Data Foundation: The Shift to a Distributed Data Architecture

Description: In this series, we’re covering key insights into the four digital infrastructure foundations: Compute, Network, Data, and Security. This blog features distributed data architecture and how a strong data foundation positions enterprises for growth well into the future.

Author: Dan Eline, Vice President of Platform Solutions, Digital Realty

Businesses are currently navigating a shift from the digital economy to the data economy, where enterprises must harness the power of data to stay competitive. Their digital infrastructure is also shifting to a data-centric architecture as next-generation business use cases emerge, leveraging Artificial Intelligence (AI), big data, and Machine Learning (ML).

The obstacles with data growth and the impact on underlying infrastructure

Data Gravity - the impact of rapidly increasing volumes and complexity of data, is amplified by the adoption of AI, big data, and ML. As datasets continue to grow exponentially, organizations face critical challenges, such as siloed data that hinders real-time data processing and analysis. This makes it difficult to gain actionable insights and make data-driven decisions.

Enterprises need to ensure that their data infrastructure is performant, extensible, connected and secure to stay agile and responsive to market demands. The transition away from legacy data infrastructure to a distributed hybrid data architecture empowers companies to thrive as a part of the new data economy.

Dan Eline, Vice President of Platform Solutions, Digital Realty discusses why the data foundation — integrating, localizing, and managing data — is key to meeting IT priorities.

The case for a distributed data strategy

Instant, on-demand data rules the business IT landscape. However, enterprises with siloed data, unstructured data, and poor data governance models outnumber those with tight, well-managed distributed data architectures.

• More than 70% of North American companies surveyed report lack of investment in infrastructure and analytical tools.
• Trapped data: 81% of enterprises have siloed data.
• Data management issues: 72% of enterprises note managing data remains a top barrier to expanding AI use cases.
• Proliferation of unstructured data: Unstructured data will reach 221,000 exabytes by 2026, making it 80% of the world’s data by 2025.¹

Top four market trends driving the need for distributed data architectures

1. The need for real-time data and processing of large data sets: On-demand business intelligence touches every part of enterprise operations, from dynamically customizing marketing offers to quickly identifying and neutralizing cybersecurity threats.
2. Growth in IoT and AI spending: According to McKinsey and Company, AI use cases could generate up to $4.4 trillion in economic benefits per year. One use case involves merging AI and IoT for automated management of endpoints, sensors, and smart devices. IoT analyst Carlos M. Gonzalez at IDC notes that IoT investment is no longer a luxury but an essential for data-driven enterprises.
3. Cloud and digital transformation: Global spending on digital transformation continues to grow at a 16.2% CAGR between 2022 and 2027, with projections to reach $4 trillion by 2027(IDC). Cloud computing continues its growth trajectory as well, with a 20.4% forecasted increase by Gartner. Public cloud spending will reach $824.7 billion by 2025, reports the research company.
4. Global expansion: With business location expansion comes data sovereignty requirements. This demands enterprises establish points of presence for data storage, processing, and governance. Fast-growing companies partner with colocation data center providers with global footprints to quickly spin up global locations, remain in compliance with applicable laws, and push forward to the achievement of business objectives. IDC’s recent Cloud Pulse survey revealed that nearly half of respondents (48%) see data sovereignty and compliance as key to future IT infrastructures.

Considerations as enterprises adopt a distributed data strategy

Although Data Gravity puts constant pressure on business operations, the amount of data in an enterprise isn’t the largest obstacle. Performant access to data unlocks its power, and data silos create barriers to efficient data access. Deploying a distributed data architecture positions enterprises to extract, aggregate, cleanse, and transform data around strategic priorities.

• Data Compliance: Global business growth and expanding volumes of data pose challenges to enterprises relative to data governance, such as data sovereignty regulations. Enterprises deploying a distributed data architecture maintain compliance while maintaining performant access to localized data.
• Data Analytics: Distributed data architectures enhance real-time access to data for enterprises from all global points of presence, accelerating data-driven analytics initiatives.
• Data Streaming: Deploying distributed infrastructure for data streaming enables low-latency access to data for analytics tools. Examples include data from IoT sensors, security logs, bank transactions, web traffic reports, and application performance data.
• Latency: Distributed data infrastructure deployments allow enterprises to access an optimal environment for low-latency and high-speed data transfer in real-time wherever it’s needed most and combat unpredictable management and data transfer costs that hinder decision-making and growth.
• Actionable Business Intelligence: This distributed data architecture culminates in a powerful data engine through which enterprises can pull strategic levers that deliver critical data on demand and create a competitive advantage through actionable insights.
• Legacy Systems: As we explore the limitations of legacy hardware and applications on distributed data, we find a troubling cycle. Today’s hardware and applications serve today’s business purposes but leave companies poorly positioned to advance beyond current capabilities.

To unlock future growth, an enterprise’s core strategy is digital transformation. In our analysis of the financial impact of legacy IT infrastructure, we find that investment in a modern data infrastructure has long-term strategic benefits. Firms that settle for today’s technical fix sacrifice tomorrow’s competitive advantage. Some see eliminating technical debt as strictly financial, and others as contextual and strategic. IT leaders who get the most from digital transformation differentiate their core business through advanced IT infrastructure.

Leading companies are opting to partner with global colocation data center companies such as Digital Realty to manage the costs of digital transformation. Colocation is used as a bridge between current infrastructure and distributed data infrastructure, resulting in performant Hybrid-IT. This approach opens doors to decreasing latency, consolidating traffic, and more effectively managing data backhaul costs.

Real outcomes from real Digital Realty customers

Digital Realty has seen IT leaders reduce their deployment go-to-market times by 50%, remain in compliance with data sovereignty laws, and lower latency to microseconds for secure transactions. Here are four recent examples of the benefits sought and earned from companies partnering with Digital Realty.

Rapid go-to-market deployment: CoreWeave
Cloud service provider CoreWeave provides customers with AI-ready infrastructure, delivering a seamless and affordable experience. Positioning itself to take full advantage of the growth in GenAI, it faced the challenge of ramping up quickly to meet growing demands for higher processing power by deploying high-performance computing solutions. CoreWeave needed to reduce its time-to-market significantly in an already active ecosystem on the West Coast of the U.S. CoreWeave partnered with Digital Realty to find the right environment for their powerful cluster of AI-optimized GPUs. Digital Realty cut CoreWeave’s projected AI deployment time by 50% and ensured that the footprint of their LLM training clusters fit in one building, greatly reducing their time-to-market.

Improved latency and performance: SumUp
Financial transactions that meet strict regulatory standards, fast. Fintech company SumUp requires transactions through their mobile credit card payment system to be fast, secure, and regulation compliant. Through Digital Realty’s colocation on PlatformDIGITAL®, SumUp leveraged a Hybrid IT environment through multiple cloud service providers in Digital Realty’s Frankfurt, Germany campus. This opened SumUp’s access to regions in Europe without the complications and costs of deploying points of presence in several European countries. As a result, SumUp met the needs of both their vendors and their vendors' customers, reducing transaction times to mere seconds.

Compliant Global Infrastructure: FUGA
Music distribution and marketing company FUGA looked to expand globally without violating data sovereignty regulations. They worked with Digital Realty to place customer data within the right countries and regions to comply with data protection laws and continue anticipated growth seamlessly.

Navigating the shift

The message is clear: Enterprises without a strong data foundation jeopardize growth. One of the most compelling reasons to continue data foundation efforts in enterprise IT is technical debt. Many companies fall into a cycle of sacrificing the urgent for the important. Laying the groundwork for distributed data infrastructure is both urgent and important for business stewardship.

Digital Realty’s PlatformDIGITAL® is an open yet secure platform that reduces network infrastructure complexity. Digital Realty provides customers with a secure data "meeting place" and a proven Pervasive Datacenter Architecture (PDx™) solution methodology for powering innovation and efficiently managing Data Gravity challenges.

Discover more in Digital Realty’s latest eBook, “Are You Data and AI Ready?”

¹ IDC, Worldwide Global DataSphere and Global StorageSphere and Unstructured Data Forecast, 2023-2027