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Why colo makes sense

By combining data center colocation with strong third-party support and on-demand capacity services, businesses can take better control of their IT environment and see the benefits of the public and private cloud environment, with few of the downsides.

Data center colocation is not a new concept, and surprisingly enough, it has benefited from the headlong rush to the cloud. In fact, data center colocation revenue is expected to grow nearly 15 percent over the next five years, according to Global Market Insights. Anecdotally, among those in the colocation community, it is believed that no less than 20 percent of all corporate workloads now run in colocation data centers, with some vendors projecting that number to increase to 50 percent.

As cloud technologies have matured, the realization that not all workloads are best served by cloud deployment has become clear, but so has the benefit of no longer needing to run and maintain your own data center.  Here's a look at some numbers:

  • 54 percent of large businesses will continue to build additional data center facilities, especially to support service and application delivery at the edge.1
  • 47 percent of survey respondents plan to use colocation facilities to support new deployments.2
  • 40 percent of enterprises will have doubled their IT asset spending in edge locations and edge colocation facilities versus core data centers.3
  • 60 percent of enterprises will use flexible, lower cost IT consumption models that leverage centralized IT asset depots jointly run by hardware suppliers and colocation providers.4

The longtime mantra of the colocation business is, “Our job is running data centers. Your job is running your business. Let’s both do what we do best.” With the prevalence of cloud computing in the enterprise, this has become even more true. Businesses are being weaned away from a dependence on their own dedicated data centers, yet the need for data centers isn’t going away.


Reasons to have access to a data center

Mission-critical legacy applications may not be suitable for transition to the cloud. The ability to maintain security, adhere to regulatory requirements, and maximize performance all provide motivation to have dedicated data center facilities.

Businesses are also finding that workloads don’t always achieve the expected performance and reliability when deployed to the cloud and are better served with equipment under their direct control. As such, the technology market has evolved to the point where it makes even more sense to use colocation data centers than it did in the past.

One of the main reasons companies use to justify moving from their own data center to a colocation facility is the same reason that's touted for moving to the cloud: better cost control. While capital expenditures for IT equipment remain, the operational costs associated with maintaining your own data center are significantly reduced. The level of detail and the granularity of control that can be maintained is little different from that of the traditional in-house data center, but as noted earlier, organizations can focus on the business needs that enable the application of business expertise while leaving the minutia of running a data center facility in the hands of contracted experts.

Contracting with a colocation provider gives the business the opportunity to select from a broad range of capabilities and resources. While some organizations may require no more than an empty rack with a certain amount of power, others may be looking for a complete solution with defined quality of service and service-level agreements in place, and every level of service in between.

This kind of flexibility is also one of the bonuses of using colocation data centers; whether your requirements are for a rack, a cage, or an entire data hall, the advantage of using colocation is that you can tailor your space, power, and cooling requirements to your specific needs, limiting the traditional data center pitfalls of overprovisioning and rapid obsolescence.

Freedom to choose

Changing business requirements make another case for colocation. With the move toward the Intelligent Edge and a focus on edge computing, moving the IT workload equipment closer to the customer makes a great deal of sense in terms of performance and efficiency. Building your own data centers at multiple edge locations is almost never a practical or cost-effective solution. Dealing with the issues of delivering power and appropriate backhaul would further complicate such a deployment.

The level of IT support your colocation solution requires is also up to you. You can contract for full operational support or just a space to put your equipment in, with your own IT staff handling all the traditional support tasks. Or, you can decide to contract for something in between—it’s all about the flexibility to get what you need without having to pay for things that are unnecessary to your business.

Changes in the way IT does its traditional purchasing are also having an impact on colocation. The advent of cloud services has made the idea of moving IT workloads off site more palatable in many organizations, while colocation allows the level of control traditionally associated with having your own data center facilities. The flexibility colocation solutions offer is further increased by the availability of third-party support services and pay-per-use consumption models.

How to maximize the business advantage

Consider the combination of consumption-based IT, third-party operational support, and colocation handled by a single vendor. With consumption-based IT, you specify the hardware necessary to meet the needs of your IT workload and have the ability to meet increasing workload demands without renegotiating leases and support contracts. Usage metering and active capacity management ensures you’ll always have the capacity you need ahead of demand. Now add to that an entire gamut of data center facilities requirements, from power and space to cooling and connectivity.

The consumption-based IT model has become more than just a financing argument; it is changing the way IT does business. By delivering the expected benefits of the cloud to an on-premises solution, businesses get the efficiencies of the cloud model—simplicity, scalability, pay per use, and flexibility—all while maintaining the level of security and control expected of an in-house hosted solution.

From providing necessary space, to meeting changing power and cooling requirements, to ensuring adequate connectivity for changing workloads and performance requirements, colocation gives businesses the ability to manage everything through a single portal as part of an as-a-service experience, bringing the most attractive benefits of traditional cloud to on-premises solutions.

1 IDC’s 2019 Datacenter Operational survey, 400 respondents

2 Ibid.

3 IDC FutureScape: Worldwide Datacenter 2019 Predictions, October 2018

4 Ibid.

Why colocation makes sense: Lessons for leaders

  • As your hybrid cloud strategy matures, colocation data centers can provide additional options.
  • Colocation can be a faster path to new application and technology deployments.
  • Consumption-based IT and colocation can combine for improved flexibility compared with traditional data center and financing models.

Useful link:

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This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.