What that means for us now is we have to be able to execute our vision inside peoples current, existing, real estate footprint. So, for a customer with a legacy three-tier type data centre, as they add new modules and refurbish parts of their existing data centre, we enable a three-tier data centre to work at the same time and talk directly to their new two-tier data centre.
We have several customers who are migrating to this type of thing in the region. For example, Hong Leong Bank in Malaysia, which had a many-tiered network within its facility, and recently as part of the Hong Leong Group was moving to a shared services facility. They cut the number of layers in their data centre from many to two, and are exactly at that middle point that Ive just described, and theyre enjoying the benefits of that. Theyre now positioning to move towards a single data centre in the future.
How soon is this future?
The timeframe that we give for the prevalence of single-tier physical data centre is 20 years. The average life cycle for data centre networking and other equipment is somewhere between four and seven years. Now, if you think of certain economies running things a little bit hotter than others, such as Singapore, four or five years is probably the average life of networking equipment. Now, if you consider that the last we aligned a lot of those upgrade solutions, it was around Y2K. Five years after 1999around the mid-2000sand another five years means that probably at this point in time, 2010, theyre ready for their next upgrade or their next refresh.
So for the majority of customers who are turning over their equipment every four to five years, pretty much were very well-timed. Given that the products been shipping for two and a half years, weve got a fairly decent installed base when it comes to the number of customers that have already embraced this type of design.
What will it take to convince your customers who, for whatever reason, are content to just hang onto their current architectures to move to move toward having single-tier data centres?
A good way to look at this is if we verticalise the market. Some verticals are more responsive and some are less so.
If you look, for example, at government: often in times of financial duress governments will invest to stimulate economic growth. And weve seen a lot of networks and e-infrastructure being replaced in the last few years as part of that stimulation package.
For contrast, you look at a retail bank. A lot of retail banking systems, such as ATM machines-based systems, are 20 years old already. The thing about them though is theyre incredibly reliable. So banks are reluctant to move off something thats worked well for such a long time because moving is incredibly costly.
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