Digital Transformation’s Impact on Data Centers

Digital transformation, or the process of replacing standard or manual business procedures with digital counterparts, is fundamental to scalable operations in the digital era. The process of integrating digital technology into all business areas comes with distinct challenges and noticeable growing pains—especially for data centers. Data center technical teams are tasked with finding the capacity to support such an intense overhaul of business procedures.

To better understand the impact digital transformation is having on the data center industry, Cadence commissioned market research firm Sapio Research to investigate some of today’s key trends surrounding digital transformation implementation. We interviewed 500 technical professionals and 250 digital transformation leaders to bring you two eBooks that reveal these important industry insights.

Read on to get a snapshot of what to expect, or download the first eBook here and the second eBook here.

Increasing Demand for Data Center Capacity

Our survey revealed that two–thirds (66%) of transformation leaders think that their digital transformation program will increase at a faster rate than they’ve seen over the last 18 months. This is understandable, given that the rise of remote work introduced a deluge of technology that saw businesses scrambling to adapt their workforce to new ways of working.

58% of technical professionals told us that digital transformation has created more demand for data center capacity. With technological advancements, such as artificial intelligence (AI) and machine learning (ML), being applied to everyday technology—it’s no wonder there is strain on securing data center capacity.

The demand for more capacity has strongly impacted larger organizations of 10,000+ employees, with 66% citing that digital transformation has created an increased demand for more capacity. A breakdown by sector found that Manufacturing (64%), Financial Services (62%), and Healthcare (61%) noted the most expressed need for more capacity due to digital transformation.

Data Center Budget Versus Success

We asked technical professionals about their data center budget during the previous 12 months, and 38% told us that their budget had remained static, whilst most respondents (56%) told us their budget experienced an increase during that period. Only 7% reported a reduction. The expectation is that budgets will grow more in the next 12 months in comparison to the previous year (61% vs 56%). Only 5% of organizations report an expected reduction in budget over the next 12 months.

Securing budget allocation often comes with promises of success, but how do data center technical teams measure success? IT service delivery to the wider business was the most cited priority amongst our respondents, with 66% of respondents treating it as a top three metric, and most responses (75%) coming from organizations of 10,000+ employees. Zero downtime was the next most important KPI, cited by almost half (47%) as a major priority.

Understanding the Impact of Digital Transformation

Digital transformation adds another layer of complexity to the already challenging landscape of data center design and operations. Our study shows that—despite this added complexity—81% of technical professionals see the value in their organization’s digital transformation strategy. On the other hand, the fact that 19% described it as a “potential hindrance to the business” demonstrates that a worrying proportion of companies are still trying to make sense of this major technological drive.

As our world gets more and more digital in nature, it’s unlikely that any scalable organization will escape the impact of digital transformation. Rather than pretend it’s not happening, it’s helpful to start taking steps now to understand it. For a deeper look into how digital transformation is impacting the data center industry, check out eBook 1 and eBook 2 of our digital transformation series. In turn, be sure to take a look at our data center solutions that can help you meet your data center performance KPIs when it comes to embracing digital transformation.