The Building Blocks of Future Colocation Success

Greg Meyers, Marketing Manager at Vertiv

The demand for colocation data center services continues to grow among companies both large and small. The colocation providers that will succeed in attracting new  clients will need to offer more complex services, add more value to SLAs and provide stronger support for IT migrations.

That’s what the data from a recent survey of 226 U.S. enterprise data center managers revealed. The online survey was commissioned by Vertiv, formerly Emerson Network Power. The survey addressed organizations ranging in size from under $10 million to more than $1 billion in a wide range of businesses and educational concentrations.

Respondents indicated that as future IT application needs and deployments become more diverse, complex and business critical, they will seek out colocation providers that can:

• Quickly scale capacity when required
• Provide edge connectivity
• Offer price transparency.

More than 65 percent of respondents indicated that they are currently using colocation services or will do so within the next 12 months. Most current users are recent adopters; 64 percent said that they have used colos less than five years. Among these users, the survey showed general satisfaction, with more than 75 percent saying that they had not changed providers because expectations have largely been met. Those who have switched providers have done so largely because of cost and dissatisfaction with their providers’ ability to support scalability.

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Yet the opportunity to increase colocation business remains. More than half of the respondents indicated that they will increase colo and cloud hosting data center usage within the next two years. They’re looking for their colo provider to be nimble and able to quickly support capacity scalability, carrier diversity and shorter latency. They want a mix of colocation, cloud hosting and managed services, with security and competitive pricing.

In attracting new customers, colos would do well to understand and work to alleviate the concerns their customers may face. It’s likely that most colos have seen these concerns before, so their experience may help in dealing with such issues as the development of any new change management procedures, redeployment of IT personnel and any changes in security processes and compliance.

Smaller companies moving to colos reported that they were constrained more by staffing issues; they will likely continue to rely on outside IT consultants to help them choose colocation providers. On the other hand, larger companies were concerned more by the challenges of migrating cloud services and meeting compliance requirements.

Simplifying pricing models will also go a long way for colos to attract new prospects. Providers can demonstrate a high value by providing transparency in how they structure their service level agreements (SLAs) around power and capacity usage and how they monitor and meter usage.

To help colocation providers improve customer SLAs, innovations in data center power, cooling and infrastructure management can help them operate at peak performance. Colocation providers can leverage internal enhancements such as reduced operational costs, eliminating stranded power and cooling capacity, supporting scalability and providing greater insight into data center conditions and operations in their quest to add new clients.

Greg Myers is a Marketing Manager at Vertiv, focusing on Thermal Technologies, and Colocation services.