Insight and analysis on the data center space from industry thought leaders.

Colocation Communities Are a Match for Cloud

Today’s information explosion is proof enough that data is the lifeblood of any business and, therefore, how it’s contained is a top concern. As more enterprises put their internal servers under scrutiny, they are noticing that legacy enterprise data centers are becoming increasingly ineffective, writes Kevin Dean of Interxion. Colocations options to migrate to "communities of interest" are growing.

Industry Perspectives

March 25, 2013

5 Min Read
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Kevin Dean is Chief Marketing Officer at Interxion




The number of data centers may be shrinking, but their capacity is growing. Current market calculations show disruptive technologies like server virtualization and cloud computing are effectively consolidating servers enough to actually shrink the United States’ vast data center footprint. In fact, IDC predicts that the total number of U.S. data centers will fall from 2.94 million in 2012 to 2.89 million in 2016. However, while new data center facilities themselves may be on the decline, the data they house certainly isn’t, given that 2.5 quintillion bytes of data are created every day.

With fewer facilities, but more data than ever, what can companies do?

While the shift to more virtualized and cloud-based environments means that companies will build fewer data centers overall, it also means many will look to specialized, third-party data centers to support their data-intensive needs. Further predictions from IDC reveal that data center capacity will grow from 611.4 million square feet in 2012 to more than 700 million square feet in 2016, so colocation facilities that have the capacity to handle cloud and virtualization requirements are well suited to support this data boom.

Statistics aside, today’s information explosion is proof enough that data is the lifeblood of any business and, therefore, how it’s contained is a top concern. As more enterprises put their internal servers under scrutiny, they are noticing that legacy enterprise data centers are becoming increasingly ineffective, no longer able to provide the space, power and security requirements necessary to support a company’s transition to the cloud. As a result, companies are optimizing their data through outsourcing options, such as data center colocation facilities. By choosing to colocate, enterprises benefit from a wide range of power connections with full backup, multi-layer security to protect data, lower maintenance expenses and more cost-effective cooling.

Beyond these colocation benefits, however, one big advantage remains: communities of interest. These communities located within such colocation facilities are one of the biggest draws for companies to choose colocation in the first place. For instance, cloud communities offered by carrier-neutral colocation providers allow service providers across cloud markets to scale their resources and match fluctuating customer requests. Similarly, businesses that are part of communities of interest within finance and digital media content hubs benefit from colocation facilities’ interconnection with leading cloud platforms, which enable community members to take advantage of cloud computing and its cost efficiencies.

Cloud Communities Make Gains

Cloud service providers in particular benefit from multi-tenant colocation facilities’ communities, which enable members to connect with each other and with partners over near-instantaneous connections. The traditional selection criteria for data center facilities such as power, space, security and cooling capacity are now topped by the requirements of close proximity to end users with unbeatable connectivity and performance speeds – speeds that are achieved in such highly-connected industry hubs. Since these hubs host a variety of service providers, CDNs, carriers and ISPs and Internet exchanges under one roof, enterprises and cloud service providers have access to a marketplace of a variety of cloud-based services at their fingertips.

Additionally, cloud hub participants benefit from partnership opportunities and additional revenue streams made possible through member interaction.  Furthermore, as the market shifts to more dynamic, hybrid cloud environments, the connectivity between private infrastructure and public cloud servers is more essential now than ever before. To ensure that these connections are performing as fast as possible for their customers, many colocation participants have the ability to establish private connectivity between a public cloud platform and their existing dedicated IT infrastructure. This interconnectivity allows members to take control over their hybrid environment while reducing network costs, increasing bandwidth and providing a more consistent network experience than Internet-based connections.

The Rise of a Financial Cloud

Like cloud service providers, financial services firms are also adopting cloud models within third-party data centers for better content distribution and storage, among other benefits. For instance, hedge funds, private equity firms and high frequency trading (HFT) firms are colocating their private clouds inside colocation facilities to take advantage of cloud computing’s flexibility, speed to market, and cost efficiencies. Participants within such financial hubs benefit from on-demand access to market data feeds, managed services and technology solutions through data center cross-connects. Community members also leverage cloud services to meet compliance and data protection requirements. With some financial services firms also now turning to the Amazon cloud for certain application deployments, they will undoubtedly rely on the interconnectivity to public platforms already provided by colocation facilities to meet the demands of low-latency trading and other business-critical applications.

Media Migrates to Cloud-Based Platforms

Digital media companies are also turning to colocation facilities to leverage a shared platform for their cloud applications. Media services companies that prioritize live streaming, premium content at 100 percent availability 24/7 realize the benefits a cloud model provides in terms of its processing power and real-time data analysis. Since enterprise data centers lack the power, space, cooling and interconnectivity to support cloud applications, content owners and distributors increasingly outsource their private cloud to third-party data centers, where they can benefit from close proximity to the top CDNs, Tier 1 access networks and Internet exchanges. And, with more media companies transitioning to cloud-based digital platforms, the industry as a whole will become more accepting of a hybrid or open approach, with colocation facilities fully equipped to meet these future cloud demands.

As companies continue to migrate to the cloud, they are realizing how much of a hindrance to innovation enterprise data centers really are. Across all verticals, companies are shifting away from wasting time and money with hardware refreshes, operating system patches and paying for power and space. The consolidation of the data center market is seeing more companies turning to third-party facilities to combat legacy IT’s limitations and deploy their cloud environments. Driven largely by content communities across industries, colocation facilities allow enterprises to take control of their cloud destiny while the technology is still at its early stages of evolution. As enterprises continue to create strategic roadmaps into computing on-demand models, they will increasingly look to leverage third-party facilities that encourage innovation, meet current cloud demands and continue to open the door for future opportunities.

Industry Perspectives is a content channel at Data Center Knowledge highlighting thought leadership in the data center arena. See our guidelines and submission process for information on participating. View previously published Industry Perspectives in our Knowledge Library.

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