Digital Realty’s Valerie Walsh: ‘The Irish data economy is worth €9.96bn a year’

28 Sep 2018

Valerie Walsh. Image: Digital Realty

There has been a 10.4pc growth in Ireland’s data economy each year – twice that of the wider economy and nearly double that of the UK’s data economy – says Digital Realty’s Valerie Walsh.

Valerie Walsh is senior vice-president in charge of commercial and portfolio management at the data centre giant Digital Realty, which supports the data centre, colocation and interconnection strategies of more than 2,300 firms across its portfolio of data centres located throughout North America, Europe, Asia and Australia.

The company has significant data centre interests in Ireland, including a major €150m data centre campus at Profile Park in west Dublin.

‘There is €9.1bn euro of untapped potential in the Irish digital economy, which could be unleashed if there was a greater investment in data and more skilled workers’

Walsh joined Digital Realty as one of the first employees in Europe, through an acquisition in 2006. In her role, she has responsibility for the financial performance of the portfolio of 35 properties in EMEA.

In a recent survey of Irish IT managers and CIOs in 100 small, medium and large businesses, Digital Realty found that Ireland is lagging behind the rest of the world for technology investment. While 40pc of businesses across the globe have already embarked on digital transformation projects that see them investing heavily in new technology across their businesses, 64pc of Irish businesses say they are sceptical of new technology.

The most common worries for businesses investing in new technologies are security (named as the biggest issue for 41pc of businesses), the rising cost of maintaining infrastructure and access to tech skills.

What are some of the main responsibilities of your own role, and how much of it is spent on deep technical issues compared to the management and business side?

The data centre industry is constantly evolving. For almost all businesses, digital is now a critical part of their infrastructure and data centres play a crucial role in helping them extract the maximum value out of their digital assets. Data has become mission-critical to the efficiency of the business and in the delivery of value to customers.

As a result, Digital Realty needs to invest in its infrastructure to offer the best service for its customers: security, connectivity and uptime. This is one of my key responsibilities. I ensure we’re making the right investments in our infrastructure at the right time so we are delivering for our customers, anticipating and meeting their needs.

Since its inception, Digital Realty has grown from a basic infrastructure provider to become a full-service provider, offering data centre, colocation and connectivity services in every major market worldwide. My role is critical in continuing to drive this growth.

In addition, I also work closely with the sales team and with customers to make sure we’re delivering the best data centre solutions to meet both their current needs and future growth requirements.

What is the difference between Digital Realty and other data centre businesses? How does Digital Realty support its customers’ IT strategy?

Our customers need not only global reach, but also the certainty that we will be around to look after one of their most important assets, come what may. As the only data centre provider with an investment-grade credit rating, we have a unique financial strength that can give reassurance to our customers. It also allows us to invest in the very best to provide security, reliability and unparalleled connectivity for our client base.

Data is vital to our customers. It can give them a critical competitive advantage if managed well – and cause serious damage if managed badly. So, they have to be able to rely on us to deliver the whole time, to ensure that there are no dropouts or failures of systems, no matter how small.

Digital Realty has an industry-leading record here. With robust connectivity options and 11 years of 99.999pc uptime, Digital Realty’s service-level agreements provide the assurance to digital customers that they have a reliable and high-performing environment through which to deliver services 24 hours a day, seven days a week.

For many customers, it’s some of the small things that can make all the difference. With so much data, lots of small advantages can add up to a real game-changer. The key to this includes being connected with your key customers. If you are located in the same data centre as either a key supplier, distributor or customer, you benefit from improved security and connectivity. This can be a major advantage in a world where milliseconds can make all the difference.

At Digital Realty, we provide the critical digital foundations to help businesses navigate the data challenge successfully. We support the data centre, colocation and interconnection strategies of more than 2,300 organisations across our secure, network-rich portfolio of more than 200 data centres worldwide. Our customers include domestic and international companies of all sizes, ranging from financial services, cloud and information technology services, to manufacturing, energy, gaming, life sciences and consumer products. Well-known organisations – including Amazon, Facebook and Google – form a vital role as part of our interconnected community for customers.

What does the future of cloud and data centres look like?

Digital Realty’s data economy report revealed that the Irish data economy is currently worth €9.96bn annually. The presence of global technology giants such as Apple and Google, alongside homegrown start-ups such as Intercom, has been propelling 10.4pc growth in the country’s data economy each year – twice that of the wider economy and nearly double that of the UK’s data economy.

Critically, the report estimates that there is €9.1bn euro of untapped potential in the Irish digital economy which could be unleashed if there was a greater investment in data and more skilled workers.

So, the future of data centres looks very positive. Although businesses are increasingly looking after their data through the cloud, they also want at least some of their data in a data centre to spread risk, ensure security and give flexibility for future evolution. The sector is therefore developing hybrid strategies, with data centres operating alongside cloud systems to give businesses the flexibility to scale up and down at their convenience.

There is also some debate about micro-modular data centres versus larger-scale sites. Many believe that the growth of edge networking, driven by smart devices and IoT, means that the future of the industry lies with these smaller facilities. While micro-modular data centres may be deployed to meet the latency demand of IoT workloads, the more complex, high-value data demands are best met in in large-scale, highly connected sites, so we expect demand for those to continue to grow.

What role do Digital Realty’s data centres in Ireland play in the overall footprint?

Ireland has become a hub for data centres in recent years, with tech giants such as Amazon, Facebook and Apple all setting up major European data storage facilities around the Dublin area. We’ve seen this growth in response to the booming data economy in Ireland, which now employs 84,000 people. Data centres are the engine behind the growth in the data economy, with each new data centre adding up to €436m to Ireland each year.

Ireland is at a point of massive business opportunity, with Brexit set to make it the only English-speaking country in the EU. That’s bringing opportunities that will only intensify as Brexit grows closer and Ireland further enhances its position as a key gateway to Europe, with Irish businesses increasingly operating on the global stage. The country is therefore a crucial market for Digital Realty and we represent around 15pc of the Dublin market in terms of colocation, where we continue to be one of the main leaders.

Irish enterprises find themselves in an interesting position today, with many just starting out on their journey towards digital transformation. But, to grab the opportunities, businesses need to operate globally and nimbly in every market. Technology will create that ability. If they don’t invest in tech, they won’t see the benefits of the global marketplace.

What are the big trends and challenges in your sector, and how do you plan to use IT to address them?

One of the biggest trends we’ve noticed is the growing demand for data centres, because businesses are becoming increasingly aware that by investing in their data, they stand to achieve significant efficiencies in businesses operations and increases in financial profit. A recent Forrester economic impact study found that one Digital Realty customer benefited from a 96pc three-year return on investment from our colocation offerings.

Our data economy report shows how data is making businesses’ existing services simpler, faster and more reliable. It also helps them open up new business possibilities, such as new operating models, new revenue streams and new markets to enter. But the challenge is taking hold of the much larger opportunity the data economy could bring.

For example, data use in professional services will grow by 61pc as we see changes such as AI coming into use in law firms. Business support services such as telemarketing and logistics will also grow by 61pc, with data helping them deliver services faster and more efficiently. If we take the right steps to better use our data, it could be worth even more. Underinvestment, skills shortages and reluctance to embrace open data policies are the biggest risks to achieving that potential.

In terms of challenges, maximising a data centre’s security and ensuring it remains fit for purpose is an ongoing challenge. Data theft is on the rise and attacks can be both online hacking and physical break-ins. We are heavily invested in ensuring both our digital and physical security are kept at the highest level to provide the peace of mind our customers expect when it comes to their data.

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John Kennedy is a journalist who served as editor of Silicon Republic for 17 years