{"id":16686,"date":"2019-10-24T11:00:32","date_gmt":"2019-10-24T19:00:32","guid":{"rendered":"http:\/\/www.palada.net\/index.php\/2019\/10\/24\/news-10425\/"},"modified":"2019-10-24T11:00:32","modified_gmt":"2019-10-24T19:00:32","slug":"news-10425","status":"publish","type":"post","link":"http:\/\/www.palada.net\/index.php\/2019\/10\/24\/news-10425\/","title":{"rendered":"451 Research Expert Addresses Opportunities and Challenges in Colocation Data Center Market"},"content":{"rendered":"<p><strong>Credit to Author: Greg Jones| Date: Thu, 24 Oct 2019 15:00:00 +0000<\/strong><\/p>\n<p>The <a href=\"https:\/\/blog.schneider-electric.com\/co-location\/2018\/07\/03\/3-influencers-to-the-revolutionary-growth-in-demand-for-colocation-data-centers\/\" target=\"_blank\" rel=\"noopener noreferrer\">colocation data center<\/a> market demand is strong for the foreseeable future, but providers face resource and capacity challenges in regards to trends like artificial intelligence, the Internet of Things and climate change.<\/p>\n<p>That was the prominent takeaway from analyst speaking session \u2013 at this year\u2019s International Colocation Club \u2013 presented by Kelly Morgan, Vice President for Data Center Services at 451 Research. I always enjoy hearing from industry experts at these events \u2013 Morgan communicated a promising market outlook overall, but made clear colocation providers will have to deal with significant change with respect to both technology and customer expectations.<\/p>\n<p><iframe loading=\"lazy\" title=\"What\u2019s Next for the Colocation and Wholesale Data Center Business? | Schneider Electric\" width=\"100%\" height=\"420\" src=\"https:\/\/www.youtube.com\/embed\/xMikSm4o2f0?start=5&#038;feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen style=\"\"><\/iframe><\/p>\n<h2>Rosy Colocation Market Outlook<\/h2>\n<p>First, the good news. 451 Research is predicting steady growth in the global <a href=\"https:\/\/www.schneider-electric.com\/en\/work\/solutions\/for-business\/cloud-and-service-providers\/colocation.jsp\" target=\"_blank\" rel=\"noopener noreferrer\">colocation<\/a> market through 2029, averaging in the high single digits. Some regions will grow by larger percentages, including Asia Pacific and Latin America, which will be closer to 10%. The U.S. and Europe will grow by around 3% to 4% \u2013 in part because they\u2019re huge markets already.<\/p>\n<p>In large markets like Northern Virginia and Dallas, even low single-digit growth equates to a lot of data center space. The amount of space Northern Virginia adds in a single year is larger than the entire market for Portland, Ore. and other smaller cities, Morgan said.<\/p>\n<p>Another encouraging sign has to do with cloud, which Morgan says is still in early days. A lot of enterprises aren\u2019t yet using cloud at all. In fact, in Europe only about 20% of enterprises use cloud services. \u201cSo, there\u2019s still a huge amount of potential growth out there for cloud providers,\u201d she said.<\/p>\n<h2>Four Key Influences to the Data Center Market<\/h2>\n<p>Most of Morgan\u2019s presentation focused on the four key influences she says colocation providers will have to deal with in coming years.<\/p>\n<p>First is hybrid cloud, which she says enterprises have decided \u201cis the way it\u2019s going to be.\u201d Companies are using multiple cloud providers, mixing and matching on-premises and off, along with private cloud and hosted infrastructure. All of that will be a big driver for providers.<\/p>\n<p>\u201cIt\u2019s helpful for enterprises \u2013 although they don\u2019t realize this yet \u2013 to be in a colocation location where they can connect to multiple cloud providers and to hosted private cloud options,\u201d Morgan said. \u201cThat\u2019s going to be the way forward.\u201d<\/p>\n<p>Secondly, Artificial intelligence (AI) and machine learning (ML) are drivers for colocation services. 451 Research surveys show nearly 50% of companies are either already deploying AI\/ML applications or plan to in the coming year. \u201cThis is here,\u201d she says.<\/p>\n<p>The challenge is AI\/ML applications drive up rack density, which overall hasn\u2019t changed much in 10 years. Now, however, she says many companies have some racks of 30kW or more. \u201cThat is dramatic. We didn\u2019t see any of those 5 years ago.\u201d The challenge for colocation providers is that most racks will be in the 5kW to 10kW range, but they still have to deal with a room with 40kW racks. It\u2019s a phenomenon that will change the economics and incentives to invest in liquid cooling, which she says is becoming easier to work with. (That\u2019s not the only <a href=\"https:\/\/blog.se.com\/datacenter\/2018\/12\/13\/liquid-cooling-servers-data-center-design\/\" target=\"_blank\" rel=\"noopener noreferrer\">reason to consider liquid cooling<\/a>).<\/p>\n<p>Thirdly, Internet of Things (IoT) applications are also driving demand for colo facilities. Morgan\u2019s research indicates 70% to 75% of companies either already have or plan to implement IoT applications and around one-third said they will have to add storage capacity in the coming year to deal with it.<\/p>\n<p>Currently, around 80% of IoT data is on-premises, but customers expect that to flip within about 2 years, with 80% of IoT data moving to the cloud. That will have implications for where data center space is needed, driving demand for capacity in large cities and at the edge \u2013 both prime opportunities for colocation providers.<\/p>\n<p>The final influencer is environmental changes. Some areas are getting hotter and others cooler, flood zones are being redefined and the risk of fire is all too real in some areas, notably in California.<\/p>\n<p>\u201cAs you get more unpredictability, enterprise interest in outsourcing this risk goes up,\u201d Morgan said. After Hurricane Sandy hit New York a few years ago, there was a rush among companies there to outsource data centers to colocation providers both outside and within the region. It\u2019s a situation that presents a lot of potential for colocation providers to explain their value proposition to potential customers.<\/p>\n<h2>Final Takeaway \u2013 Level-up on Solutions and Innovation<\/h2>\n<p>In her parting thoughts, Morgan summed up the opportunity and challenges facing the colocation industry. While demand is expected to stay strong, those that fare best will be the companies that deliver solutions to customers, not just products.<\/p>\n<p>Some, she said, are starting to call data centers \u201cinvisible infrastructure.\u201d Like electricity, she said, \u201cpeople want it to just work\u2026 If you can make sure firms don\u2019t have to think about you, that\u2019s a big advantage\u201d and a differentiator, she said.<\/p>\n<p>At the same time, it\u2019s important to be innovative in areas like renewable energy and with edge deployments, such as with modular micro data centers. Innovative cooling strategies will also be important as AI and ML continue to take hold, increasing data center density.<\/p>\n<h2>What\u2019s Next for the Colocation Data Center Market?<\/h2>\n<p>For me, Morgan\u2019s overview was like a vote of confidence in the work Schneider Electric has been doing to address all of these challenges, from our <a href=\"https:\/\/www.schneider-electric.com\/en\/product-category\/7550-prefabricated-data-center-modules\/\" target=\"_blank\" rel=\"noopener noreferrer\">modular data centers<\/a> to innovative <a href=\"https:\/\/www.schneider-electric.com\/en\/work\/products\/product-launch\/uniflair\/index.jsp;\" target=\"_blank\" rel=\"noopener noreferrer\">new cooling solutions<\/a>, including water-based systems. Watch her presentation, <a href=\"https:\/\/www.youtube.com\/watch?v=xMikSm4o2f0&amp;feature=youtu.be\" target=\"_blank\" rel=\"noopener noreferrer\">What\u2019s Next for the Colocation and Wholesale Data Center Business?<\/a>, for yourself to hear more about the challenges that lay ahead, but also the opportunities to grow your colocation business.<\/p>\n<p>The post <a rel=\"nofollow\" href=\"https:\/\/blog.se.com\/co-location\/2019\/10\/24\/451-research-opportunities-challenges-colocation-data-center-market\/\">451 Research Expert Addresses Opportunities and Challenges in Colocation Data Center Market<\/a> appeared first on <a rel=\"nofollow\" href=\"https:\/\/blog.se.com\">Schneider Electric Blog<\/a>.<\/p>\n<p><a href=\"https:\/\/blog.se.com\/co-location\/2019\/10\/24\/451-research-opportunities-challenges-colocation-data-center-market\/\" target=\"bwo\" >http:\/\/blog.schneider-electric.com\/feed\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong>Credit to Author: Greg Jones| Date: Thu, 24 Oct 2019 15:00:00 +0000<\/strong><\/p>\n<p>The colocation data center market demand is strong for the foreseeable future, but providers face resource and capacity challenges in regards to trends like artificial intelligence, the Internet of Things&#8230;  <a href=\"https:\/\/blog.se.com\/co-location\/2019\/10\/24\/451-research-opportunities-challenges-colocation-data-center-market\/\" title=\"Read451 Research Expert Addresses Opportunities and Challenges in Colocation Data Center Market\">Read more &#187;<\/a><\/p>\n<p>The post <a rel=\"nofollow\" href=\"https:\/\/blog.se.com\/co-location\/2019\/10\/24\/451-research-opportunities-challenges-colocation-data-center-market\/\">451 Research Expert Addresses Opportunities and Challenges in Colocation Data Center Market<\/a> appeared first on <a rel=\"nofollow\" href=\"https:\/\/blog.se.com\">Schneider Electric Blog<\/a>.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"colormag_page_container_layout":"default_layout","colormag_page_sidebar_layout":"default_layout","footnotes":""},"categories":[12389,12388],"tags":[12559,12390,17295,12391,12478,23274,14298],"class_list":["post-16686","post","type-post","status-publish","format-standard","hentry","category-scadaics","category-schneider","tag-451-research","tag-colocation","tag-colocation-data-center","tag-data-center","tag-data-center-cooling","tag-kelly-morgan","tag-modular-data-center"],"_links":{"self":[{"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/posts\/16686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/comments?post=16686"}],"version-history":[{"count":0,"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/posts\/16686\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/media?parent=16686"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/categories?post=16686"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.palada.net\/index.php\/wp-json\/wp\/v2\/tags?post=16686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}