Colocation Hosting: The Challenges of Meeting Growing Demand
Data center operations, including colocation hosting, change almost on a daily basis. These changes affect current and long-term business. They involve things like core data center management, planning, operational strategies, risk management and more. The goal is to prepare for, and adapt to, these trends with an overall focus on resource optimization and cost reduction.
One major development in the data center market is the growing demand for colocation hosting. Although significant investments have been made in data center facilities over recent years, availability remains an issue. According to Nemertes Research, a shortage of colocation hosting space will occur in 2012 and will grow to a $1.9 billion facilities gap by 2015.
Nemertes Research calls this scenario “the colo crunch.” The analyst compared the current and predicted availability of colocation hosting facilities to user need. The company concluded supply is growing, but demand is growing faster.
Determine Supply
Nemertes used primary and secondary research to calculate market size and projected growth rates. The company valued the 2012 U.S. market at approximately $18.5 billion. This figure accounts for all commercial colocation hosting facilities. Nemertes expects the market will grow to approximately $31.2 billion in 2015.
The industry analyst also determined 2011 colocation hosting space in the U.S. was 67.7 million square feet. By 2015, Nemertes expects square footage will expand to 144 million square feet.
Calculating Demand
Both the value and square footage of U.S. colocation hosting facilities indicates a significant uptick, it still isn’t enough to keep up with the huge growth expected in the sector. Nemertes measured demand by interviewing several hundred enterprises about their planned deployments.
The challenge to this analysis involves separating what percentage of colocation hosting a company will outsource. Businesses outsource data center operations for reasons beyond colocation, including PaaS, IaaS, cloud solutions and more. Isolating demand for just colocation hosting becomes tricky.
However, the analyst was able to come up with a rough estimate. About 8.75% of total enterprise data center space is devoted to colocation. Nemertes expects this percentage will increase to 14.11% by 2015.
You can see from this analysis how demand is anticipated to outpace supply. If supply doesn’t accelerate soon, companies may find colocation space more difficult to secure in the coming years.
Therefore, colocation hosting providers have an opportunity to expand their facilities to support this growth. When selecting a colocation provider, it makes sense to fully understand their growth strategies. Then, make sure they can support your requirements both today and well into the future.
CyrusOne currently provides more than 1,000,000 square feet of colocated floor space in top tier data centers across the nation. Colocation facilities are located in Houston, Dallas, Austin, San Antonio, Cincinnati, Chicago, London and Singapore. Our services are targeted to enterprise clients throughout a wide range of industries. For example, we serve businesses in industries such as energy, oil and gas, medical, technology, finance, consumer goods and services, and more.
Our advanced, highly flexible design architectures support power requirements exceeding 250 kilowatts per square foot to meet the needs of the most demanding enterprise requirements. Each facility is designed to provide optimal redundancy, efficiency, security and future-proof reliability.
