When it comes to the future demand for data centre colocation services, it would be easy to assume there’s a large elephant in the room – in the shape of a large cloud ready to consume all before it.  

From what we are seeing, however, alongside our cloud provider hosting services and in line with market forecasts, this is far from actual reality. The signs are that colocation can look forward to a vibrant long term market. CBRE, for example, recently reported 2019 was another record year of colocation market growth in the so-called FLAP (Frankfurt, London, Amsterdam, Paris) markets. There’s also a growing choice of high quality colocation facilities thriving in regional UK locations.

Perhaps more telling, however, amid all the excitement and market growth statistics surrounding cloud, some analysts are already predicting only about half of enterprise workloads will ultimately go into to it: best practice and business pressures will see most of the remaining share gradually moving from on-premise to colo – with only a minority remaining on-premise in the long term.

The case for colo

This is because a public cloud platform, while great for scalability, flexibility and ease of access, probably won’t totally satisfy all enterprise application and workload needs. Some will demand extremely high performance while others just need low-cost storage. And unless your own in-house data centre or hosting provider is directly connected to the cloud provider’s network infrastructure, latency is a consideration. This will impact on user experience as well as become a potential security risk. Then of course there’s the governance and security concerns around control of company data.

At the same time, there are serious engineering challenges and costs involved when running private cloud solutions on-premise. The initial set-up is one thing, but there’s also the ongoing support and maintenance involved. For critical services, providing 24 hour technical support can be a challenge.   

Sooner or later, therefore, enterprises will inevitably have to address the implications and risks of continuing to run servers in-house for storing and processing large volumes of data and applications.  Faced with solving the rising costs, complexities and security issues involved, many will turn to finding quality colocation facilities capable of supporting their considerable requirements – from housing servers for running day to day applications, legacy IT systems, and in some cases, mission-critical systems, and for hosting private or hybrid clouds. 

On the hunt

So where’s the elephant? Right now, the elephant is most likely residing in the board rooms of many enterprise businesses. However, the real-life issues and challenges associated with a ‘cloud or nothing’ approach will increasingly come to light and the novelty of instant ‘cloudification’ will wear off. CIOs will be once again able to see the wood for the trees. Many will identify numerous workloads that don’t go into cloud, and where the effort or cost of cloud is a barrier.  

This journey and eventual outcome is natural – an evolution rather than a sudden and dramatic revolution. It’s a logical process that enterprise organisations and CIOs need to go through, to finally achieve their optimum balance for highly effective, cost-efficient, secure, resilient, flexible and future-proofed computing. 

Nevertheless, CIOs shouldn’t assume that colocation will always be available immediately, exactly where they need it and at low cost. As the decade wears on, some colocation providers will probably need to close or completely upgrade smaller or power strapped facilities. Others will build totally new ones from the ground up. Only larger ones, especially those located in lower cost areas where real estate is significantly cheaper, may be capable of the economies of scale necessary for delivering affordable and future-proofed solutions for larger workload  requirements. Time is therefore of the essence for commencing the evaluation process for identifying potential colocation facilities.

In summary, the cloud is not going to consume colocation’s lunch. More likely, together, they will evolve as the most compelling proposition for managing almost all enterprise data processing, storage and applications requirements. They are complementary solutions rather than head to head competitors.

Interested in hearing industry leaders discuss subjects like this and sharing their experiences and use-cases? Attend the Cyber Security & Cloud Expo World Series with upcoming events in Silicon Valley, London and Amsterdam to learn more.