Data centers are all over the map – literally. Providers like 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 enabled by 5G cellular connectivity. For now, the vast majority of companies with edge strategies leverage 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.
Avoid Pitfalls and Optimize Deployment with a Trusted Partner
At Flex, we hear the challenges of global deployment more and more from our customers. We’ve partnered with them to optimize their data center builds by leveraging our nuanced understanding of global financial and regulatory environments and decades of experience in manufacturing.
If you’re planning for the regional expansion of your cloud data centers, here’s what you need to consider:
Tariffs Complicate the Supply Chain
Tariffs are a major consideration when planning for data center expansion. With an estimated $50B worth of Section 301 tariffs on imported technical goods from China in place today, and another $200B currently on a 90-day hold, companies must develop a multi-country strategy for cost-effective builds1.
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 and then imported into the target country can minimize the impact of tariffs.
Flex offers tax, trade and operations consulting to help you minimize costs and maximize success. Our unique expertise, rooted in financial supply chain design, helps you streamline costs and speed time-to-market.
Regulation by Region Requires Legal Partnership
The critical nature of data protection has led countries to amplify their legislative agendas in the area of industry regulation. Environments will differ by region, with each country, and sometimes cities, establishing their own legal requirements.
Companies must establish a strategy 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. Flex has 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.
A Modular Approach is a Must-Have
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.
Flex’s global footprint helps you prototype and manufacture where it makes sense for your organization. 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.
Get Started Today … Anywhere in the World
Flex’s 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. Learn more about how we support the rapid deployment of cloud hardware, no matter the region.