Colocation Creates Opportunity Alongside New Business Challenges

  • Home
  • Colocation Creates Opportunity Alongside New Business Challenges

A new array of data center services are emerging to meet the shifting technological demands of the modern enterprise. A survey from Fortune found that 65 percent of CEOs consider the rapid pace of technological change to be among the top three or four challenges moving forward. On the whole, it was the "single biggest challenge" cited by the respondents, with increased regulatory pressure and cybersecurity also mentioned as common issues.

These areas of concern echo the findings of a landmark study from PricewaterhouseCoopers. The PwC study explored how businesses will change by 2020, and projected that organizations will face a constant wave of technological change as 53 percent of respondents went as far as to say new tech breakthroughs will completely transform how people work. The enterprise sector faces considerable struggles trying to keep pace with these demands, and colocation services are evolving to help companies keep up.

"Technological breakthroughs will be the most disruptive force affecting the enterprise."

Responding to a shifting business world
Approximately 53 percent of respondents to the PwC survey said that technological breakthroughs will be the most disruptive force affecting the enterprise between now and 2020. Alongside other factors, emerging technology models will create an operational climate in which global corporations take center stage among major businesses, creating a situation in which being able to scale based on talent and resource capabilities in any given region is critical. This environment will facilitate constant pressure for organizations to innovate in response to ever-shifting customer requirements.

A separate PwC study shows that this technological revolution is already underway in the human resources sector, a segment where digital innovation has been slow due to the need to handle sensitive, highly regulated data. According to the survey, approximately 44 percent of HR departments already use the cloud to support their day-to-day operations. Another 30 percent anticipate they will move to the cloud within the next three years and 59 percent believe there are performance management benefits that come with extending functionality out to mobile devices.

These figures, combined with the other PwC report detailing a changing work climate, highlight an increased reliance on emerging technologies. As organizations are forced to scale their technologies and innovate on a global scale, they need access to services that allow them to adapt while still maintaining control and ownership of their sensitive data. Colocation services can be a natural match here, as they can support a wide range of infrastructure models and empower organizations to expand their IT footprint across geographical boundaries without taking on the capital costs of data center construction.

Colocation rising
Data center colocation has evolved from a fairly static service model focused almost exclusively on connectivity and raw floor space to a flexible, adaptable solution that allows organizations to blend cloud, premise-based and legacy technology architectures under the same roof. A study from 451 Research predicted that the global colocation market will be valued at $33.2 billion by 2018 as the move to the cloud leads to greater demand for scalable, high-performance data center environments. Katie Broderick, research director for 451 Research, explained that colocation is emerging as the link between enterprise and cloud environments.

"Colocation is quickly becoming the nexus of both cloud and enterprise IT," said Broderick. "The colocation market is serving as datacenter arms dealer to both enterprises and the cloud. In this process, colocation is often becoming the strategic connection point between the two."

Colocation facilities can be uniquely equipped to help companies keep up with technological change driven by the cloud.Colocation facilities can be uniquely equipped to help companies keep up with technological change driven by the cloud.

Considering colocation's role as the enterprise's link to the cloud
Cloud computing has gained momentum in large part because it enables organizations to respond flexibly to changing technical requirements without having to take on significant capital costs in order to do so. Need to roll out a new app? Subscribe to it instead of rolling out servers and purchasing licenses. Have a sudden in-house development need? Deploy an application platform in the cloud instead of setting up a test environment. These cloud capabilities are driving change, especially as businesses "cloudify" their traditional IT architectures to incorporate virtualization, automation and scalability even when they don't create a full-on private cloud.

As technology continues to drive business change in coming years, major corporations could feel considerable pressure to balance those demands alongside strict and complex regulatory requirements, making them hesitant to take advantage of a traditional cloud environment. This is where colocation services come into play. By hosting private cloud and providing secure network links between data center locations, colocation facilities offer businesses an opportunity to incorporate a wide stable of cloud and non-cloud technology architectures into a common configuration that is secure and redundant, all without the design and construction costs that come with rolling out dedicated facilities across geographic locations.