Colocation is an increasingly popular choice for companies that want to cut down on data center spending without relinquishing control over their equipment. The market for wholesale and retail colocation is expected to surpass $43 billion by 2018, according to MarketsandMarkets. This represents a compound annual growth rate of 11 percent from 2013 to 2018. Retail colocation, in which businesses lease space in a large data center that services multiple clients, is rising in demand, with retail colocation deals often topping 1 megawatt of critical power to satisfy scaling client needs.
Many organizations that have little experience with massive infrastructure needs are now faced with increasing convergence between business and IT. This dive into the deep end can quickly subvert budgeting, resourcing, tech support and data strategies that companies have carefully planned. Colocation provides an alternative to an endless cycle of purchasing new equipment, building additions to onsite data centers and retraining staff. As Computer Weekly contributor Clive Longbottom pointed out, it makes little sense to build a facility given so much uncertainty, when it’s nearly impossible to predict demand even a few years down the road.
Unlike managed services, in which a company outsources the oversight of its infrastructure to a provider, colocation enables it to use its own servers and retain control of installation, maintenance and management. This can be a good first step for an organization that may have less experience with IT outsourcing but knows that it can’t subsist much longer on the status quo.