remain unrivaled for a long time to come. Even if the trend is towards a hybrid cloud, this is not a good thing for providers of data centers that are not from the Frankfurt area. This in turn will benefit the IT full-service provider, which can have similar latency values using dark-fiber connections as the data centers in the Rhine-Main area, but lies about 30 km in the city’s banns. The reason for this is the regulations of BaFin, Basel III and the Luxembourg regulation, which stipulate that highly-digitized financial firms must have second-tier locations at least thirty kilometers from the headquarters. A data center location like Darmstadt is placed in a different earth zone than Frankfurt and has a roundtrip time for the data transport of only 0.4 milliseconds.
Certifications as a sign of quality
In the end, it is always important for IT service providers to ensure common standards. The gold standard for the IT service sector is ISO 27001. Especially for companies that have to comply with the legal requirements of the IT Security Law as they are to be assigned to a critical infrastructure (CRITIS), an IT partner should be looking for it in its entirety Certified. This means that it is not just certification for the data centers but ISO 27001 on all offered services. Currently, it is hard for KRITIS to recognize the right options. In the near future, the General Data Protection Regulation (GDPR) will enter into force. Here too, certifications are a sign of quality and ensure legal action. Working with Full IT service providers with a hybrid cloud platform, the right location, and the right certificates is a step towards more security and quality. The future of information technology lies in networked action, which makes the use of combinable and modular solutions in IT operation increasingly important.