“The Cloud,” also known as “Other People’s Computers” seems to put a stake in the heart of the idea of colocation, where instead of renting both the hardware and the space, you only rent the space and you supply your own hardware.
But it doesn’t. It’s like saying, “Why rent a house when you could buy one?” Well, lots of reasons — and the same is true for colocation vs. cloud.
Wholesale Colocation Gaining Steam
Right now the biggest market for colocation is in wholesale markets. From 2016-2017, analysts predict a growth rate of 17.9 percent.
Hyperscale giants like Microsoft and Facebook are simply leasing data centers wherever they need one. This gives them the control over the infrastructure at the point they need it, and releases them from having to construct and maintain a data center. This sort of flexible solution can be ideal for many large-scale organizations.
Retail Colocation Holding Steady
Retail colocation is still 75 percent of the market, with a very respectable projected growth of 14.3 percent. So it’s not going away by any means. But most of the growth is with companies that maintain multi-regional presence.
Colocation remains a critical element of hybrid cloud installations, so that is also an important market segment, though less visible.
What About the Cloud?
The cloud vs colo debate is emblematic of a the sharing economy theory, that people will use only what they need, when they need it. That kind of thinking is what’s bleeding over when the question is raised “what’s the future of colocation?” Some organizations will always require ownership of the hardware, whether for reasons of pragmatism, security, or risk-management. For that matter, there will always be a few private data centers too, even though leasing is much more attractive.
But this ‘sharing economy mindset’ is also a great one because it introduces a certain flexibility of thought as to whether ownership of the hardware is desirable or necessary, in what configurations, and for what applications.
Tackling this question is an important exercise, and one that serves companies well in the ever shifting IT landscape. Examining all your options, including colocation, should be the first step in any potential infrastructure overhaul.
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