Four Data Center Colocation Trends to Watch in 2019

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Colocation providers expect to reel in a lot more enterprise business in 2019, as enterprises rethink infrastructure and retool, getting rid of as much on-premises data center space as they can, replacing it with cloud services and – when necessary – modern colocation facilities.

As Clint Heiden, chief revenue officer at QTS, explained, enterprises in healthcare, financial, manufacturing, and other industries that built their own data centers about a decade ago are now realizing it can cost hundreds of millions of dollars to get those facilities up to modern standards.

They’re also realizing that they need a lot less data center space for the same infrastructure, “making a refresh very cost-prohibitive,” he added. Increasingly, they’re turning to colocation as the alternative, where they can both get up-to-date infrastructure and access to cloud providers, often at a lower cost than keeping everything in-house.

To make themselves more useful to these companies, many colocation data center operators have been building digital tools to create a user experience and functionality that feels a lot like public cloud. The core principles here are abstraction of the physical, automation, microservices, APIs, easy software-based provisioning, and unified management of different types of infrastructure, be it cloud, colo, or on-prem.

Being able to manage a mix of infrastructure is a crucial component for these platforms. Hybrid cloud is on the rise – a trend highlighted by the amount of hybrid cloud products and features hyperscale platforms rolled out this year – and colo companies are positioning themselves as the place where private, customer-controlled infrastructure meets public cloud.

Colocation providers are also starting to look for ways they can help customers get their application infrastructure physically closer to end users, both to improve performance and to tame network bandwidth costs.

Hyperscale cloud data centers dominated the conversation this year, James Leach, VP of marketing at RagingWire Data Centers, told us. But the year has also seen some of the first ever deployments of edge computing infrastructure at wireless towers. “How about a new data center architecture that combines hyperscale and edge to create ‘hedge’ data centers?” he said.

Data Center Knowledge recently surveyed numerous executives from the leading data center colocation providers about their expectations for the industry in 2019, and four trends emerged. Here they are, along with some select quotes from the execs:

Colocation That Feels Like Cloud

  • Mike Fuhrman, Chief Product Officer, Flexential: “The days of manual ordering and provisioning will fade quickly.”
  • Clint Heiden, Chief Revenue Officer, QTS: “Infrastructure – colocation in particular – will be differentiated by software-driven visibility and control, and API-capable orchestration platforms built on microservices architectures, enabling unprecedented visibility, access, and control across entire IT environments.”
  • Steve Smith, Chief Revenue Officer, CoreSite: “As enterprises become more sophisticated in leveraging multi-cloud platforms, demands will increase around API functionality, capacity management, and service provider availability on those platforms.”
  • Bill Long, VP of Interconnection Services, Equinix: “In 2019, we foresee the development of a wide range of virtual devices for network optimization, security, management, and monitoring to address many of the concerns enterprises wrestle with when expanding and managing distributed IT infrastructures.”

The Colo: Where Hybrid Cloud Happens

  • Rick Moore, Director of Global Cloud Services, Digital Realty: “Most organizations in 2019 will realize that not everything belongs in the cloud and that achieving a proper mix of on-premises and cloud-resident workloads and infrastructure will be the only way to ensure optimal workplace performance and operational efficiency.”
  • John Gould, Executive VP and Chief Commercial Officer, CyrusOne: “A growing trend in 2019 will be the deployment of hybrid cloud strategies, whereby IT departments classify different workloads as public cloud-viable and private cloud-appropriate.”
  • Mike Fuhrman, Chief Product Officer, Flexential: “As more enterprises execute a multi-cloud deployment strategy, they will choose to make their colocation footprint the centerpiece of that strategy.”
  • Clint Heiden, Chief Revenue Officer, QTS: “In 2019, the most successful colocation providers will specialize in flexible hybrid solutions encompassing colocation and public and private cloud, with the ability easily port spends between all.”
  • Wylie Nelson, VP, Product and Land Acquisition, EdgeCore: “The easier and more powerful the hybrid cloud solution looks, the more enterprises will flock to it, which is why it’ll be a main battleground for today’s cloud providers.”

Enterprises Lease More Colo Space

  • Bill Long, VP of Interconnection Services, Equinix: “Colocation helps enterprises optimize their hybrid/multi-cloud application workflows by placing traffic exchange points close to users and clouds.”
  • Clint Heiden, Chief Revenue Officer, QTS: “Organizations are now exiting their on-premise data centers opting instead to outsource to new software-defined data centers that offer the same acces and control at a fraction of the price of ownership allowing them to focus on their core business.”
  • Mike Fuhrman, Chief Product Officer, Flexential: “Colocation providers will continue expansion activities to bring online larger, network-enabled footprints to accommodate these workloads.”

The Edge Takes On a Bigger Role

  • Bill Long, VP of Interconnection Services, Equinix: “Businesses are figuring out that distributing their infrastructure to the edge and interconnecting to digital supply chains locally can improve performance, decrease cost and provide agility to react toevolving business needs.”
  • James Leach, VP of Marketing, RagingWire Data Centers: “In 2019, look for colocation products that attempt to seamlessly integrate hyperscale and edge data centers to support new applications for AI, Internet of Things, autonomous vehicles, big data, etc.”

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