The Nemertes Research Group estimates that colocation demand in the US is expected to grow by 15-20% per year through 2016. This is fuelled by the increased growth in the digital economy. The exponential growth predictions for e-commerce, online video, cloud computing, financial trading, and mobile data foreshadow growth in the use of IP and Internet infrastructure.
Case in point: big data is growing by 5 exabytes every 2 days. From the dawn of civilization until 2003, mankind created 5 exabytes (5.350 billion gigabytes) of information, and Google CEO Eric Schmidt stated that much information is created every 2 days. Experts debate the accuracy of that number, but the point is clear: information growth is skyrocketing and so is the demand for colocation services.
Drivers of Growth
Cisco estimates a 30-40% growth in IP traffic. This growth in tandem with a trend to reduce infrastructure is driving growth in colocation solutiions as one of the solutions to this issue.
Cloud computing, virtualization and mobility demand massive amounts of data center resources, and the network systems necessary to support them can be staggering. Data Colocation Centers enable companies to expand their data center and have access to sophisticated systems, while they minimize their costs and IT infrastructure.
Nemertes also predicts a shortage in colocation facilities starting in 2013 and growing to a $1.9 billion gap by 2015. This came out of an assessment of the growth in supply being outstripped by the growth in demand. Colocation facilities are filling faster than they are able to provide space.
Worldwide Trends
IDC in Europe predicts a similar trend with even the largest of companies who traditionally operate in-house reaching out to alternatives including colocation providers. In Europe, 10% of companies use colocation services.
In the US, the percentage of companies using colocation is expected to rise from 31% to 35% by 2015 (according to Channel Partners).
In Asia’s fast growing economy, demand for colocation is expected to rise by 40% per year through 2016 (according to Data Center Dynamics), as companies in growth seek to reach past the crowded state-owned bandwidth.
Why Choose Colocation?
With all this positive activity in the marketplace why should you choose colocation for your network needs and internet services?
Increased uptime
Lower costs of space and power in most cases
Reduced bandwidth costs
Faster network speeds
Reduced infrastructure costs could offset cost to colocate
Physical security for data and hardware
24/7/365 secure access
Disaster recovery is immediate allowing business to continue uninterrupted
Backup power systems in place to ensure continuous service.
Colocation providers may monitor your systems and troubleshoot when necessary
Off site back ups
Latest generation equipment
Virtually On demand Scalability
This list is only the beginning of why the market is growing in leaps and bounds – and this growth is expected to continue into 2016. Colocation centers provide efficiency, agility, reliability and cost-effective IT.
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This guest article was written by Kristin Herring, VP of Marketing for CoreXchange based in Dallas, TX. CoreXchange is a full-service provider of data center colocation services and advanced networking solutions.