Colocation Trends — 2018
According to recent research from Gartner, the global colocation market is expected to double by 2020 to $50B. MarketsandMarkets.com anticipates a compound annual growth rate (CAGR) of 14% annually through 2022.
Often called the future of data center design, colocation encompasses every level of data center infrastructure, including enclosures, power, cooling, cable management, monitoring, and security. Because these infrastructure assets require significant staff and capital investments, small- and medium-sized enterprises (SMEs) are expected to move into colocation services at the highest rate in the forecast period.
Colocation providers lease buildings for IT infrastructure to client companies. Meanwhile, the client companies are free to implement and manage hardware and software assets themselves. And signing a 3- to 5-year lease can easily be seen as a more attractive option than taking on a 15- to 20-year capital expense investment to acquire or upgrade a building. But as new IT technology emerges, and the demand for data center resources grows, how will the colocation industry evolve?
Here are four ways that technological trends will shape colocation providers in the coming years:
- Hyperconvergence and agility maintenance. As data architecture moves towards hyperconvergence, companies are turning to hybrid colocation models that integrate cloud computing and data storage to meet seasonal and test development challenges without larger fixed costs.
Hyperconverged hardware can handle storage, networking, and computational functions normally handled by separate rack appliances. Hardware consolidation makes it easier to manage nodes and scale per task; easier to deploy virtual environments; and allows for increased computational density per rack. These benefits result in convenience and time savings in the form of quicker installation and implementation. Another advantage is a reduced hardware footprint.
But as hyperconverged solutions become more popular, colocation providers must build or upgrade their facilities to be robust. Rack weight becomes a real issue — increased component density on modern hyperconverged hardware plus cooling and uninterrupted power supply (UPS) system apparatus can make total rack weight push towards 3,000 lbs. To succeed, colocation companies must upgrade components to address power and cooling concerns of hyperconverged boxes.
- Managing thermal loads. Growth and scalability comes at a cost. As businesses lean on colocation facilities to meet growing data stockpile and enterprise challenges, more equipment is concentrated into existing footprints. This can lead to significant thermal management issues, and potentially catastrophic failure, downtime, and lost business revenue. There is no room for error, and the cost of downtime can cost as much as $9,000 per minute.
While most businesses don’t understand the value of thermal management, they do understand the cost of service failure. In most data center environments, a hot aisle/cold aisle solution can mitigate a thermal load in its current configuration, but as businesses add more equipment to their colocation footprint, temperatures may spike and create a high-density zone. Therefore, aisle containment may not be sufficient.
One option for businesses looking to maximize equipment in their enclosure is a climate control system that can operate in a closed loop cooling environment. An in-rack closed loop cooling solution may be the best choice to ensure maximum regulation and protection for the network components.
It’s important for businesses to realize that as data technology evolves, so do the power loads of the data systems. And with power comes heat. So, a 5 kW cooling solution now needs to handle more than 15 kW in the same footprint and with the same cooling system. It’s easy to understand why choosing the right cooling system is so critical from the beginning.
It is also important for colocation customers to know that ASHRAE TC 9.9 standards have allowed facility managers to increase operating temperatures and adjust humidity ranges to save energy. This can increase temperatures in-row and inside the enclosure. Temperature spikes beyond the healthy range can compromise critical operating infrastructure at best, or cause a system meltdown at worst — potentially leaving critical information unrecoverable.
- Scalability and modularity. Businesses looking to implement their own solution at colocation facilities are often challenged with product complexity and interoperability issues. From cabinets, to power, cooling, and security, Tier 1 customers are overwhelmed with vendors, manufacturers, and resellers. Manufacturers and colocation providers are helping by reducing complexity and implementation cost through turnkey, pre-configured colocation infrastructure solutions.
Design, build, and maintenance time at the colocation facility adds costs to businesses implementing cage solutions. For smaller customers who are leasing equipment these costs are passed along in the pricing plan and tiered service contracts. A reduction of time in building and maintaining cabinets is passed along directly to customers through competitive pricing structures and improved scalability.
- Internet of Things (IoT) and Big Data: The main driver for additional IT infrastructure for companies is the explosive growth in data generated by enterprise business operations, research and development, and Industry 4.0 manufacturing processes. According to IDC Research, digital data will grow at a CAGR of 42% through 2020. Since it’s far easier to produce terabytes, petabytes, or exabytes of data than it is to store it, production is far outstripping capacity. This drives businesses to offload data to the cloud or colocation facilities.
Colocation can serve the needs of large enterprises and SMEs by providing scalability, risk mitigation, additional layers of physical security, and a larger pipeline to handle the expanding data stockpile.
As colocation experiences a CAGR of 14% over the next decade, technology will need to expand to handle the storage, not just the production of data. Colocation facilities must scale to meet demand while handling higher thermal loads and lowering energy usage. And they must maintain a distinct competitive advantage through turnkey, ship loadable solutions that lower maintenance costs, and deliver quicker turnarounds to meet aggressive customer timelines. The key to riding the wave of success will be the ability of colocation companies to meet these challenges in the very near future.