Colocation offers businesses a cost-effective way to expand storage capacity

March 10, 2015

As businesses around the globe continue to gain¬†comfort with cloud computing and cybersecurity measures, they naturally hope to expand their storage capacity. The cloud’s ability to significantly ease the processes of data centralization and sharing is something that business leaders want to maximize. The good news is that cloud service providers typically allow clients to increase their capacity levels at relatively inexpensive costs.

That said, it is often much less costly to sign a lease with a colocation provider than it is to build out an in-house network. Colocation data centers rent floor space to a variety of different cloud users on a contract basis. Clients can rent one cage in a server rack, a whole server cabinet or a rack with thousands of square feet in the colocation data center. It all depends on the specific company’s demands.

And by all indications from the latest market research, colocation is becoming an increasingly central part of digital commerce.

Data center market declines as colocation rises
A recent survey by 451 Research found that the total number of data centers declined by 1 percent in North America and 2 percent in Europe in 2014, Data Center Knowledge reported. This figure doesn’t signal the decline of data centers. It simply indicates that IT managers are more often using fewer but larger spaces. Colocation is at the heart of this trend.

“The bright spot for facilities vendors being that those cloud and [multi-tenant data center] providers will need to accommodate the growing demand for outsourced IT resources with their own facilities, albeit fewer and more efficient ones,” Daniel Harrington, the research director for enterprise data centers at 451 Research, told the news outlet.

The growth of storage systems spending and revenue
IDC, a research group for the IT sector, found that global enterprise storage systems revenue increased 7.2 percent year-over-year to nearly $10.6 billion in the fourth quarter of 2014, according to eWeek. Capacity shipments rose 43.7 percent year-over-year and spending appreciated 3.6 percent to $36.2 billion.

“The storage market had a strong finish to 2014,” said Eric Sheppard, the research director for storage with IDS, according to the news outlet. “Fourth-quarter spending on enterprise storage systems was up strongly in most major geographic markets, driven by traditional year-end seasonality, demand for midrange systems that incorporate flash capacity and continued growth of systems designed for hyperscale data centers.”