Business leaders around the world recognize the benefits of cloud computing and are gradually fortifying their infrastructures. Many of them hope to increase their data storage capacity, yet lack the funds or tech savvy to do so. They either don't have the resources to fund comprehensive IT solutions or they lack the technological know-how required to implement a reliable security system.
Colocation solutions can serve as a great option for these kinds of businesses, as well as cloud service providers that seek a high-performance data center to fit into their expansion plans. Data center colocation providers allow clients to rent one cage in a server rack, an entire cabinet or up to thousands of square feet in the facility. This easily expandable structure helps enterprises adapt to fluctuating business demands.
Data center colocation is also widely touted for its security capabilities. In the past few years, a variety of data breaches have renewed widespread fears in regards to cyberattacks. High-profile victims such as Target, Home Depot and Sony Pictures were regularly featured in the news cycle. Lower-profile entities, such as healthcare facilities and political agencies, also regularly experience data breaches and the ensuing ramifications.
Disaster recovery has become a key focus of IT managers regardless of their sector. Colocation solutions fit neatly into this trend, as they can be a great way to prevent cyberattacks or shore up infrastructure after a data breach.
The swift emergence of disaster recovery plans
Markets and Markets, a global research firm, found that the global disaster recovery as a service market and cloud-based business continuity is expected to rise to $5.77 billion by 2018 at a compound annual growth rate of 55.2 percent, according to IT Web. That would obviously mark a significant upswing compared to the $640.8 million value in 2013.
The news outlet noted that, in the past, this kind of preparation was regularly built into some of the more affluent tech groups.
"Organizations that did have disaster recovery solutions in place were typically those with deep pockets or in industries that mandated it," Bryan Balfe, the enterprise account manager at CommVault, a provider of data and information management software, told the news outlet. "The approach was expensive and resource-intensive, requiring duplicate resources to be kept online at offsite locations – owned and operated by an organization's internal IT staff or by outsourcing providers who often specialized in disaster recovery."
However, with the proliferation of cloud computing and data centers across the globe with small, mid-sized and large businesses alike, colocation can be an effective way to implement a disaster recovery strategy. That said, there is still plenty of confusion about the way that this method should be handled.
"Today, IT leaders believe, for instance, that by implementing disaster recovery as a service, they will be able to simplify IT disaster recovery management and reduce costs," John Morency, an analyst with research firm Gartner, told the news outlet. "They also believe that disaster recovery as a service will provide failover and failback whenever they need it and that direct recovery as a service will operate equally effectively in production configurations of any size."
Morency added that the cost of disaster recovery is often decided by the size of the resources at hand. IT managers should have a clear strategy for their digital framework before investing in these kinds of solutions.
The importance of consistent security and recovery services
According to Redmond Magazine, data center downtime and even brief power outages are not accepted by IT managers. The constant need for access control means that enterprises should rely only on sturdy solutions. This perspective is reflected in the rising demand for continuous disaster recovery services.
"When we see people using disaster recovery as a service from us are those who need a recovery time objective or a recovery point objective that's measured in minutes, rather than hours or days," Monty Blight, a vice president at Peak 10, a cloud solutions provider, told the news outlet. "The big key component of that is the replication piece between the two."
Colocation solutions can provide data-driven businesses with a dependable option that can ensure not only strong security measures, but also comprehensive disaster recovery data center services. Rather than building out an internal data center, cloud service providers and other businesses with an eye on expansion and disaster recovery should consider a reliable, scalable and affordable colocation solution.
"Providers and IT decision makers need to beware of over promising on what disaster recovery means," Jason Buffington, an analyst with Enterprise Strategy Group, an IT market research firm, told the news outlet. "Real disaster recovery – even in the cloud – still means I've got to have orchestration. I've got to build a sandbox so I can do testing. It means I've got to be able to define policies."
Data center colocation is appealing to cloud service providers and other data-driven enterprises around the globe. As a result, the market is swiftly expanding.
A recent report by 451 Research found that the global data center colocation market is projected to reach a value of $36 billion by the end of 2017, according to Data Center Knowledge. The market's global footprint, which has a current value of approximately $22.8 million, would increase from 109 million square feet to about 150 million.
Kelly Morgan, a research director of North American data centers for 451 Research, said that there will be ongoing consolidation in the colocation sector.
"This remains an extremely fragmented industry," Morgan told the news outlet. "The majority of colocation facilities are provided by local operators with only one to three facilities each. However it is becoming harder for them to compete with the more geographically diverse providers that are now entering many local markets."
As the market continues to grow and more business leaders move into colocation facilities, Information Age reported that there are a number of important variables worth keeping in mind. Colocation clients should consider the access controls of a data center, the strength of connectivity and the technical and security standards.
Business leaders in the U.S. are doubling down on workplace technologies to streamline operations and optimize productivity. The recent upswing of the economy has created a favorable environment for business growth, thereby contributing to a widespread commitment of infrastructure build-outs. As a result, data center growth is on the rise in the U.S. The same could be said for colocation facilities, which offer cloud service providers and other data-driven businesses a secure, high-performance option at an affordable price.
However, the news cycle tells us that the U.S. isn't the only country that is fostering the emergence of data center and colocation growth. In many different Europe countries, these data hubs are swiftly expanding.
Report highlights European colocation growth
A recent report by Synergy Research Group, a global market intelligence and analytics firm for the networking and telecommunications industries, found that the colocation market in Europe increased by 11 percent in the first quarter of 2014, according to Data Center Knowledge. The report added that carrier neutral retail experienced nearly 14 percent year over year growth, marking its highest growth rate compared to the previous five quarters.
The United Kingdom continues to top the European colocation market by tallying 27 percent of the total quarter revenue. It is trailed by Germany, France and Netherlands, which join the UK in accounting for 65 percent of regional revenue.
"Despite the presence of all the major [telecommunications companies] in the European colocation market, the carrier-neutral segment is far larger than the bandwidth provider segment," John Disdale, an analyst with Synergy Research Group, told the news outlet. "Clearly customers see benefits in having a choice of carriers and consequently the relatively open European market has enabled the growth of pan-European colocation specialists."
Major data center expansion in Europe
According to The Wall Street Journal, many of the top tech companies in the world such as Google Inc., Apple Inc. and Amazon Inc. have built or plan to construct immense new data centers in Europe. Meanwhile, a significant number of top executives from these companies have toured cities throughout Europe to discuss their value on local economies.
These businesses are expanding their operations despite widespread regulation from government agencies. For example, Europe's antitrust regulator has filed charges against Google for violating antitrust laws. But the pressure hasn't impeded the globalization process.
"I don't believe the increased regulatory and political scrutiny of tech giants will deter them from continuing to invest and expand in Europe," Tudor Aw, a partner and technology sector head at KPMG, told the news outlet.
Amazon recently opened a data center in Frankfurt, Germany. The news outlet said that it did so to prove that it complies with stringent German data-privacy laws. The company has also bolstered its workforce in Europe by nearly 25 percent in 2014 to a total of 32,000 employees.
"Even with all of this hiring, we remain in a phase of heavy investment and have many positions available which we look forward to filling in 2015," Xavier Garambois, the head of Amazon's retail business in the European Union, told the news outlet.
A consideration for colocation
While many of these powerful tech companies possess the resources to build their own data centers, colocation would be a great way to further expand their footprints.
These facilities can help clients – whether it's a cloud service provider or a consumer-focused tech business – to gain a solid understanding of a region's market viability without a full infrastructural commitment. Data center colocation is a flexible option that can work smoothly with tech enterprises of global aspirations.
Data center colocation is an increasingly valuable strategy for a number of reasons, but perhaps none are more vital than data storage flexibility. By leasing space in a colocation facility, a cloud service provider can rent as much or as little capacity as needed, depending on their business demands.
The flexible nature of colocation has heavily contributed to the global emergence of hybrid cloud models. According to Research and Markets, a global data firm, the hybrid cloud market is projected to grow from $25.28 billion in 2014 to approximately $84.67 billion by 2019.
Mining company Rio Tinto is one of many other enterprises that has recognized the value of colocation and adapted its business model accordingly. Out-Law reported that Rio Tinto has embraced cloud-based software and a colocation strategy.
"Rio Tinto expects to directly benefit from significant cost savings through increased business agility and cost flexibility inherent in cloud services, and from continued lower infrastructure prices in line with cloud economic trends," the company said in a statement, according to the news outlet. "The solution is based on a platform for innovation – including a co-location innovation center in Singapore – and a long-term commitment to partnering."
The U.S. economy continues to show positive signs of growth, enabling tech-forward enterprises to expand their infrastructures and reconsider their business models. The proliferation of cloud computing has streamlined operations in a variety of ways, most notably in regards to data storage, sharing and backup.
Its emergence has opened the door for data center colocation, which can be a great option for businesses that would like to increase their cloud use while keeping budgetary constraints in mind. Meanwhile, the news cycle continues to indicate that IT spending is on the rise. This will help bolster the colocation market.
Survey projects more IT expenditures
In a recent survey of tech executives, approximately 43 percent of the 194 respondents said that they expect their IT budgets to increase, according to Network World. That figure marked a 7 percent increase compared to the previous year. Another 46 percent of respondents said that they will invest more in access control, identity management and other forms of cybersecurity in the next year. Colocation would be a secure option for these business leaders.
"The theme for IT spending in 2015 is all around digital business," Richard Gordon, an analyst with Gartner, told the news outlet. "So you're seeing spending in things like analytics. There's a wave of data coming from customers and social media. And as the Internet of Things rolls out, there will be even more information on customers. Businesses are scrambling to figure out how they can extract value from that information."
A bright future for cloud computing
A January report by Goldman Sachs found that spending on cloud computing platforms is expected to increase from $16 billion in 2014 to $43 billion in 2018, according to Forbes.
"Cloud computing will continue to expand and will continue to become a utility that is widely embraced," Jonathan King, the vice president of cloud strategy and business development at CenturyLink, told the news outlet. "A lot of that you can conceive outright – a consolidation of platforms for new workloads, a consolidation environment for existing workloads, or actually becoming a place to run high-production workloads."
Colocation suits cloud growth
Many businesses hoping to increase their IT capacity would be wise to consider data center colocation. This strategy allows a business to place its digital infrastructure in a secure, high-performance data center without restraints on space or connectivity. As the cloud becomes an increasingly central part of business operations around the globe, colocation will serve as a viable solution for expansion plans.
In the age of cloud computing and other digital technologies, chief executives are doing their best to protect private data and conduct business in the best interests of the clients. When dealing with a tight budgetary framework, it can be difficult to achieve this goal. Quite often, funds with a cloud service provider must be allocated toward marketing, sales and product development, among a host of other important resources. Not all capital can be dedicated to security measures and storage capacity, even when a business has a strong interest in expanding its cloud operations and infrastructure.
In these cases, which are more and more common among cloud service providers throughout the world, data center colocation has become an appealing choice. It can be a great way to get the most out of a data center without breaking the bank.
Colocation fuels the evolution of cloud computing
A colocation solution allows a cloud service provider and any other data center user to lease floor space in a shared facility. A client can rent one server rack, an entire cabinet or more. The company shifts as much or as little infrastructure as it would like to the data center and benefits from its power, cooling and network properties. Depending on the agreement, the client may manage their own hardware or allow the colocation vendor to manage it for them.
There are a variety of reasons why a business might opt to go with a colocation solution instead of simply building out its internal data center. When cloud entities and other companies hope to expand their reach as a business without building a new data center, colocation can suit them well. It can also work smoothly for a business that would like to back up its infrastructure in a remote, high-performance location. Data decentralization is an emerging security strategy that goes hand in hand with colocation.
Research shows that the hybrid infrastructure setup is gaining plenty of steam in the digital marketplace. Colocation will become an increasingly central part of this evolution.
Survey indicates widespread expansion of cloud use
A recent survey of members for The Open Data Center Alliance found that security continues to be the main concern for cloud users. That said, more than 80 percent of respondents said that they plan to use hybrid cloud computing solutions in the future.
There are a significant number of data center operators who are working internally. Since 2012, survey respondents who have more than 60 percent of their operations in an internal cloud increased from 10 percent to 24 percent. The amount of respondents who have one-fifth or less of their operations in an internal cloud services declined by 23 percent.
About 63 percent also noted that, by 2016, at least 40 percent of data will be placed in an internal cloud, compared to 38 percent from 2012. Meanwhile, approximately 36 percent of respondents said that their organizations would contain 60 percent of their data in internal clouds by 2016. That marked a significant rise from the 18 percent figure in 2012.
While internal operations will continue to be a major part of cloud computing, these statistics leave plenty of growth potential for colocation options.
"The results of our member survey validated the importance of interoperability between cloud vendors to expand enterprise adoption of cloud computing," said Reyk Bederke, the ODCA chairman and president and the vice president of the cloud integration center at T-Systems. "Our members are working together to drive the market toward interoperable cloud services as they continue to push more operations into the cloud."
The emergence of hybrid and colocation solutions
According to Data Center Knowledge, IBM believes that a hybrid model is the key to the cloud's development in the business world. A hybrid foundation can be a major catalyst for smarter technologies, the company noted.
"Everybody is becoming hybrid," Danny Sabbah, the chief technology officer for IBM, told the news outlet. "Businesses are looking at context-based, intelligent applications. They want to create a more personalized experience for clients."
Colocation can be an exemplary way to achieve a suitable hybrid framework. Cloud service providers that are reaping the benefits of this type of data center setup are able to liberally shift operations between an internal system and an external one. This approach offers flexibility that can be incredibly valuable for a temperamental client base.
"Where you build depends on the success," Ian McVey, the director for enterprise and systems integrators with Interxion, told the news outlet. "What happens when someone wants to do real time? Geolocation? Wants to check against the customer base, check against the store database and send a text message to see if the customer opted in? The current solution is so spread out, that by the time you do all the hops, the consumer is down the street. The answer is to colocate some of the assets."
Cloud service providers place a premium value on infrastructural flexibility. These types of enterprises prefer the ability to increase or decrease cloud storage capacity depending on the demands of the marketplace. Colocation solutions are a great way to achieve this wiggle room. Clients can lease as little as one server rack or as much as thousands of square feet in a shared data center.
Dustin Bolander, the vice president of technology at Technology Pointe, an IT firm, recently spoke with The Next Web and said that the cloud has opened up a variety of storage options for businesses.
"Previously when you bought a server, you were trapped within that box," Dustin Bolander, the vice president of technology at Technology Pointe, an IT firm, told the news outlet. "If the company needed less resources long term, you still had to committed to that capital cost. If you needed more long term solutions, you were stuck making large purchases for more servers. Cloud lets you right size things on a monthly or shorter basis."
Tech Target reported that decision makers should consider how to best support IT needs when designing a cloud infrastructure. For businesses that would like to expand capacity over the course of several years while keeping budgetary constraints in mind, colocation can be a suitable solution.
Business leaders and IT managers are bolstering their data center operations in a variety of ways, most notably by increasing their dependence on cloud computing. More and more forward-thinking executives recognize the cloud's ability to streamline the processes of data storage, access, sharing and backup. They also view it as an effective and affordable way to globalize a workforce and reduce carbon footprint. Its continued emergence has in turn created a favorable market climate for colocation solutions.
The colocation difference
With a colocation agreement, a business such as a cloud service provider leases floor space in a shared data center. The colocation client can rent one cage in a server cabinet, an entire server cabinet or a full rack of up to thousands of square feet in the data center. The customer transfers its infrastructure into the colocation facility and can immediately benefit from the power, cooling and network resources of the hosting company.
Colocation is a great option for businesses that would like to expand their data center and storage capacity while keeping a budget in mind. This approach is almost always less expensive than building out an internal data center. It is also an effective choice for a client that would like to beef up its data center in a remote location or expand to a new area without building another facility.
Data center security is swiftly rising, and secure colocation solutions will become an increasingly central part of its growth.
The state of the data center security market
MarketsandMarkets projects the data center security market to increase from $4.74 billion in 2015 to $8.13 billion in 2020. The global industry is expected to have a compound annual growth rate of 11.4 percent.
North America is forecasted to have the largest share of the market at just above 37 percent, but the Asia Pacific region will record the highest growth rate at 16.6 percent.
The inevitability of human error
CompTIA, an IT trade association, recently noted in a report that human error is the main cause of 52 percent of all data breaches, according to CBS News.
"The main reason that companies exhibit a low level of concern over human error is that it is a problem without an obvious solution," the report noted, according to the news outlet. "A high level of concern over malware or hacking can be addressed with an investment in technology. A high level of concern about employee error can possibly be addressed with an investment in training, but there are complications involved.
The news outlet added that only 54 percent of companies have any kind of cybersecurity training. Data center colocation can be a great way to expand data center operations and diminish the odds of human error.
Even with the continued development of cybersecurity strategies such as encryption and biometric technology, data breaches continue to hamper businesses around the globe.
A recent report by Verizon identified more than 63,000 security incidents over the course of 2014, according to The Atlantic. A total of 1,367 of those incidents were confirmed as data breaches across 95 countries.
Politicians are increasingly aware of these threats and are beginning to respond with legislation. The National Law Review reported that Reps. Marsha Blackburn (R-Tennessee) and Peter Welch (D-Vermont) have introduced a data security bill that would establish a federal standard.
"This bill will help enhance the security of sensitive information and provide much needed clarity by creating a national standard and ensure that consumers are notified of a breach without reasonable delay," Blackburn said in a statement, according to the news outlet.
While legislation of this ilk and cybersecurity strategies are often worth the time and investment, data-driven business leaders should also consider colocation solutions as a way to protect valuable information. These secure, high-performance systems can provide an effective alternative to a centralized, in-house data center. The decentralization of data and the remote placement of information can be quite beneficial for enterprises that want to expand their storage operations and capacity.
As cloud computing continues to become a more central part of operations throughout global commerce, the data center market is quickly expanding. This has opened up plenty of potential for colocation solutions.
Data center colocation is an appealing option for businesses that would like to expand their infrastructures with budgetary constraints in mind. This option provides the client with a secure, high-performance network that can help an enterprise decentralize its data or expand to another region without building an internal facility.
The data center sector continues to grow and colocation will be one of the greatest beneficiaries.
Strong revenues for the data center market
IDC, a global market research firm, recently reported that the global revenue for enterprise storage systems rose 7.2 percent year over year to nearly $10.6 billion in the fourth quarter of 2014, according to EWeek. Data storage spending increased 3.6 percent to $36.2 billion over the course of the year.
"The storage market had a strong finish to 2014," Eric Sheppard, the IDC research director for storage, said in a statement according to the news outlet. "Fourth quarter spending on enterprise storage systems was up strongly in most major geographic markets, driven by traditional year-end seasonality, demand for midrange systems that incorporate flash capacity and continued growth of systems designed for hyperscale data centers."
The research firm also noted that revenues for the open networked disk storage systems category, which includes storage elements such as cables and controllers, rose by 6.1 percent year over year to $6.3 billion.
Projections for sustainable data center growth
Enterprise Tech reported that the gradual proliferation of cloud computing in the business world has fostered a strong growth environment for the data center market. The industry is especially vigorous in the Dallas and Northern Virginia regions, each of which lured nearly 40 megawatts of new data center leases in 2014.
Cushman and Wakefield, a Dallas-based commercial real estate broker, noted that competitive pricing for data centers is still traceable in the city despite the surging demand. However, a number of enterprises are struggling to keep pace with the market. The news outlet noted that Digital Realty, the largest data center business in North Texas, will not have storage capacity until later in 2015.
"Data center operators continue to become more disciplined and sophisticated in phasing in new supply," the survey noted. "With a burgeoning pipeline of tenant requirements pointing to sustained demand, there are growing concerns that some markets may see temporary pockets of supply constraints – similar to conditions in Northern Virginia this time last year."