Data Center and Colocation Talk: Trends, Market Overview, and Essential Questions for Identifying Your Needs

Colocation Overview

Colocation provides a secure data center environment for your IT infrastructure. The provider handles power, cooling, rack space, and bandwidth.

Colocation is simply floor space, power, cooling, and sometimes bandwidth in a service provider’s data center.

These data centers are redundant with many available carriers, dual fiber paths, and dual power sources.

They offer protection against network or power failures. The amount of space rented is entirely up to the client — anywhere from a partial rack to an entire data center.

Enterprise-class service providers offer various compliances (SSAE 16, PCI, HIPAA, NIST, etc.) and more than 99.9% SLA’s for uptime. Colocation can be combined with other cloud solutions such as cloud computing, managed applications, and managed databases.

Why consider colocation?

• Security protection from disaster, theft, network, power, and loss
• Reliability - improve uptime to 99.9% or more
• Cost-labor and maintenance costs to manage on-premise equipment
• Office relocation-if you need to relocate an office or are looking at new office space, or have acquired other offices
• Compliance requirements

Key datacenter providers

Key market trends in data center & colocation

Market growth continues

According to the Global Data Center Colocation Market Outlook & Forecast Report 2023-2028, the global data center market is expected to grow from $30 billion in 2022 to $46 billion in 2028.

In addition, a recent survey by Avant Communications (source: 2024 State of Disruption Report): medium and large enterprises have already moved a significant amount of IT infrastructure into colocation facilities, but organizations under $100M in size are close behind in their adoption of colo services.

Adoption of data centers is growing and highest among organizations between $1 million and $10 million (13% increase in the next 12 months) and those between $50 million and $100 million (10% increase), according to AVANT’s survey results.

Focus on environmental sustainability and renewable energy

• Companies are focusing on using renewable energy as a main power source
• Organizations want to reduce environmental waste and further protect the environment by using clean energy sources such as solar and wind to run data centers

5G Networks, Increased bandwidth, and IoT

• Organizations are turning to 5G networks to enhance their digital transformation efforts
• Demand for high bandwidth internet to support data volume throughout the country
• IoT applications deployment along with 5G to support networks for various industries including manufacturing, healthcare, and farming

Regulatory demands and privacy concerns

• Data privacy and regulatory concerns are helping to drive growth for colocation services
• Organizations that still own and manage their own equipment are at risk

Key questions to identify data center requirements

1) Why are you considering a new data center solution?

This is the first and most important question.

Here are a few common reasons:

Office relocation, need more/better power & cooling, need access to network carriers, decommission DR site or need additional DR site, expanding or growing through a merger or acquisition, reduce energy costs, new geography presence, reduce infrastructure costs, increased security, meet regulatory and compliance, access to cloud providers, etc)

2) Where is your IT infrastructure today? On-premise, Cloud, other colo site?

3) What is your preferred data center location(s) (geographic region of US or global)?

4) Do you need multiple data centers?

5) What is your total number of cabinets and total Power required (kW)?

6) Do you require a dedicated cage?

7) What connectivity type do you require? MPLS, VPN, P2P, etc

8) What providers do you need to connect to?

9) Do you require DDoS mitigation?

10) What are your required compliance standards? CCPA, FedRAMP, FISMA, HIPAA, SOX, PCI, HITRUST, etc

11) Do you need a secondary data center?

12) What cloud services do you use today? MS Azure, Amazon Web, GCP, MS Office 365, GSuite, etc

13) Do you need any cloud services over the next 1-2 years? Public cloud (Azure, AWS), Private Cloud (IaaS), DRaaS

14) What is your desired budget per month for colocation services?

15) What is your desired 'go live' date? Existing contract expirations, moving from another data center, etc all impact this date

How to find the right data center/colocation provider

The first question is, why would you want to do this on your own?

Leverage a partner or Trusted Advisor who can help you navigate the complex world of data center and colocation providers and services.

This will save you weeks and months, and the headache of researching providers, interviewing providers, completing spreadsheet analysis, talking with biased engineers, gathering pricing, and negotiating contracts.

Not to mention managing the implementation and ongoing support.

Trusted Advisors (like my company NetSharx Technology Advisors) can assist with the following:

1) Identify the right data center provider by doing a side-by-side comparison analysis like this example:

2) Locate the nearest data center providers in your area or desired city, depending on your certain requirements (using compliance as an example):

3) Talk to an agnostic solution specialist to complete an interactive assessment of your environment, complete an analysis, and assist with the selection of the right provider. Unbiased.

4) Provide pricing and market comparisons based on your power, space, network, and geographic needs within a matter of days versus weeks or months

Case study

Equinix & Global Manufacturing Company

The company leverages an interconnection-first strategy on Platform Equinix? with Microsoft Azure, lowering latency by up to 59% in some locations and reducing maximum latency by 29%, while improving user quality of experience for all of its Azure-hosted cloud services.

Business Results:

? Increased Azure application performance with consistent sub-100 millisecond (ms) latency across its global network infrastructure

? Reduced the network latency 4x between Azure ExpressRoute and its backbone MPLS network, from 13 ms to 3 ms

? Automated delivery of Microsoft Azure services to users in less than 4 hours vs. 8 weeks to deploy new systems/services

? $500,000 reduction in costs per year with a greater user experience

Conclusion

The global data center market continues to grow and it is not going away.

Organizations are turning to data center and colocation services to meet regulatory demands, and privacy concerns, address security risks, and impact environmental and sustainability needs.

If you are looking at data center and colocation services over the next 6-12 months, complete our interactive assessment and we'll provide you with a FREE no risk, no-commitment analysis.

We'll help you find the right data center in your desired geographic region at no cost.

For more information on data center and colocation services, complete our discovery form here .

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