Data centre strategies for telcos: how to capitalise on the opportunity

0 Summary

0.1 Various players are approaching the data centre opportunity from different angles

0.2 Related trends are driving industry transformation for all players

0.3 Telcos are well placed to benefit from new possibilities

1 The current data centre boom is not a repeat of the 1990s bubble

1.1 Enormous volumes of digital content are being created

1.2 Modern data centres must conform to strict criteria

1.3 Outsourcing of data storage and SaaS is adding to demand for data centre capacity

2 The drive towards greater efficiency has led to new trends in the data centre market

2.1 Retail co-location and managed services in the UK will experience healthy growth up to 2012

2.2 Some major trends have affected the data centre industry in recent years

2.3 High-density computing is a double-edged sword

2.4 Virtualisation is gaining ground

2.5 Adoption of green IT is growing

2.6 Cloud hosting challenges traditional business models

3 Telcos need to assess how best to enter the data centre market

3.1 Telcos have to find the right niche in a world of co-opetition

3.2 Telcos’ basic point of entry into the data centre market is in provision of network connectivity

3.3 Core data centre services are a low-margin business

3.4 Telcos can get some revenue uplift from basic hosting

3.5 Telcos need to capitalise upon their attributes to improve their positions in the

co-location market

3.6 Managed services are an ideal opportunity for telcos

3.7 Telcos should extend their portfolios beyond traditional data centre services

3.8 SaaS represents an opportunity for telcos

iv Data centre strategies for telcos: how to capitalise on the opportunity

Contents © Analysys Mason Limited

3.9 Nonetheless, telcos must avoid overstretching themselves

Actions

Annex A: Players in the data centre market

A.1 Profiles of pure-play data centre operators

A.2 Profiles of systems integrators that operate data centres

A.3 Profiles of telcos and ISPs that operate data centres

Key to acronyms

Research from Analysys Mason

Consulting from Analysys Mason

List of Figures and Tables

Figure 0.1: Telcos’ opportunities in the data centre value chain

Figure 1.1: Consumer Internet traffic growth, 2006-2012

Figure 1.2: TIA data centre classification

Figure 2.1: Data centre services, complexity versus hardware ownership

Figure 2.2: Managed services continuum

Figure 2.3: Revenue from retail co-location and managed services in the UK, 2007-2012

Table 2.1: Comparison of power consumption by servers

Figure 2.4: Sources of power leakages in data centres

Table 3.1: Details of selected Web-hosting services at November 2008

Table 3.2: Example of potential revenue streams from BT’s Web hosting and complementary services

Figure 3.1: Retail co-location revenue in the UK by type of player, 2007-2012

Figure 3.2: Retail managed services revenue in the UK by type of player, 2007-2012

Figure 3.3: Telcos’ opportunities in the data centre value chain