The Internet of Things: A Boom for Hosting

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Analyst Rachel Chalmers says the growth of web-connected devices will boost business for data center service providers. (Photo: Rich Miller)

LAS VEGAS – The “Internet of Things” will transform the hosting and data center industries, generating a tidal wave of data that will prompt companies to enlist third-party providers to help them manage it, according to analyst Rachel Chalmers.

Chalmers, who head the Infrastructure Computing for the Enterprise (ICE) practice for 451 Research, was the keynote speaker at the 451 Group’s Hosting and Cloud Transformation Summit in Las Vegas, and highlighted the resilience of the data center industry, as well as an immense opportunity opening in front of it.

Chalmers said data center service providers have experienced 20 percent annual growth, even as other sectors of the economy have faltered.

“As an industry, we’ve defied the global financial crisis,” said Chalmers. “It’s been difficult the past three years, but not for this industry.”

An ‘Inflection Point’ Ahead

Even greater opportunities lie ahead, said Chalmers, driven by the proliferation of Internet-enabled devices, known as the Internet of Things.

“There’s an inflection point coming that will dramatically raise the stakes and rewards,” said Chalmers. “Every single (enterprise) is in the process of redefining themselves as an information company. We believe hosting and managed services providers stand to be the main beneficiaries of this trend.”

The trend has begin in earnest with smartphones, but will accelerate as more devices and sensors become web-enabled and share data to help companies understand consumer behavior and business trends.

Mobile as a Precursor Market

“The Internet of mobile devices is already here,” said Chalmers. “There is a far bigger constellation of end points on the horizon. The numbers are poised to explode. We deeply believe that mobile is a precursor market for the Internet of things.”

The volume of data generated by all those devices will test the existing infrastructure for many enterprises, Chalmers said.

“You can bet your business that they will turn to third-party providers to help manage the Internet of Things,” she said. “On-premises infrastructure will not be able to cope with this massive influx of data. On-premises doesn’t go away, but gets augmented by cloud resources. This is not a zero-sum game. There’s going to be enough business out there for everyone.”

The Hosting and Cloud Transformation Summit continues today in Las Vegas.

About the Author

Rich Miller is the founder and editor-in-chief of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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3 Comments

  1. A down economy can sometimes benefit hosting. Especially when it comes to small & medium size businesses. More people tend to want to try opening their own businesses while minimizing their overhead.

  2. Bullseye! Rachel Chalmers nails it in a number of critical ways. 1. The planet IS already populated by billions of wireless internet connections. Most of them are attended devices (smartphones and feature phones). And those attended devices are in fact initiating and concluding what might be trillions of automated information transactions every year. Translation: Stuff is happening even when you are not pushing buttons. 2. Those automated transactions are the link with the Internet of Things, where tens of billions of unattended devices -- from home appliances to robotic security guards and all manner of sensors in between -- will have their own IP addresses, local security, storage, application services. They too will be initiating and concluding tens of trillions of transactions annually. 3. All that data needs indexing, archiving and retrieval support so that context can be defined and value created from the transaction driven by those devices. The question is: Will we develop and deploy Internet of Things solutions in ways that free us from those newly connected devices instead of further tethering us to them? After all, it is likely that the smartphone becomes our personal command and control platform for the constellation of unattended devices supporting (hopefully not dictating) our lives. The opportunity for the data center ecosystem in the Internet of Things is to play a larger role in helping us to define the greater value creation opportunities than we have realized to-date with the internet of smartphones. Chief among those opportunities: Helping more people live richer, more productive lines in the real world, even as they expand their digital networks.

  3. The simple truth is that cloud services are growing in adoption by companies in all sectors of industry and delivering positive results by those who use them.