Data center of the future comes to the Isar
Münchner Merkur Interview/Reinhard Clemens
T-Systems CEO Reinhard Clemens talks about innovations, Germany as a business location and the right mix of employees
Munich – With a good EUR 9 billion in annual revenues, T-Systems is the largest provider of IT solutions for companies in Germany. Bavaria is a key location for the Deutsche Telekom subsidiary, whose data centers act as the collection point for the data of many corporate groups. In an interview, T-Systems CEO Reinhard Clemens talks about the key role that the technology of the future plays for Germany as a business location.
T-Systems operates two large data centers in Munich and has upcoming plans for a "data center of the future" on the Isar River. Won't the data centers of the future be in India?
Munich is a location where we have a great number of innovation projects. For example, at our customers MAN or BMW, where we are jointly developing things like car-to-car communication and in-car internet access. Germany is a good location for riding the wave of innovation – and that's what we're doing in Munich.
What is going on at the Munich data centers?
This is where we operate global data services, such as those for Shell in 160 countries. So if someone in Kazakhstan issues an invoice or someone in Nigeria books a business trip, that goes through the data center in Munich. They all use services from here, which shows that a high-wage location can be competitive too.
And the cost?
With infrastructure services, HR costs are not the deciding factor. Hardware and energy costs account for a much larger share of the expenses. For us, it is more a question of the technology. And for such a location, it is important that we have good universities and well-educated people. A location where we can gather experts together – such as Munich.
In spite of this, T-Systems just decided to cut 3,000 jobs in Germany.
Believe me, that is not primarily a cost-cutting measure. We had much more of a structural problem. In Germany we have a great number of highly qualified employees. At the same time, however, there are a large number who have long since been replaced by low-cost suppliers in India. IBM alone has about 40,000 people in India. What we need now is a strategic restructuring, which incidentally is being carried out in agreement with the works council. To remain competitive, we need to develop the skills of our employees in Germany and simultaneously draw on a pool of employees in countries with lower wages. We must move the routine work, but retain the expertise here. The job cuts will be made as socially responsible as possible. Our program rules out all operational dismissals until 2012.
So soon there will not be any more ordinary jobs in Germany?
We will always have a certain number of them here. But naturally, the percentage of those in low-wage countries will increase. It will be a mix of skilled work and low hourly wages from abroad.
How many jobs will Munich lose?
There is no regional plan for the restructuring. But Munich is a growing location and will therefore see less impact from the job cuts.
T-Systems has roughly 45,000 employees worldwide. What will the future breakdown between domestic and foreign jobs be?
We are striving to maintain a reasonable balance, a mix of about 50:50. Currently we have 26,000 employees in Germany and almost 20,000 abroad. We will accomplish the move through growth abroad, which is taking place even amid the economic crisis. In terms of age, we need a healthy mix as well. Toward that end, we are seeking younger employees, not because the older ones are worse, but so that in a year, we won't need to hire 10,000 at once.
Are you having problems finding suitable employees?
No, and one reason for that is the crisis. We are currently seeking several hundred people with key qualifications within the industry, and we are getting them because other companies are reducing their workforces. US companies are currently laying off employees – and those are the ones we are taking for our own. At the moment, the crisis is helping us build something that we will urgently need after it is over.
Back to the new data center. Where will it be built? And what is special about it?
It will be in the Euro-Industriepark. That is our second data center location in Munich. The "data center of the future" will be all about innovation. Two problems are important in connection with a data center: It uses a great deal of energy and therefore generates a great deal of heat. Together with Intel, we are trying to find ways to work more efficiently in this respect. How can we increase energy density and at the same time provide environmentally responsible cooling? The entire infrastructure, including room air climate, is an issue that we intend to tackle and in which we are investing several million euros. The bottom line is that it is also attractive from a business point of view to use less expensive power and oil.
You are also working on the technical infrastructure for the European satellite navigation system Galileo. How important is that sort of project for you?
Very important. Aerospace is extremely important to us because it represents a challenge. For example, why do aircrafts often fly past an airport before they land? One reason is that the instrument landing system is already outdated. There is a guide beam that the pilot must follow with absolute precision. But the guide beam can only point straight ahead. Galileo will change that. The locator is built into the aircraft and knows precisely, within ten centimeters, where it needs to go. It will allow aircraft to land within much closer distances and save a huge amount of fuel. It is the next phase in the technology. The Frankfurt airport might not even have needed to expand if this new technology had already been available.
