Colocation Market Set to Hit $43 Billion by 2018

October 24, 2014

"From running applications to accessing resources in their cloud deployment, much of these functions are performed within a data center facility. However, as demand for these services rise, so too does the cost associated with maintaining the hardware and ensuring that users receive reliable uptime and support. For this reason, many organizations are turning to colocation services to reduce operational costs while taking advantage of the center's existing technology. Colocation's numerous benefits like disaster recovery, improved security, minimal power outages and increased network availability are drawing more interest to its offerings. The market numbers demonstrate its climb to mainstream demand.

Data shows significant boosts in colocation interest
Colocation is old technology, that has proven to IT managers it can provide reliable uptime and service. Recent research shows that because of these benefits, demand for this option is steadily growing. According to a report by MarketsandMarkets, the market is expected to hit more than $43 billion by 2018, marking an 11 percent increase annually from the $25 billion it was valued at in 2013. North America showed the biggest interest in colocation, accounting for over half of the colocation market by volume. While this is significant, all global regions are expected to experience substantial growth in colocation demand through 2018.

The reason for this development likely boils down to the advantages organizations can reap through colocation services. These solutions typically have enhanced data security and better bandwidth speeds while enabling businesses to keep up with their competitors.

""An organization availing a colocation facility out not only reduces their operational cost, but also leverages the provider's bandwidth to gain better speed for their business-critical operations,"" the report stated. ""Networking and data transfer among carriers within a data center remains another lucrative business goal served by these colocation facilities.""

What will next-gen colocation look like?
Many organizations actively seek the newest technology and services that incorporate next-generation solutions. Colocation is among offerings that are constantly evolving to bring better opportunities to customers and their users. A white paper by Internap noted thatcharacteristics of colocation in the next generation will feature remote and advanced management capabilities, colocation hybridization, high-density data center design and unified management portals. These types of tools will be critical to meeting user needs as they become more complex and seek to do more with their applications and devices.

""Businesses facing new technology challenges need to unify their infrastructure and solutions to better manage their applications and workloads,"" the white paper stated. ""This often means finding ways to connect internal, cloud and colocation services into a seamless configuration. State-of-the-art data centers and colocation services have progressed to meet the needs of these trends by combining structural changes with proven, complementary technologies to support high-density configurations, remote management and hybridization.""

Colocation services are steadily on the rise, and it will be important for organizations to take advantage of these solutions in the near future. Using colocation will not only show significant cost savings, it will also enable businesses to heighten their application support and resource availability."



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    "From running applications to accessing resources in their cloud deployment, much of these functions are performed within a data center facility. However, as demand for these services rise, so too does the cost associated with maintaining the hardware and ensuring that users receive reliable uptime and support. For this reason, ...