Datacenter Consolidation And The Impact Of Colocation
Historically, the datacenter space has been highly fragmented, with multiple smaller players having their own technology, geographical or network advantages. Globally diversified organizations would often partner with different datacenters for their colocation needs, in different parts of the world. This fragmented ecosystem created a number of challenges: Resource Challenges: Typical large organizations, driven by legacy processes, would often need to manage separate engineering, IT support and vendor relationship personnel across different geographies Process Challenges: Information security and governance mechanisms would need to be realigned, depending of specific geography, datacenter and vendor needs Integration Challenges: Network, storage and compute resources often vary from one vendor to another, making data and system integration between different hosting service providers difficult With business agility becoming a strategic need, using a fragmented set of hosting service providers creates significant challenges in responding to changing market
needs. This greatly limits organizations’ ability to compete. Companies may look to consolidate to mend the fragmentation of their hosting service providers and compete at a higher level.
DATACENTER CONSOLIDATION: BENEFITS FOR COLOCATION
According to the Global Data Center UPS Market 20172021 report, datacenter consolidation is expected to lower costs by 30%, reduce power consumption by 55%. Organizations looking at colocation services stand to benefit greatly from datacenter consolidation.
Service Quality & Consistency: There has been a significant growth in big data, consumer devices, mobile apps and analytics technologies, that leverage legacy applications (on-premise, hosted or collocated infrastructure) as well as cloud (infrastructure, platforms and services). By consolidating data centers and service providers, organizations can leverage a single vendor relationship and enjoy a uniform quality of service across all resources.
Stronger Security & Governance: Having a unified service provider for colocation needs across the world allows organizations to create uniform, global policies for data access, user roles and data governance. Having a common human / system interface for all colo- cation needs across the world, allows companies to better track utilization, costs and operational efficiencies.
Managed Services: Datacenter consolidation also significantly minimizes IT complexity in terms of design, architecture, engineering, integration, testing, support and maintenance. This allows colocation service providers to offer end-to-end managed services with pre-defined SLAs.
With the focus on cost reduction, industry leadership and world- class service quality, the datacenter industry is quickly consolidating. The last year saw a significant number of M& A deals in the colocation and datacenter space, notably by companies such as NTT Communications, Equinix, Iron Mountain and Digital Realty. With increasing competition, dynamic scalability needs and rising cost pressures, the industry is expected to see further consolidation in 2018. Over the next few years, we can expect a significant change in the way colocation services are delivered and managed.