Data Center

Colocation Gains Traction in the Enterprise Sector, Heavy Reading Reports

NEW YORK -- As enterprises rethink their IT deployments, they will turn to third-party colocation providers for relief and push the market value to $36 billion worldwide by 2017, according to the latest report from Heavy Reading Insider (www.heavyreading.com/insider), a subscription research service from Heavy Reading (www.heavyreading.com).

Colocation Looks Enticing to Enterprises Weary of IT Woes examines the market for colocation centers, analyzing their attributes, the impact of virtualization on colocation, strongest drivers in the market and challenges the industry faces. It also includes a comparative breakdown of colocation centers. Finally, it examines the geographic landscape of the market and details trends that are likely to occur in the industry over the next 18-24 months.

For a complete list of companies covered in this report, please click here.

"According to some estimates, the colocation market – which currently is estimated at around $23 billion in annualized revenue – will reach $36 billion worldwide by 2017," says Denise Culver, contributing analyst with Heavy Reading Insider and author of the report. "Interestingly, many believe that the colocation market will remain fragmented, with the majority of revenue – about 75 percent – being derived from local providers with less than $500 million in annualized revenue."

Enterprise customers are rethinking their internal IT deployments and increasingly looking to third-party colocation providers to meet their infrastructure needs rather than building themselves, Culver says. "Finding space in a colocation center with optimal connectivity options gives an enterprise the advantages of exceptional service level agreements (SLAs) and having data secured offsite, providing organizations with added levels of risk management and the chance to invest in better equipment and state-of-the-art servers," she continues. "Colocation space, power, bandwidth and connection speeds can be increased where required to ensure that all sizes of enterprises can be addressed."

Key findings of Colocation Looks Enticing to Enterprises Weary of IT Woes include the following:

  • All but one of the eight companies in the report rated the emergence of cloud services as affecting their business as either severe or moderate.
  • Colocation centers that provide best-of-breed network connectivity and cloud services that are consolidated and easy to use will provide a significant driver for enterprises to adopt colocation services.
  • One challenge the industry faces is the threat of larger corporations and content providers building out their own infrastructure, as opposed to going with a colocation solution.
  • A trend expected is a migration to hybrid cloud strategies that will increase demand for customer infrastructure build-outs, as well as private connections to the public cloud.

    Colocation Looks Enticing to Enterprises Weary of IT Woes is available as part of an annual single-user subscription (12 issues) to Heavy Reading Insider, priced at $1,995. Individual reports are available for $595 (single-user license).

    To subscribe, or for more information, please visit: www.heavyreading.com/insider. For more information about other Heavy Reading Insider research services, please visit: www.heavyreading.com/research.

    Heavy Reading

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