International carriers are investing in new data centres as cloud services gain traction worldwide. Their data centre footprints are set to become key strategic cornerstones as they move to provide robust cloud offerings supporting more than just virtualisation.
This certainly appears to be the path adopted by NTT Communications, which is seeking to aggressively expand cloud services across Asia and globally. In line with this strategy, the company has recently added a number of data centres to support its new Infrastructure-as-a-Service (IaaS) cloud offering for enterprises.
“The best way to say it for us is that our data centre strategy underpins our cloud strategy,” says Len Padilla, vice president of product strategy at NTT Europe. “To us the cloud is a combination of lots of things, including managed hosting, colocation and managed services. It’s not just a data centre footprint in a faraway land.”
Padilla points out how the new data centres it has opened in Asia are all near major financial centres: “It gives us the best low latency and this is important for financial markets, which we need to be near.” In March, the company launched new data centres in Australia, Malaysia and Thailand, locations where it plans to launch Enterprise Cloud in the second quarter after building and testing.
NTT has already debuted the service in nine locations across eight countries to make it globally available, recently opening data centres in Singapore and Hong Kong and adding ones in the US and the UK. Padilla says NTT may have 50-100% more data centres supporting the service a year from now, once it gets all the new ones up and running.
Cornerstone strategy
A key facet of NTT’s data centre strategy is that it seeks to build its own facility once it gains sufficient scale in a particular market, after initially colocating in a data centre where it has a strong network presence: “When we have sufficient scale it makes sense to have our own data centre facilities. This is a cornerstone of our data centre strategy.”
This is the case in London, where NTT has been since 2000 and is now constructing a new data centre after initially acquiring 85% of UK data centre provider Gyron Internet Limited last June. NTT still has infrastructure in a couple of carrier-neutral locations in London, but Padilla says that one will migrate: “We’ve hit our changeover point in London.”
NTT operates a mixed strategy, recognising the value of both third party carrier-neutral data centres and having its own facilities.
He notes that there are many things for a carrier to pay for in multi-tenant facilities, including things like power and space and that “the more people in the chain, the more people making a living”.
And in other markets where NTT colocates in carrier-neutral data centres like France, Germany and Spain, Padilla says NTT is hitting the scale where it’s starting to reassess its data centre strategy: “In Europe in 2000 there was nothing
in terms of data centre services and they didn’t make sense. But in some locations we’ve now reached the scale where we’re close to establishing our own data centre facilities.”
NTT’s strategy allows it to build a cloud that offers not just virtualisation, “but a rich fabric”.
“In the real world, customers are complicated and want everything in one building. Things they would need to stitch together from different providers they can get all from NTT,” he adds.
NTT views the cloud as a proper fully-managed service for enterprises rather than a one-dimensional virtualisation service: “The very agile computing part is a critical component, but [on its own] it rules out the cloud being important for different organisations… We need extra services and a diversity of applications.”
New opportunities
Meanwhile, NTT sees potential data centre opportunities in other global locations. The company acquired a 74% stake in Indian data centre provider Netmagic at the start of 2012 and is in the process of integrating the company and ultimately launching the Enterprise Cloud service in India. “It needs to be on our network and meet our specifications,” says Padilla, who adds that the country acts as a gateway to Asia.
“India is on everybody’s radar and is said to be about to explode, but people have been saying that for the last 20 years. It’s hard to say when it might happen.” Padilla points out that many other economies are still growing in the Far East, offering new markets in which to sell products, while other areas like the UAE and Russia also offer potential.
In Russia, for example, the move towards establishing high-quality connectivity is becoming a key attraction for carriers. “If there’s already fibre and good connectivity, then it’s one less thing to worry about,” says Padilla, who adds that NTT is keeping an eye on potential local data centre opportunities. He says the managing director of the Russian branch of NTT, which already has offices in Moscow and St Petersburg, has indicated that there are new opportunities in the country and is waiting to see if any pan out.
Padilla also highlights that NTT is already involved in the TEA-2 overland cable between Hong Kong and London. In a press release last August, the company said “with the launch of the NTT Communications Hong Kong Financial Data Centre (FDC) in 2013, the TEA-2 landing site will provide Tier-IV ready data centre infrastructure with an ultra-low latency network”.
Padilla says there are drivers for data centres in the Far East, such as growing economies and new markets in which Western companies can sell products.
Overall, Padilla believes the global data centre market is on the up: “Data centre demand continues to boom. We went through some years of using the glut of space left over from overbuilding in the dot com boom, but that has been used and space is at a premium.”
