Good News for Colocation Revenue Growth

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First, let’s talk about how these devices will drive collocation service revenues, which IHS Markit forecasts to grow from $23 million in 2017 to $32 million in 2021; a 40% increase over the same four-year period. Data center growth is correlated with general data growth. The more data transmitted via connected devices; the more data centers are needed to store, transfer, and analyze this data. In the specific case of the Internet of Things, there’s a need for geographically distributed data centers that can provide low-latency connections to certain connected devices. There are applications, like autonomous vehicles or virtual reality, which are going to require local data centers to manage much of the data processing required to operate. Most enterprises will not have the means or the business case to build new data centers in every nook and cranny of the globe, so they will need to turn to colocation data centers to provide quickly scale-able, low capital-intensive options for geographically distributed data centers.

IHS Markit forecast Internet connectable devices to grow from 27.5 billion in 2017 to 45.4 billion in 2021; a 65% increase in just four years. What does this mean for the colocation market? Well, it’s certainly a positive driver for colocation revenue growth; however, it’s not the 1:1 ratio many industry enthusiasts once thought. Second, it’s giving colocation service providers a new opportunity to assist with the aggregation and connectivity of new end-points and data sources.

The future of colocation hosting and cloud hosting services has an ever expanding demand with more devices we will need more hosting.

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