The data center colocation market is booming and growth in this sector is contributing to the expansion of data center construction around the world. A recent Infiniti Research Limited study found that data center construction is set to increase substantially around the world, with a variety of industry conditions pushing that growth. Colocation is among the primary drivers in this segment, but the move to modular, containerized data centers is also changing the way construction takes place and potentially having an adverse impact on revenue opportunities.
Looking closely at data center construction patterns
The study predicted that the data center construction sector will expand at a compound annual growth rate of 21.99 percent for the period of 2013 to 2018, creating considerable revenue opportunities across the industry as a whole. This growth comes in large part due to increased demand for colocation services, as many businesses are turning to the service model for a wide variety of reasons. Energy efficiency is another key motivating point pushing new data center construction.
Sustainability is a priority across the data center industry as heightened regulatory standards, rising power costs and a variety of other industry factors push companies to engage in practices that support energy efficiency in the data center. The study found that many of the conditions in the data center construction sector currently favor sustainability as a major motivating point behind new initiatives. As such, much of the construction happening in the sector is occurring with energy efficiency in mind.
Containerized data centers do pose a challenge across the sector. In theory, a modular facility will be more flexible and scalable. Such data centers also require fewer resources from a construction perspective and are much less expensive. As such, containerization in the data center market could lead to lower revenues in the construction sector.
What all of this means for companies considering colocation
Increased construction, and the industry conditions driving this trend, are good news to businesses that may want to partner with a colocation provider. More construction in the colocation industry generally correlates to increases in available space and competition. This often means that organizations trying to leverage colocation services can either end up getting lower costs or be able to take advantage of advanced services that vendors are making available. As competition increases in colocation, many providers will strive to differentiate themselves from competitors, creating an opportune time for purchasing.
Furthermore, energy efficiency is among the most substantial drivers of data center construction, and colocation vendors have a major edge in being able to offer sustainable services. Many companies building their own facilities end up struggling to find the capital resources needed to implement energy-efficient solutions because the cost of advanced power generation, distribution and management tools. Colocation providers have a major edge in this area and can often afford to build incredibly efficient data centers to host client infrastructure.
The end result of this construction environment is a situation in which businesses can leverage cost-efficient, high-performance and sustainable data center facilities through colocation plans. At the same time, modular data center design also offers incredible potential for flexibility.
Some colocation providers have begun working to implement containerized data center architectures in some of their facilities to improve scalability. A modular data center is generally much easier to expand and adjust over time, making it an ideal option when organizations need to alter capacity capabilities to meet client demands. This flexibility is a major asset for many colocation customers, especially those that expect to expand their IT capabilities in the near future.
Significant growth is on the horizon in the data center construction sector, and many of the developments in this industry point to the value of colocation.