For many years, digital transformation has been a key focus for businesses, but during the past 18 months, organisations’ efforts have accelerated, in some cases bringing about years of change in just a few months. Crucially, this shows no signs of slowing down. IDC forecasts that direct digital transformation investment growth between 2022 and 2024 will hit $6.3tn, equating to 55% of all ICT investment by the end of 2024.
For the first time ever, we see that the majority of enterprise organisations (53%) have an enterprise-wide digital transformation strategy – a 42% increase from just two years ago. They recognise that their reliance on digital technology goes beyond keeping the lights on during the pandemic and now their digital transformation initiatives can deliver a critical advantage in a disruptive and increasingly competitive market.
The cost of downtime
Central to any digital transformation strategy is meeting the needs of a new distributed workforce. Here, changing business models, the need for real-time application availability, resilient connectivity, and the surge in internet-of-things (IoT) devices is driving the growth of edge computing. IDC, for example, estimates that businesses will deploy half of new IT infrastructure at the edge by 2023.
As dependency on critical power and hybrid infrastructure grows, organisations are facing new challenges to their mission-critical systems. These include the need to be more sustainable, maintaining staff levels, using the cloud, or building out critical IT at the edge.
At the same time, many customers are concerned about the resiliency of their infrastructure and the impact of failures on their customer base. In the datacentre sector especially, owners and operators have one overriding requirement – availability. Recent research from the Uptime Institute notes that despite improving technology and better management processes, outages remain a major concern, with both the impact and cost of downtime increasing.
Power, in fact, remains the leading cause of outages, according to 43% of IT and datacentre managers. However, software and IT configuration and network issues are gaining ground as common causes of major IT service outages. In fact, the Uptime Institute says the rise in outages caused by IT systems and network issues is due to the shift from siloed IT services running on dedicated, specialised equipment to an architecture in which more IT functions run on standard IT systems – often distributed or replicated across many sites.
Human error also continues to cause significant impacts, and with more critical technologies being deployed in remote locations, or at the edge of networks – including schools, hospitals, retail stores and restaurants – it is no longer possible to have IT service personnel at every location.
The cost of failure
Calculating the impact of downtime can be complex, but in 2020, research from the Uptime Institute found that 40% of outages cost between $100,000 and $1m, and 16% cost more than $1m.
For this reason, resilience remains one of the top management priorities when delivering digital transformation. IT managers especially understand that investment in reliable power protection systems not only reduces the risk of unplanned downtime, but safeguards applications and the reputation of their business.
Importantly, in its most recent survey, the Uptime Institute revealed that 76% of respondents believe downtime could be preventable with better management, processes or configuration. Also, according to IDC, 40% of users plan to outsource their edge initiatives, not least because business-critical edge infrastructure is, in many cases, geographically distributed, difficult to manage without adequate resources and invariably requires real-time visibility.
Such are the demands and expectations placed on edge infrastructure that it creates opportunities for partners to offer remote monitoring and management services for their customers’ physical infrastructure and deliver a managed power service that protects their most critical applications.
Customer challenges mean opportunities for the channel
Emerging digital services such as these overcome a number of key customer challenges, including the need for real-time visibility across distributed IT and critical power sites, and greater access to trained IT support. A managed power service, for example, could comprise managed services for power, cooling, IT and physical security assets, as well as on-site maintenance, replacement and support.
These emerging digital services models, or managed power services, can provide a simple way for partners to address a new market requirement for backup power protection in remote edge sites, while offering expert IT support. Also, they enable channel partners to increase revenue by as much as 40% per transaction, as opposed to traditional hardware sales.
Another key consideration is cost. Delivering a managed power service expertly designed around mission-critical IT not only bridges the skills gap, it reduces costs, in some cases by up to 59%. Without access to resilient power, diverse network connectivity and IT availability, any digital transformation strategy can quickly be derailed, and all the more so without expert support.
Interestingly, across the globe, the market spends only around 0.5% of its total IT budget protecting servers and storage with an uninterruptible power supply. A small investment when you consider the true cost of downtime.
Golden era for partners
Digital transformation spending is long set to continue, but with the cost of downtime reaching in excess of $1m per outage, customers should not only be investing in intelligent power protection and remote management software, but should be looking to partners as expert support functions.
For channel organisations focused only on revenue and sales, the future looks bleak. But for those looking to take a step further and offer consultative services to customers, the opportunities are many and the numbers are in the data.
Right now, more than three-quarters of users believe that downtime is preventable with better management, training and processes. You might say there has never been a better time for partners to embrace new digital service models, establish new recurring revenue streams and add value to their customers. The demand is there – resellers just need to know where to look.
Karlton Gray is channel director for the UK and Ireland at Schneider Electric. He is a seven-year veteran of Schneider’s Secure Power division and has held numerous roles within the company, managing large-scale enterprise, corporate and e-commerce channel partners, including CDW, Softcat, Comms Express, Ebuyer, CCS Media, Misco, Amazon and Bechtle.