Santa has increased demand for his delivery services. His data centre shack is already receiving more orders than his team anticipated, and he needs to use Big Data analysis to keep up with the trends to get presents to the right houses and to the right people at the right time. He has also taken the decision to let Rudolf have a break. Instead, he’ll be taking an autonomous electric vehicle sleigh to complete his deliveries.
Like Amazon, his warehouses are completely automated with robots. His elves are increasingly taking on a more strategic role, overseeing and planning the Christmas operations – helped by Gen-AI. McKinsey’s ‘The state of AI in 2023: Generative AI’s breakout year’ report, published in August 2023 and which is based on its annual survey, finds that a quarter of the surveyed C-Suite executives are using Gen-AI tools and that this technology is already on their board’s agenda.
The authors of the report include Michael Chui, a partner at the McKinsey Global Institute and a partner in McKinsey’s Bay Area office, where Lareina Yee is a senior partner; Bryce Hall, an associate partner in the Washington, DC, office; and senior partners Alex Singla and Alexander Sukharevsky, global leaders of QuantumBlack, AI by McKinsey, based in the Chicago and London offices, respectively. Together, they remark:
“What’s more, 40 percent of respondents say their organisations will increase their investment in AI overall because of advances in gen AI. The findings show that these are still early days for managing gen AI–related risks, with less than half of respondents saying their organisations are mitigating even the risk they consider most relevant: inaccuracy.”
Data centre power
As for data centres, they are going to power the Christmas season, and so Santa is keen to ensure that he deploys the most efficient technologies to improve his operations. In her article on 6th December 2022, writing for AFL Hyperscale, Rhiannon Robertson wrote - for AFL Hyperscale - that Adobe Analytics had found that Cyber Monday 2023 had brought in “$35.3 billion of revenue in the US, of which $11.3 billion was in online sales, smashing previous e-commerce records.
Adobe later noted that “Shoppers spent a record-breaking $211.7 billion on e-commerce between Nov. 1 and Dec. 31 , a 3.5% bump from 2021, according to Adobe.” So, the question is – after a challenging 2023 – about whether new sales records and e-commerce delivery records be broken this year. Santa thinks his own order might just explode.
Speaking about Christmas, albeit with regard to 2022, Robertson says: “This time of year has always brought an influx of website traffic and online sales, thus generating more work for the data centres behind the scenes - after the last few unpredictable years.”
As with e-commerce, Santa’s date centre supports the entire customer journey – including the logistics of getting presents to expectant children to fulfil their orders. It’s also a time when he deploys data-driven marketing campaigns, and online customer service through his team of elves using software-as-a-service Customer Relationship Management (CRM) solutions.
On top of that, there are cloud-based shipping and supply chain systems. Santa also needs to ensure that all of this is backed up so that no data is lost if there is an outage. This keeps his data centres and his entire operation going so that nobody is disappointed at Christmas time. After all, this time of year often sees a spike in activity and demand for his services.
With that comes higher data volumes, and that data not only needs to be analysed in real-time with the threat of cyber-attacks increasing, but it also needs to be backed up in three disparate locations. All of this often puts his network infrastructure under strain - no thanks to latency and packet loss causing significant jitter - and his new pipes not delivering the higher bandwidth utilisation he needs. This means that Santa is looking for a solution.
Data to grow to more than 180 zettabytes
Statista’s report ‘Volume of data/information created, captured, copied and consumed worldwide from 2010 to 2020, with forecasts from 2021 to 2025’ reveals:
“The total amount of data created, captured, copied, and consumed globally is forecast to increase rapidly, reaching 64.2 zettabytes in 2020. Over the next five years up to 2025, global data creation is projected to grow to more than 180 zettabytes. In 2020, the amount of data created and replicated reached a new high. The growth was higher than previously expected caused by the increased demand due to the COVID-19 pandemic, as more people worked and learned from home and used home entertainment options more often.”
Operations under strain
Meanwhile, Santa’s operations have also been under strain this year from increases in energy costs, increases in regulation, data volume, and the increasing risk of threat of cyber-attacks by hackers using tools such as Generative AI and the requirement to meet environmental and social governance targets. With Christmas just around the corner, Santa’s elves are working hard and undertaking proofs of concept (POCs) to make his data centre shack more efficient.
Yet, Statista says storage capacity is also growing: “Only a small percentage of this newly created data is kept though, as just two percent of the data produced and consumed in 2020 was saved and retained into 2021. In line with the strong growth of the data volume, the installed base of storage capacity is forecast to increase, growing at a compound annual growth rate of 19.2 percent over the forecast period from 2020 to 2025. In 2020, the installed base of storage capacity reached 6.7 zettabytes.”
With parents’ budgets being much tighter than they were, there is expected to be an increase in demand for e-commerce and Santa’s services, as more people are looking to him to deliver what they really want. Marketing Week reports that “UK consumers are predicted to be £3bn worse off this Christmas compared with last year, according to research from ShipEngine and Retail Economics, as the cost of living crisis continues to impact people’s spending power.”
The research by ShipEngine and Retail Economics therefore predicts that UK consumers will start their Christmas shopping earlier than usual. They predict that online spending in the UK will equate to £17.9bn online, specifically in search of lower prices.
Another Statista report, ‘Online and offline retail sales during Christmas in the UK 2017-2023’, published by Tugba Sabanoglu on 2nd November 2023, also projects that online and retail spending will increase – reading a combined value of £84.90 billion British pounds. This Christmas, she adds that the: “holiday season (covering the six-week period from mid-November to the end of December), online sales is forecast to see growth compared to the previous two years.”
Santa is also under pressure to ensure that his data centres are sustainable as well as efficient. Kelley Mullick, PhD, Vice President of Technology Advancement and Alliances at Iceotope, writes in his article, ‘Unlocking cooling efficiency: The next big opportunity for greater data centre sustainability, serviceability and scalability‘ for Digitalisation World, in November 2023:
“Data centres are grappling with an unprecedented surge in data generation. The rise of the internet, cloud services, Internet of Things (IoT) devices, social media, and Artificial Intelligence (AI) has ushered in a data revolution. We have yet to see the effect of the Internet of Intelligent Things (IoIT). Moreover, the traditional role of data centres is rapidly evolving, transitioning from mere data storage hubs to interactive powerhouses, thanks to high-performance computing (HPC) and AI applications that propel vast data streams to the edge of networks.”
Data centre transformation
Santa therefore needs to transform his data centre with the surge in data volumes: Energy costs, faster networks (by talking latency and packet loss), more accurate big data analysis and tighter cyber-security due to hackers using Generative AI. One way to take these challenges on is to invest in WAN Acceleration and solutions, such as Bridgeworks PORTrockIT, which uses artificial intelligence, machine, and data parallelisation to mitigate the effects of latency and packet loss.
With SD-WANs being popular these days, there is no need to change Santa’s infrastructure. He can deploy them with a WAN Acceleration overlay, which would enable them to utilise up to 98% of their pipe bandwidth. Investec Private Bank found a couple of years ago they had a 424% increase in total traffic across their WAN – providing what Francois Steyl, a former Solutions Architect at StratIT and now a Sales Specialist at Datacentrix, describes as an “almost instantaneous Return on Investment.”
So, by deploying SD-WANs with a WAN Acceleration overlay, Santa is sure that he’ll be able to accelerate his global operations as well as meet demand, and therefore wishes everyone a happy Christmas and Happy New Year in 2024!