Colocation and Interconnection Trends: How the Edge will Play a Central Role as We Move Forward
Netrality’s CRO, Amber Caramella, joins Schneider Electric’s Regional Director, Gary Lamora, on episode six of Schneider Electric’s Data Center Tech Bytes. Read the transcript below or listen to the podcast here to learn about what is trending in the colocation and interconnection industries, and the different types of edge approaches and strategies that will support our increasingly digital world – where centralized and distributed, hybrid cloud and data centers all coexist.
Welcome to Data Center Tech Bytes brought to you by Schneider Electric. Today’s moderator is Gary Lamora, Regional Director at Schneider Electric, and his guest is Amber Carmella, Chief Revenue Officer at Netrality Data Centers. Enjoy the episode.
Gary Lamora (00:25):
Hi Amber. Thank you for joining us today for another episode. Welcome.
Amber Caramella (00:29):
Thank you, Gary. I’m thrilled to participate today in the Schneider Electric podcast series. Thank you for having me.
Gary Lamora (00:36):
We are excited to have you on as well. So, thank you. Since we have a limited amount of time here, Amber, let’s jump right on into it. There’s a lot going on in the service provider segment these days. So outside of the continued growth that we’re all seeing in the hyperscale data center market, what are you seeing as the biggest trends across the colocation interconnection industries this year?
Amber Caramella (01:00):
Well, for the remainder 2020, I see a continuation of key trends that have been driving growth across colocation and interconnection industries. Such as 5G, IOT, AI, machine learning, and many other applications that are already growing at a rapid pace. With that said, I’m also seeing an accelerated growth of people’s roadmaps relative to digital transformations to adapt to the new digital norm. I’m also seeing an increase in velocity with everything across video streaming, video tours, video calls, and several other applications that are requiring high speed internet, low latency, and reliability. I think those are probably the main ones. And then, of course, the primary one that I see is edge computing and more and more enterprises are turning to colocation providers to enable edge computing to actualize the full potential of their application services and really run them from anywhere. So, in my opinion, colocation will continue to be a cornerstone of the connectivity as edge computing continues to evolve.
Gary Lamora (02:14):
Amber we here at Schneider Electric are seeing very much of the same trends driving the industry and market today. As we’ve all heard and learned, I think the term is we’ve seen years of digital adoption here in just three months. You know, you’ve used the catchphrase of the past 12 to 18 months – edge. Edge is a very big topic. You and I both go to any industry events and it’s plastered on the walls everywhere, but the one thing with edge is there a lot of varying different opinions around what the true definition is. Just so we can level set with the audience today, since you mentioned edge a couple of times, what is your definition of edge?
Amber Caramella (03:08):
There are varying definitions of edge, as you know, depending on who you talk to, but for me and for Netrality’s purposes as an interconnected data center, the edge is basically the ability for data center services to remain closer to their end users. The edge is multifaceted. It’s comprised of both infrastructure, edge, and device edge. You know, in my opinion, there’s a wide spectrum of layers ranging from small devices to phones, tablets, laptops all the way to autonomous vehicles and drones. So, I think edge computing can take place anywhere that processing power is located in close proximity to an end user, but I think of it from an edge data center perspective.
Gary Lamora (03:57):
Okay, great. You know, from our lens and perspective, we would agree with the broad definition of edge that you just shared. It’s anything from a closet type application back to a very large regional data center where we’re bringing the compute closer to the customer. How do you see that impacting the digital economy of today? I know you touched a little bit about it and on it, but is there any insight that you have as it pertains to your customers that you’re working with, and anything that you are seeing from a trend or need perspective?
Amber Caramella (04:35):
Yeah, I think that there’s some broad trends across several different verticals. You know, as enterprises are altering their go to market strategies in order to innovate and grow revenue outside of traditional growth models, I’m seeing them grow out of core markets and expand into these secondary and tertiary markets. I think enterprises are looking to innovate to stay relevant – to differentiate their value proposition – and they’re doing that by creating new product offerings and packaging services in different ways. Really that transformation spans across many sectors such as healthcare where we’re all seeing healthcare leverage telehealth and hospitals are transforming to mobile computing labs. In these environments, you need to have access to data and make fast decisions, and data needs to be closer and closer to the edge in these new technology deployments. I’m also seeing similar trends across automotive, logistics, and financial verticals that are also leveraging smaller tier two, tier three markets for edge deployments.
Gary Lamora (05:53):
I am part of our strategic accounts organization, where we are focused on a very narrow band of customers that represent both the cloud service provider segment as well as your traditional commercial enterprise accounts. We’re seeing very much the same technology trends and drivers as it pertains to their infrastructure strategy. So, we’re seeing very much the same with the accounts that we consult and work with as well. Transitioning here and really piggybacking on what you just shared with the audience, when do you think we’ll see a strong impact of edge deployments, and where are you really seeing some examples today of where edge is being deployed? Because while we hear a lot about edge, edge, edge, a lot of the practical applications of the larger implementations we haven’t necessarily seen happen yet. So give me your thoughts on that please, Amber.
Amber Caramella (06:54):
We’re actually seeing some impact now. I think, as you mentioned, although we are seeing growth across the board, definitely we’re seeing celebrated growth and demand, to your point in key verticals such as CDNs. CDNs have experienced unprecedented peaks in video traffic which is driving aggressive network expansion to keep up with that capacity. And we’re also seeing those CDNs expand to new geographies to meet customer demand as well, and that that actually has been happening. What’s interesting about that to me is that cable MSOs are also executing their edge deployments by aligning architectures with CDNs. So typically these are, you know, two way, three way conversations happening with the cable MSOs and the content delivery provider and the data center operator. Together CDNs and Cable MSOs, are all rapidly deploying network nodes and multiple data centers that are in close proximity to their end user and choosing edge data centers within the heart of Metro markets to ensure that that traffic is local and off the congested internet. So, I would say outside of CDNs we’re definitely seeing a steady growth in demand with cloud service providers, as you’ve mentioned – where they are executing edge deployments across the world to get closer to their end users. In both secondary and tertiary markets, you know, the impact of these deployments remains to be seen, but they’re definitely growing in scale.
Gary Lamora (08:31):
We met with a CDN earlier this year that my team supports right after the COVID situation stay at home orders were put in place, and they shared with us some amazing stats where they saw over a 30% spike in their traffic, in the month of April alone. It then pulled back slightly, but was still in that 10 to 15% range above normal bandwidth. So, one of the things that we are all learning in this is the need for that edge flexible architecture deployment, where they can handle the varying degrees of traffic capacity at this point in time. As it pertains to the MSOs, you talked a little bit about them looking to deploy and move some of their data centers closer to their end users. Do you have any examples of where you’ve worked this with some accounts on that you can share with the audience?
Amber Caramella (09:38):
I think I think I’ll take a step back a little bit and just talk about that. When I’m seeing with that group of customers is really kind of a hybrid infrastructure model. So, you know, today, as we know, our world today is basically built around the centralized architecture which we know cannot feasibly support emerging applications and business requirements the additional capacity that you just referenced as well. You know, I think hyperscalers, web scalers, CDNs, they’re all driving significant infrastructure investment based on low latency and network availability needs. These networks are being designed to avoid any single point of failure while maintaining latency requirements. And these requirements are leading to massive, massive infrastructure expansion, and their ability to connect to multiple cloud environments is paramount. So, they also need data center partners to get them there. I think it’s a hybrid hybrid approach and different models that we’re talking about here, but I think they both exist.
Gary Lamora (10:46):
Thanks, Amber. So really where you’re seeing the strongest impact of edge deployments today is around content delivery networks, the cloud and service provider, hyperscale industry, cable MSOs, and from an enterprise perspective, the traditional health care, financial service companies etc. From your perspective, will edge deployments be hybrid of all these approaches, or do you see them as one type of deployment dominating all of them from a rollout perspective?
Amber Caramella (11:19):
I do think that there will be a hybrid approach with this. I think there’ll be a hybrid approach to accommodate the hybrid infrastructure models. What I mean by that is today’s internet is built around current state and centralized architecture, which alone cannot feasibly support these emerging applications. So, I see both models. I see centralized and distributed models coexisting just as I see hybrid cloud and data center model architectures coexisting. To me, they’re not mutually exclusive. My sense is edge computing will modernize the traditional data center by bringing compute and source closer to the end user. As edge computing expands, there will be growth in both core and edge deployments, which, in my perspective, is a hybrid infrastructure model.
Gary Lamora (12:15):
Can you share with us your thoughts on developing a successful strategy to implement edge both from a regional and on-premise perspective when your customers are rolling out new technology within their environment? How are you working with them today to ensure both a successful implementation for both you and your customer?
Amber Caramella (12:42):
It can be challenging for sure. I think our approach and strategy is to really partner with our customers as well as our ecosystems of cloud and network providers in our data centers. That way we can provide a variety of different options and a variety of connectivity and service options. We work with them to understand their key business initiatives and roadmap relative to data center and cloud strategies, and we enable that strategy. I think Netrality Data Centers is uniquely positioned in most of our markets because we own and operate strategic interconnected data centers and meet me rooms. We’re able to provide a mix of co-location powered shell and wholesale data center solutions that are really driven by fiber dense, network rich interconnection environments. As we discussed today, that’s critical to support these type of new trends and new technologies.
Gary Lamora (13:39):
Thank you for that, Amber. Well, that’s all the time we have today. So on behalf of Schneider Electric, I really would like to thank you for your time and insights on the market today. But most importantly, I’d like to thank you and Netrality for your partnership within the industry. We look forward to continue this conversation moving forward with you, thanks again. Thank you for listening to an episode of data center tech bites brought to you by Schneider Electric to learn more about Schneider Electric and the services they provide, visit SE.com. Make sure to subscribe to the podcast on Apple podcasts, Google podcasts, or wherever you listen to podcasts to make sure you don’t miss an episode.