Hi, my name's Kevin Brown and I run the eco structure, IT software
business for Schneider Electric.
And today I wanted to take a few minutes to share with you, a perspective that we
have on the industry and what we believe are some significant new challenges that
are facing our industry and our customers.
So we started this by taking a look at, what is really happening in the industry.
And, and we were looking for some data to try and support the idea that
maybe things have gotten even 10 times more complex now versus 10 years ago.
And that type of data is difficult to quantify, but we did find this
from the world economic forum.
And if you just take a look at this data, it says Facebook and YouTube
have around 4 billion users as of 2018.
And if you do the math and go back to 2008, Facebook and YouTube
together had about 400 million.
So in other words, we've got about 10 times the number of people using those
two social media platforms in 10 years.
And whenever we look at that, that that was a tremendous amount of change
for the industry and a tremendous amount of change for society.
And the reality is, is that looking forward, we believe
it's likely to continue.
We don't necessarily know what is gonna drive the increased use of it,
the increased complexity, but it's certainly safe to assume if history's
any guide that that will continue.
So we're trying to look at it in perspective.
And we put a little historical context for our industry, what
exactly has been evolving?
So we go back and we would make the argument that in the 1980s, when PCs
first started be using, being used as servers, departments started taking PCs,
making file and print services out of them that drove a new need in the market.
That trend of PC servers drove the need.
For a new type of infrastructure, very small, very cost-effective
UPSs to support those servers.
And then consequently, that also drove the need for new software
to help manage those UPSs.
And at the time we didn't call it that, but in effect, I would argue that that
was the first version of data center
infrastructure management are DCIM, DCIM 1.0.
And it was really driven by an IT trend of PCs being used as servers, requiring new
infrastructure to keep those servers up and running, and then the need for people
to be able to manage those remotely.
And in fact, we had software that allow when the UPS want a battery to communicate
with the server and shut it down for data integrity and that continued, and
we continued to make that software better and we continued to improve the solutions.
Coincidentally, in 2000 with the.com bust.
There was a new trend that emerged all of a sudden, all these PC servers that
were being used in various departments, CIOs started becoming concerned about
them and wanted to get them under control and they started rack mounting them
and moving them into the data center.
Now it's always dangerous to put a bright line and say in 2000,
yes, this trend started maybe a little bit before and in fact may
continued for 20 years afterwards.
However, what we know is when they move those PC servers into the data center
that created a new set of challenges.
All of a sudden they started having new questions about, do I have enough space?
Do I have enough power?
Do I have enough cooling?
And software requirements started being developed in order to meet those needs
in around 2000, 2000 2007, 2008, there was a new metric that came out in the
data center called PUE and suddenly customers needed software in order to
help them manage that efficiency metric.
That's when the industry first started talking about DCIM as a defined term,
but we would argue actually that it was DCIM 2.0, so DCIM 1.0 was basic.
Hey, can I monitor my devices and understand what's going on?
Can I monitor and manage them?
DCIM 2.0 added to that, a capability of planning and modeling in effect,
we developed the digital twin of the data center before the term
digital twin was being used.
The point of this story is we actually believe right now as a
result of the pandemic, we are at the beginning of another 20-year
cycle of the industry transforming.
And the reason for that is because the pandemic really emphasized that it is
no longer just about the data center.
It is about all of the connection points between the user and the application.
That's most important.
All of that needs to be running.
All of that infrastructure is mission-critical infrastructure is every.
So let's dig into this a little bit in some of our
theories and see how that goes.
So one of the things we always like to do is we look out and
see, are there are other people that are sharing these thoughts?
And we did find some data from HPE.
And this was in March 2022, where they're saying, Hey, in 2000 there
was a core-driven enterprise, and that was pretty much how
we operated as an industry.
They're saying by 2025, they estimate that 20% of our infrastructure will be
in core data centers, 30% in the public cloud, but 50% will be in the edge.
And I think this is the defining the edge very broadly.
It is everything that's outside of the data center.
What we know is that there's going to be a large amount.
We can debate the numbers.
Is it 20 25, 30, 35?
But what we do know is no matter what numbers you pick, there's
going to be a significant amount of infrastructure that is outside of our
core data centers or our public cloud.
And how are we gonna deal with those?
And we found another article again by HPE but was published in CIO.com.
And I won't read through all of this, but what it basically comes
down to is this idea that there's data centers without boundaries.
Nothing that we did in the past comprehended the fact that we
have to deal with infrastructure that is residing in co-location
facilities, residing in centralized data centers, but also at the edge.
And so we would argue is that we are at the stage where we have to start thinking
about everything as a data center.
There's no such thing as your mission, critical environments, and
non-mission critical environments.
Like we thought 10, 20 years ago, everything is mission critical.
And how do we start dealing with that complexity?
And what new challenges does that start presenting the industry?
So if we have data centers without boundaries, this complexity of hybrid
IT, everything is at data center, whatever term you want to use.
There's new challenges.
And here are the ones that we put forward or that we see hitting
our customers in our environment.
So let's first talk about resiliency.
Resiliency's always been a top data center priority, and in fact, Uptime
Institute has done a wonderful job, helping the industry get a tier
certification program so that you would have some kind of certainty about
what is the resiliency of that data.
However, in our new environment, in the post-pandemic world, we don't
have the same resiliency metric for this type of environment.
This highly distributed interconnected network,
challenging to maintain resiliency.
And in fact, we would argue having visibility that this many geographically
dispersed sites, they're not in one location or another it's everywhere.
It's highly geographically dispersed . Number two in those
sites, there isn't necessarily onsite staff in a core-driven enterprise.
You would generally have staff in the data center.
So if something went wrong, something needed to be fixed.
You would have somebody on site to take care of that in our highly
distributed world that we are now living in, in these remote sites, you
may not have somebody there to help address any issues that might arise.
And ultimately it starts becoming a different challenge when you're
maintaining a large fleet with thousands upon thousands of
server rooms and wiring closets.
That presents a unique management challenge and a unique maintenance
challenge that we didn't really face in our previous
core driven view of the world.
And that is showing up in surveys.
So this is a survey that was done by IDC.
And it's interesting that the number one concern about edge, about what is the
leading inhibitors for you deploying edge.
The number one concern is about managing edge infrastructure at scale.
So clearly it's coming through in these surveys that this is a concern.
What's also interesting is security is rising in importance as well.
So if we take a look, number two, on that list is concerns about
securing the edge infrastructure.
Is it cyber secure?
And the third issue is, are those locations physically secure?
So when we say security, it's not only about cybersecurity.
It's also about, are they in a physical location where I
can control and understand who has access to that equipment?
So again, resiliency and security are now really getting another look
from customers and from the industry because of the challenges of edge.
And we must recognize that cybersecurity attacks where maybe 10
years ago they were, they were kind of an exception that was happening.
Now we know they were part of the regular course of business.
So we found some of this data as well, where it's basically says since 2014
to 2021, there's been a 40% increase in reported cybersecurity tax by companies.
That is a very large increase and certainly something that every CIO
today is working to address and manage.
And it, we know every 18 months or so there'll be a new, unique cybersecurity
challenge that the industry has to respond to in order to maintain availability.
We don't think that's the end for the CIOs.
We think CIO organizations are gonna be challenged.
They're already being challenged much more about being much
more a part of the business.
If you look at our dependency in IT now versus 10, 20 years
ago has only gotten greater.
And therefore it has become much more business mission critical
because the company is relying on IT.
And in fact, through the pandemic, it proved if we did not have the IT
technical capability that we have today, it's likely the economy would've
struggled much more than it did.
CIOs are being asked to do much more.
They're much more part of the business.
And as a result, we think there's a new responsibility.
That's going to be hitting them as well.
So not only about resiliency, not only about security but what are
you doing about sustainability?
And there's some articles out there talking about this, but I would pose.
And, and this is really probably an emerging trend as much as anything, but
we would say, you know, do you believe in the future, the CIO will be asked
a couple of questions, which is, what is the energy consumption of your IT?
What is the carbon footprint of your IT and what are you doing to manage it?
We would argue that today, most CIOs do not have the tools available
in order to help them answer those questions, but it'll be a requirement
of them in the coming years.
And we think this is an important issue for CIOs to embrace because
this is a model that we have.
There's different models with different assumptions, but for sake
of discussion, what our model shows is that by 2030, 50% of the energy
consumed will be outside of data centers and will be inside distributed sites.
And this trend towards a more distributed edge environment is gonna make that
portion of energy consumption grow faster.
So that by 2040, this model says 60% of energy consumption of IT
will be outside the data center.
What that implies is that the CIOs of the world will be directly responsible
for at least 50, 60, possibly 70% of the energy consumption of IT.
So for all the wonderful things that this industry has done for data centers,
from our internet giants, and they've really led the way on sustainability.
We think it's also important that the other 50, 60, 70% of energy
consumption of IT, which is controlled by the CIOs will become a focus.
And so this is something that we think Schneider has a role
in trying to help address.
So this trend that we're talking about, this is what we call DCIM 3.0, we
think there's a new set of challenges that will drive a new set of tools.
Just as it did in the eighties and nineties with PCs becoming servers.
And when those servers moved into the data centers in 2000, now we have to
meet the challenges that this need for distributed hybrid environment presents.
And it's how do we make the hybrid IT environment, resilient,
secure, and sustainable.
It's a very simple mission that we believe this industry needs to embrace.
And what we recognize is that the tools we have today, Aren't
where we need them to be.
And we are investing heavily in this business because of the
obligation that we feel we have to help customers meet this challenge.
So we put forward there's these five capabilities that we are driving our
teams on to develop, which is, you know, how do you make it more AI?
How do we leverage artificial intelligence and machine learning?
How do we use that technology to augment staff?
As we talked about, there's a lack of onsite staff.
How do I use those tools to, to automate, to deal with this hybrid environment,
which is a geographically dispersed.
Number two, we think DCIM historically the way it developed as an industry
really was much too siloed.
So what we need to work on is how do we get a unified experience, kind
of a single platform that allows you to get a better sharing between
different planning and modeling tools and monitoring and management tools.
We also think it needs to be much more modular in its approach that we
can allow people to start with a few features today and then easily be able
to add those on as time moves forward.
We've also recognized that it demands an ability to be deployed in a hybrid way.
What we've seen from customers in the last 24, 36 months, in particular, is
some are very comfortable with a DCIM that can be run purely in the cloud.
Some demand it's still just run on-premise cuz of data privacy
concerns or what have you.
And then there's others who are saying, Hey, I want to implement
a private cloud and I wanna run my decent tool in that private cloud.
And we, as an industry need to embrace the flexibility to allow customers to
deploy in whichever way they, they prefer.
And this is a challenge that we feel we are going to address.
And then lastly, just to restate is a focus on environmental
and on sustainability.
What is the IT energy that's being consumed?
What is the carbon footprint of that?
How do I get those consolidated reports?
And then more importantly, once I've done that, what can I do
proactively start managing it?
We don't necessarily have the answers to all these questions today, but
we are committed to drive our teams in this direction to ensure that we
are helping the industry meet this challenge that we see is coming.
So this is what we are positioning, EcoStruxure IT to address.
It's positioned to address these challenges that we call DCIM
3.0, and it's about what are the monitoring and management tools.
And this is what we've had in DCIM 1.0, it's about planning
and modeling tools that we've put in place as part of DCIM 2.0.
Both of those need to continue to evolve and get more mature.
However, what we have implemented in the last 18 months is we fully have
embraced and recognize that not every implementation is the same that they
need to be able to be customized.
That customers have unique challenges that's unique to themselves, and we
need to be able to modify our decent solution in order to meet those.
And then secondly, it needs to be able to be integrated in with various systems.
So we recognize that we need to be able to pull information in from
building management systems and other infrastructure systems consolidate
that data, make it available in dashboards, and then actually
maybe present it and integrate it in with other IT systems as well.
So this ability to have this very standardized platform that
also can be customized and, and implemented in unique ways.
Is something that we think is unique within Schneider.
We've developed this capability over the last 18 months.
As I mentioned, we can do it anywhere in the globe and we don't
think there's another competitor that can make that claim.
So it's being able to have that flexibility of deployment options,
diff flexibility, and capabilities so that we've got a resilient,
secure, and sustainable hybrid IT.
And this isn't unique.
So we have a few examples here.
I won't go through all the details, but sky data center has been very
successful using our tools to make their infrastructure environment more resilient.
BW Offshore using their IT operations to help them in ensure that
their infrastructure is secure.
And they're using our tools effectively to do that and make sure that they
have a cyber secure environment.
And lastly, eco data center has done a wonderful job at really embracing,
being a climate-positive data center solution, and EcoStruxure IT has
been a critical part of that overall implementation that they've done.
So I'll leave you with this with three big takeaways.
So, first of all, the industry's experience a new wave of challenges
with this complexity of hybrid IT.
And it's, it's creating this concept that everything is at data
center, and I have to manage it that way and think of it that way.
CIOs, as I mentioned, will be responsible for more than half
the energy consumption of IT.
So sustainability, we would argue is going to emerge as something that they
have to address as part of their charter.
And our goal is to be a trusted partner in that journey.
And then finally EcoStruxure IT
that is Schneider Electric software to address the challenges of DCIM 3.0.
And we are unique in our ability to scale and integrate with
customers anywhere in the world.
So I thank you for your time.
I appreciate being able to share some of our thoughts with this and certainly
look forward to further discussions.