How Data Center Providers Use Go-to-Market Strategy (GTM) to Power Their Growth
Are you part of a data center provider or operator?
Do you work on a go-to-market team that needs a better GTM strategy to achieve your company’s growth goals? Across all relevant areas -- including sales, marketing, customer success, product, channel partnerships, and executive leadership?
With the surging popularity of artificial intelligence (AI), machine learning (ML), the Internet of Things (IoT), hybrid cloud services, infrastructure as a service (IaaS), and software as a service (SaaS), the need to securely store this information is also rising exponentially.
However, efficiently and effectively reaching their target market has often been a go-to-market challenge for data center providers.
Colocation Data Center Providers
Colocation providers offer facilities where businesses can rent space, power, cooling, and network connectivity for their servers and IT equipment.
Customers manage and maintain their hardware, while the colocation provider manages the physical infrastructure.
Colocation data centers are shared environments, offering cost-efficiency through economies of scale and enhanced security and redundancy features. They differ from other providers by providing a shared facility for multiple clients while allowing them to maintain control over their equipment and configurations.
Wholesale Data Center Providers
Wholesale providers lease large blocks of data center space, often entire buildings or data halls, to a single client. These clients typically have their own dedicated infrastructure within the facility.
Wholesale data center providers offer a more customized and private environment than colocation providers. They cater to organizations with substantial infrastructure needs, enabling them to scale rapidly without the burden of building and managing their data center.
Hyperscale Data Center Providers
Hyperscale providers build and operate massive data centers designed to support the immense computational and storage demands of hyperscale cloud and internet companies, like Amazon Web Services (AWS), Google Cloud, and Microsoft Azure.
These facilities are characterized by their massive scale, energy efficiency, and high-performance computing capabilities. They are different from other providers in terms of sheer size and the ability to serve the massive workloads of global tech giants.
Edge Data Center Providers
Edge providers establish data centers closer to the edge of networks and data sources to reduce latency and improve real-time data processing. They specialize in deploying smaller-scale data centers in distributed locations like cell towers, retail stores, or industrial facilities.
Edge data centers cater to industries requiring low-latency applications, like IoT, autonomous vehicles, and content delivery networks, differentiating by their proximity to end-users and data sources.
Modular Data Center Providers
Modular providers offer data center solutions constructed using pre-fabricated modules or containers. These modules house all the necessary data center components, including servers, cooling, and power systems.
Modular data centers are known for their scalability, mobility, and rapid deployment capabilities. They differ from traditional data centers by their modular design, making them suitable for businesses with dynamic infrastructure needs and those operating in remote or challenging environments.
Why Data Center Providers Struggle with Go-to-Market Strategy
Data center providers face several significant go-to-market challenges as they seek to attract and retain customers in an increasingly competitive landscape.
- Rising Competition: The data center market has seen a surge in competition, driven by cloud providers, colocation services, and even businesses constructing their own enterprise data centers. This saturation can make it challenging for data center providers to differentiate themselves and stand out in the crowded marketplace. To overcome this, providers must develop unique value propositions like specialized services, green technology adoption, or innovative pricing models.
- Security and Compliance Concerns: As data breaches and cyber threats become more prevalent, customers prioritize security and compliance when selecting data center providers. Meeting stringent security requirements and regulatory compliance standards, like GDPR or HIPAA, can be complex and costly. Providers must invest in robust security measures, undergo regular audits, and demonstrate their commitment to data protection to gain the trust of potential clients.
- Technology Advancements: The rapid evolution of data center technology creates both opportunities and challenges. Providers must continuously modernize their infrastructure to stay competitive, incorporating energy-efficient cooling systems, advanced automation, and cutting-edge hardware. Staying ahead of the technology curve while managing costs and ensuring seamless transitions can be demanding.
- Energy Efficiency and Sustainability: Sustainability is a growing concern in the data center industry. Customers increasingly seek providers that prioritize energy efficiency and environmental responsibility. Achieving high levels of energy efficiency while reducing carbon footprints can be a substantial financial and operational challenge. Data center providers must invest in green technologies and practices to align with these expectations and differentiate themselves as environmentally conscious partners.
- Cost Management: Building, maintaining, and upgrading data centers can be expensive. Data center providers must balance the need for cutting-edge technology and security with cost-effectiveness. Developing pricing models that are competitive while ensuring profitability is a constant challenge. Additionally, market fluctuations in hardware and energy costs can impact the bottom line, making cost management a critical concern for providers.
According to Gartner research, 83% of business-to-business (B2B) purchase decisions happen before a potential buyer even talks to a seller. This process includes conducting research, comparing options, and evaluating pricing.
McKinsey & Company found that between 70% and 80% of B2B decision-makers now prefer to make decisions using digital means, like websites and online resources.
In its B2B Thought Leadership Impact Report, LinkedIn and Edelman concluded that although thought leadership is still crucial for engaging customers, it's become challenging to stand out amid all the noise.
Have you ever been told to watch out for the six most dangerous words?
"We've always done it this way."
That mindset served the taxi industry poorly when Uber and Lyft came along. Blockbuster Video didn't fare well against Netflix, Hulu, and other streaming giants. And remember when Motorola and BlackBerry dominated the mobile market? They fell behind when smartphones took over.
And what about Microsoft? They didn't do so hot when they timidly entered the mobile device space while trying to protect their desktop OS franchise.
So, here's a critical question for data center providers:
Are you ready to be the disruptor rather than getting disrupted? And should you rethink your strategy for growth before it's too late?
To avoid being left behind, consider two undeniable realities:
- Your ideal clients only want to spend time with your sales team once they're far along in their decision-making journey. According to Gartner, that point is at 83%. Prospects now actively avoid speaking with sales reps during most of their research.
- Closing a sale isn't the endgame; it's just the start. In a world where customer happiness, retention, and growth are crucial, selling to the wrong clients can stall your company’s growth. To succeed, you need everyone on your go-to-market team—sales, marketing, customer success, product, channel partnerships, and leadership—to be on the same page with account retention and expansion.
Because technology is changing quickly, and customers want new ways of purchasing, data center providers need to update how they market and sell their services. If they do this, they can become flexible and focused on customers, providing the fast, adjustable, and unique solutions businesses need today.
Conversely, those who resist change may struggle to compete with more adaptable players in the dynamic data center marketplace. A "disrupt or be disrupted" mentality is essential to thrive in this environment.
The reasons why data center providers need to modernize their product offerings and go-to-market strategies are clear.
Stagnation in the face of technological advancements, growing competition, and evolving customer expectations could lead to disruption by more innovative players in the industry. To succeed, data center providers must be willing to disrupt their own traditional approaches and proactively adapt to the changing landscape of data center technology and business needs.
Data center providers must navigate a complex landscape characterized by competition, security demands, technological advancements, sustainability expectations, and cost pressures. Successfully addressing these challenges requires a strategic approach that combines innovation, compliance adherence, cost control, and a keen understanding of evolving customer needs.
About the Data Center Sales & Marketing Institute (DCSMI) and How It Empowers Go-to-Market Teams at Data Center Providers
If you’re part of a go-to-market team for a data center provider, you play a pivotal role in the success of your data center-related business.
You and your colleagues ensure that products and services meet customer needs, get effectively promoted, and generate revenue in a competitive market.
Your team uses a combination of market research, strategic planning, collaboration, and customer-centricity to achieve its goals.
The Data Center Sales & Marketing Institute (DCSMI) is a boutique business advisory, consulting, and training firm for data center providers as well as IT, facilities, and sales and marketing companies that partner with data center providers.
DCSMI understands the unique go-to-market challenges and opportunities that data center GTM teams face in this rapidly evolving data center marketplace, and we're here to help you excel.
Welcome to DCSMI, your strategic partner in navigating the complex world of data center go-to-market strategy and the role of GTM teams.