Dec 6, 2011

Commoditization: Not a 4 letter word


Commoditization is a word that most service providers don’t want to hear. It’s generally insulting to be viewed as undifferentiated from the rest. Zebras, I think, find this maddening (see Marty’s identity crisis in Madagascar 2). Unfortunately, it is a word being thrown around relative to the data center business a lot these days.

I have, however, ultimately come to the conclusion that the commoditization of the data center is a reality. Certainly, I can and will argue that how you assemble or configure the underlying infrastructure is important. I’ll also argue that there are varying degrees of quality in the underlying infrastructure. And I’ll further argue that how you maintain that infrastructure is very material. (I do like to argue.) But what I can’t really argue is that abstractly one N+1 facility is better than another. (I suppose I would still argue it just to see if you’re paying attention.)

What commoditization has done to the outsourced data center business is rather interesting. Because the underlying data center has become less and less differentiated over time (subject to the points above that are still relevant), the commoditization of the data center has led service providers overall to evolve, differentiate and tune the final solution to the target audience more than ever before. Colocation providers have been able to focus on just-in-time, enterprise solutions heavy on service and flexibility. Wholesale data center offers have developed to provide a larger scale, lower cost solution with fewer services to fit the needs of many former DIY insourcers. The solutions available in and coming to market have created a very exciting time to be a consumer of data center services. This also means it’s a pretty exciting time to be a data center service provider.

If you don’t believe me, come visit us at our Dallas Open House. I’ll be happy to show you how commoditization of the data center has allowed Internap to craft the best colocation product in the market. And why this product could be the best thing to ever happen to your business.

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