On-Premise Datacenters Struggle amid Supply Chain Issues, Time Pressures, and Skills Shortages

According to the latest State of the Industry Report, businesses are grappling with sustainability targets, rising risks from rapid project completion attempts, and maintaining quality standards.

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According to the sixth annual State of the Industry Report by UK datacenter firm Keysource, supply chain challenges and accelerated project delivery demands are causing dilemmas for the IT industry. The survey, encompassing the insights of more than 250 IT directors and datacenter professionals, concluded that businesses are simultaneously grappling with sustainability targets, rising risks from rapid project completion attempts, and maintaining quality standards amid supply and expertise shortages.

Despite perceptions of easing supply chain disruptions post-pandemic, 62% of the survey’s respondents reported negative impacts due to product shortages. Similar findings were echoed in a recent report on the datacenter real estate market, with project completion dates frequently delayed due to supply chain hiccups.

Internal and External Pressures: Quality Compromises and Skills Shortages

Quality-wise, the pressure to hasten project completion emerged as a prominent concern. According to Keysource COO Jon Healy, 75% of participants identified quality issues, which he argued could have been predicted or better handled at earlier stages. Warning against organizations “prioritizing speed above all else”, Healy highlighted the concurrent concern of securing the necessary skills and expertise amid a persistent skills shortage. The survey further revealed a growing hesitation in decision-making. However, following the decision, respondents reported increased pressures for swifter project completion.

Budget and Sustainability: Realities in 2023

A demonstrable change from the 2022 survey was seen in budget allocations. With digital transformation and demand surge, budgets expanded significantly in 2022. However, in 2023, 37% of respondents indicated they anticipate their budgets to either plateau or decline.

On sustainability matters, 69% of respondents participate in sustainability discussions, with over half reporting a distinct ‘green budget’ for sustainable goods, services, and initiatives. However, only 17% consider sustainability a high priority; fewer than a third reported making significant progress in this area. Alarmingly, 64% haven’t assessed the carbon impact of their existing datacenter services, with 57% expressing no intentions to evaluate future investments’ implications.

Despite the industry’s multifaceted trials, Healy remains optimistic about the sector’s short and medium-term prospects, citing the substantial capital influx as an indication of its competitive returns. However, he cautioned that regional circumstances could fluctuate rapidly due to factors like technology, regulation, energy resources, corporate governance, and skills shortages.