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Data centers are all over the map – literally. Amazon, Microsoft, Google, Equinix and Digital Realty, each added more than a million square feet in regional data center expansion in the past year, according to IHS Markit’s Cloud and Colocation Data Center Building – Biannual Tracker.
Why regional? Low-latency edge data centers can power previously impossible applications and business models based on 5G cellular connectivity. For now, the vast majority of companies with edge strategies use colocation and cloud services to reap these benefits.
But, in 2019, company-owned micro data centers are anticipated to grow from 30 to 50 percent. Strategies for global expansion are a top priority for these organizations.
We increasingly hear global deployment challenges from our customers. We partner with them to enhance their data center builds through our understanding of global financial and regulatory environments and decades of manufacturing experience.
If you’re planning for the regional expansion of your cloud data centers, here’s what you need to consider.
Tariffs are a major consideration when planning for data center growth. Crowell Moring estimates there are $50 billion worth of Section 301 tariffs on imported technical goods from China today and another $200 billion currently on a 90-day hold. To help reduce costs, companies must develop a multi-country strategy.
Because tariffs can apply to component and finished goods, you must consider the tax implications of the design, selection and sourcing of components, as well as where they will be assembled.
A flexible deployment strategy is ideal. For example, shipping data center components out of the country to be assembled in a free trade zone then imported into the target country can reduce the impact of tariffs.
We offer tax, trade and operations consulting to help you minimize costs and maximize success. Our expertise, rooted in financial supply chain design, helps you streamline costs and speed time-to-market.
Globally, countries are increasing legislation around data security. Environments will differ by region with each country and sometimes cities establishing their own legal requirements.
Companies must prepare for how their business, and the data elements they plan to provide, will overlay against the regulatory environment of the region. It is crucial to have legal entities, or a partner that possesses them, inside the countries of business. We have the ability to certify data center products to comply with local regulatory certifications including safety, EMC and radio. We can also coordinate in-country testing when required.
When considering building new data centers, providers must purposely design for a modular approach that addresses tariff and regulation concerns. This could mean building data center components in a transit country before the final destination. Or, in another region, importing raw materials to build locally.
Our global footprint helps you prototype and manufacture where it makes sense for you. Our full-stack smart automation further provides fast customized lines to be erected within regions to meet customer expectations while optimizing investments, productivity and costs.
Our knowledge and skills are universal, so we operate with the same agility and speed wherever you’re looking to expand. We have the experience in global cloud data center build outs to help meet the needs of cloud providers looking to expand regionally.
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