We know the situation: the pandemic pushed work online. Issues in shipping and labor made many things harder to find. Worse yet, there’s no perfect forecast for when this will get better. Scarcities in the time of greatest need have raised inflation, alongside global conflicts and trade issues.
On the other hand, data centers can raise prices as their services became more in demand and limited by the supply chain problems. More people online has meant greater needs for cloud storage, which would normally be excellent for the data center industry – if they weren’t also being hurt by the supply chain slowdown.
Global Chains of Parts and Materials
Larger construction materials have had their problems, but the supply chain has struggled most with chips, connectors, servers and switches. Prices for these small component commodities are now higher than seems reasonable, especially in America, though the EU is starting to do better.
Difficulties have included receiving parts and materials with labor and transport slowdowns, budgets based on how things used to be, and further delays as every individual problem compounds. The most modern and ubiquitous products – our appliances, computers, phones and vehicles – may sometimes be sold without the expected modern features.
Those in the cloud server building industry are facing shortages and stoppages, pushing back what they promised to deliver. Some now need 10 weeks extra for parts and materials to arrive, which stretches everything else out too. Components are taking 60 weeks or more to arrive, double from previous years. Prices have doubled or even tripled, creating wide-reaching inflation from delivery times alone.
Impact on the Data Server Industry
The tech supply chain’s problems have passed on to everyone, especially the rapidly growing data center industry. Hardware, network parts, resistors, servers, storage and wires have failed to come in. Semiconductors especially are hard to find, a critical component for data servers.
At least large data centers are not yet running out of cloud data storage. They can’t add capacity as fast as they once could, but major markets had prepared for massive growth already. In the future though, clients will need to spread data across multiple areas and perhaps even different data storage providers.
Reactions by Data Center Providers
To work through these issues, data centers have increasingly devoted effort to new and old tactics of the factory production industries. They are finding parts and materials for new data center construction on a global scale, as stoppages continue for old shipments but deliveries must move.
Some providers have focused on their people, creating experienced part-finding teams with the best procurement and parts sourcing procedures. These business units are setting up new contracts for everything a supplier can make, stabilizing their prices. With careful planning and relationships across the entire supply chain, they are keeping vendors happy with on-time payments for late parts and specific projects to focus on.
By diversifying their sources of parts and materials, or finding multiple sources for what they always need, these groups are growing the foundation of their supply for parts and materials. Especially valuable are new sources and delivery routes, or specialists in frequently rare parts. Occasionally they are spending more on parts if necessary, accepting rising inflation.
After they get them, critical parts and materials are now kept ready in warehouses, while providers deliver what they do have faster to make more room. Often those with standardization of key parts and design will buy larger quantities to save individually. Purchasing well before they need parts and looking farther ahead for what they’ll need has caused many to re-learn when parts should arrive.
When all else fails, some providers are simply finding and ending inefficiencies in their procedures or modernizing data centers with what they can upgrade. Better maintenance of older equipment keeps them working longer, and there’s a growing appreciation for sustainability and net-zero goals.
What Can You Do?
Whether you work online or have returned to the office, you likely use cloud data storage. Despite the problems in the global supply chain or the impact on data centers, you can still find good people, parts and sources. Deciding where and how to make your work more efficient is more important than ever. Need help navigating the difficult climate of data storage? We can help.