Significant Growth Predicted for Data Center Colocation Market

A recent report from IMS Research forecasted significant expansion within the data center colocation market. This growth illustrates the need for facility managers to make the most of existing space in their organization’s structures and provision power resources efficiently.

The report stated that in 2012, the colocation sector boasted a market value of approximately $6.5 billion. That figure is set to climb to $10 billion by 2017, representing a considerable boost in annual revenues for those in the industry. CyrusOne reported that IMS associate director Jason dePreaux noted the retail colocation sector will contribute the most growth within the market.

Factors Contributing to Market Growth
A number of organizations have opted to utilize data center colocation, and this report illustrated that this trend is set to continue in the next few years. This type of arrangement provides a number of benefits for customers, as the third-party service vendor maintains the company’s hardware within their data center facilities. In this way, the client takes advantage of the security measures, network support and other resources offered by the colocation vendor and frees up space and assets on their own premises.

Furthermore, panelists at the Data Center World conference also pointed out that as more businesses connect with applications and content via cloud computing infrastructures, this also contributes to growth in the colocation sector.

Overall, industry expert Jim Leach pointed out that for many clients, colocation provides access to power resources not available within their own businesses.

“The colo business began as an outreach of the telecom industry,” Leach stated in the report. “What’s really driving this industry is power. Can I expand and contract power? Can I move power around the data center? Going forward it will be about power and how we provision it.”

Challenges to Be Addressed
The coming growth in the data center colocation market will present some challenges that must be addressed. One main hurdle to overcome is the availability of and reliance on outside electricity resources.

A number of facilities have recently experimented with sustainable data center power alternatives as a means to provide the necessary energy in a cost-effective, environmentally-friendly manner. These electricity sources could also be a means to address growing needs due to colocation market growth. Data center power alternatives already being utilized include solar panel arrangements, wind power, fuel cells and gas turbines. Although these sources are not yet mainstream in the industry, as the colocation market continues to grow, an increasing number of data centers will turn to these utilities.

In addition, expansion within this sector will create a need for server space and additional infrastructure. Instead of building new facilities to provide the resources to meet these needs, data center operators can first take advantage of the vertical space within existing structures.

Computerworld contributor Patrick Thibodeau reported that IBM took this approach with a facility built in Bangalore, India. The facility features four five-story towers of data center space, where each floor has 10,000 square feet of raised floor space constructed in a modular style. This structure was built to make the most of the vertical space available, a strategy that can be used to address the space issues created by colocation market growth.

In order for data center companies to leverage the increasing demands within this sector to their advantage, they must ensure that they have the power resources and space needed for colocation. By deploying solutions like data center power alternatives and rearranging the layout of facilities to make the most of vertical space, they can do so in a cost effective manner while lowering their environmental impact.

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