As South Africa reels from the news that the country’s economy is now officially in recession, companies are looking to cut costs and bring relief to tightening operational budgets.

According to Gartner, this has led to an increase in data centre outsourcing as organisations firstly do not have the capital available to build their own, and secondly are forced to reduce expenses. The research company says midsized companies have shown significant interest in outsourcing, a trend that corresponds with other periods of economic decline.
“Neotel is committed to introducing more services to the market to add even further value to our customers,” says Stefano Mattiello, chief sales and customer service officer at Neotel. “The data centre is just one more step in the direction of managed services”
According to Mattiello, it is this urge to reduce costs as well as the need to move towards more energy efficient methods that drives growth in data centre usage.
“Data centres are evolving and advancing by focusing mostly around power efficiencies and green initiatives,” he says.
This includes the possible rise of carbon taxing and power consumption costs which are expected to increase globally by up to 60%. “These market forces are all driving innovative designs and solutions around data center construction and operations locally and abroad,” he adds.
"The Neotel data center is an example of a fresh new approach in the South African market – our data centers are modular in design, with high energy efficient technologies allowing the highest data center cooling density,” says Rajeev Sinha, head of product and solutions at Neotel.
This is particularly important in the South African context following severe electricity shortages last year as well as Eskom’s latest proposed price hikes. Sinha says energy efficiency issues and solutions in the data center include a design that must minimise power overheads and thereby drive power efficiencies all the way to the power socket.
“Also, improved cooling techniques such as water chilled and hot row cold row methods, will further limit excess power utilisation.”
Another critical area of concern remains ROI, with the initial investment in building one’s own data centre being very big under tight economic conditions.
“Technology is changing and evolving at a rapid pace that it does not make sense for organisations to build their own data centers, unless they can keep up with technology trends,” says Sinha. “The shift in mindset is to rather let the data centre outsource service provider carry the capital outlay and the continuous need to ensure the latest technology is in place."
According to The Nemertes Research Group, there are a number of reasons why organisations move to data centre outsourcing, such as the cost of building a data centre, the need for greater levels of redundancy and the cost of keeping up with advancements in technology. “A data centre built in 1991 to last until 2015 would have required modifications for the Internet in the mid-1990s; in 2000, for blade servers; and in 2005, for what is now called cloud computing," it says.