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Security outweighs cost in future colocation considerations

As the demand for colocation data centres continues to grow, the role of a colocation provider has never been more important. According to a newly commissioned 451 Research global study, commissioned by Schneider Electric, 64% of customers thought that colocation will play a role in their data centre strategy during the next two to three years.

The study looked at the changes that are shaping new colocation approaches and competitive dynamics among providers and found that the threats and challenges providers face continue to intensify as they deal with an ever-changing set of buyers, evolving customer demands and a growing list of emerging technology such as the Internet of Things (IoT), next-generation edge computing and, in particular, cloud computing.
The report provides deep insights on what’s driving customers to colocation (CoLo) today, and what will attract them in the future to serve as guidance for CoLo providers as they make future business decisions and strive to set themselves apart from their competitors. Although conventional wisdom suggests that pricing is the biggest factor for CoLo buyers, the data found that 50% of customers said 24/7 security was extremely important when using a colocation provider, compared to 45% percent that said cost.
Latency and performance issues were the main reason customers moved apps from the cloud to a colo provider and the results showed that data centre infrastructure management (DCIM) was the one technology that could sway customers to use one provider over another. 
While enterprises continue to own and operate in-house datacentres, their use of colocation and other outsourcing services is growing fast. Demand for colocation and whole sale datacentres, with their readily available space and power, their professional operations teams and, increasingly, their rich connectivity and value-added offerings, has never been stronger. 451 Research forecasts that the operational square footage of the global colocation and wholesale sector will grow at a healthy 7% CAGR from 2017 to 2020.
This top-level data is comforting for the global ecosystem of datacentre suppliers and operators, yet a closer analysis points to significant disruption ahead. The customer mix is changing, with demand for colocation coming both from enterprises themselves and from those providers serving them. A provider of public cloud (IaaS), SaaS or platform as a service (PaaS) is just as likely to be leasing space inside a colocation datacentre today as a traditional enterprise.
The face of the colocation customer is changing as new types of decision-makers are playing a role in key colocation decisions. And customers’ workloads are also changing. The growing use of web-first applications, as well as the Internet of Things and other emerging edge computing trends, is creating new models for data access, processing, storage and networking. These changes are shaping new colocation approaches and new competitive dynamics among suppliers.
The shifting sands of the colocation landscape is part of a wider seismic change in IT that is largely being propelled by the rapid expansion of public cloud services. Demand for public clouds such as AWS, Azure and Google is exploding, making cloud the fastest-growing of all datacentre segments. The report projects a 16% CAGR of operational square footage for cloud datacentres from 2017 to 2020.
A complimentary copy of the report: Customer Insight: Future-proofing your colocation business, is available on line please click here.
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