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Tag: Colocation

  • Hyperscale operators to boost colocation market

    Hyperscale operators to boost colocation market

    Synergy Research Group (SRG) says hyperscale operators are the fastest growing customer category for colocation providers. For both wholesale and retail colocation, 2018 revenue from hyperscale customers grew much more rapidly than revenues from other service provider customers and from enterprises.

    While the overall colocation market grew by 10% in 2018, revenues from hyperscale operators grew by 24% in the wholesale segment of the market and by 16% in the retail segment. Enterprise spending on wholesale colocation was relatively flat in 2018 compared to 2017, while enterprise spending on retail colocation grew by 7%.

    Synergy’s Q4 and year-end data shows that the total colocation market grew to over $34 billion in 2018.

    Growth was strongest in the APAC region, with China, Hong Kong, Japan and Singapore showing the highest growth rates in the region. Hyperscale operators comprise the world’s major cloud and internet service firms, including the largest operators in IaaS, PaaS, SaaS, search, social networking and e-commerce. The other service provider category includes telcos, non-hyperscale cloud providers and internet service firms, hosting/outsourcing companies and content & digital media service providers. The enterprise category includes all other industry verticals plus government and the public sector.

    “It comes as no surprise that hyperscale operators are providing a boost to colocation providers, as they are on a charge to rapidly extend their worldwide data center footprint and in 2018 ramped up their capex by no less than 43%,” said John Dinsdale, a chief analyst at Synergy Research Group.

    “In order to support this rapid growth they cannot just build their own data centers, so they also need to rely on colocation providers to lease out both large wholesale facilities and capacity at smaller edge locations. Hyperscale operators are becoming an ever-more important source of business for leading colocation companies such as Equinix, Digital Realty, Interxion, CyrusOne, QTS and GDS.”

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  • Colocation providers facing escalating challenges

    Colocation providers facing escalating challenges

    As demand for colocation data centers continues to swell, the role of a colocation provider has never been more important, but the challenges they face continue to intensify.

    To understand the future dynamics of the colocation market Schneider Electric partnered with 451 Research to survey 450 end user decision makers of colocation services in the United States, Australia, Europe and China across multiple geographies.

    Providers today are dealing with an ever-changing set of buyers, evolving customer demands and a growing list of emerging technology such as the Internet of Things (IoT), next-generation edge computing and cloud computing.

    Each of these categories pose both an opportunity and a threat to the colocation segment, and the survey results speak to how each is viewed by colocation end users in terms of adoption and importance.

    With 62% of those surveyed saying they have moved IT applications out from colocation data centers and into public cloud within the last two years, colocation providers must look to find ways to entice new and existing customers to consider colocation as a viable option for their businesses.

    “Whether they deliver the services themselves or via partners, successful colo providers are increasingly broadening their service offerings,” said Rhonda Ascierto, Research Director, 451 Research. “Our research identified several value-added services that align with colo customers’ changing needs.”

    It became clear throughout the research that there are many ways to gain and maintain competitive advantage amongst other hosting options. With 82% of respondents saying it was either very or somewhat important that cloud services are hosted in the same data center as their colocated IT infrastructure, colocation providers can turn what may seem like a threat to the segment into an opportunity.

    Many additional statistics within the report offer opportunities for providers to set themselves apart from their competitors.

    For instance, 65% of customers surveyed said they would be more willing to use a provider that had data center infrastructure management (DCIM) deployed. Other technologies such as lithium ion batteries, on-demand prefabricated modular (PFM) capacity, and direct cooling also resonated strongly with customers.

    Meanwhile, 82% of respondents said they were interested in using more remote-hands services from their colocation provider to track or monitor the work being done via an online portal. For providers, this presents an opportunity to either expand or introduce new services and open up revenue opportunities for their business.

    The most successful colocation operators will ensure all of these customer questions and requirements are addressed to ensure they are in a position to take advantage of the 64% of customers who said colocation will play a role in their data center strategy during the next two to three years.

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