Colocation Grows as Enterprises Seek Capital Investment Reductions 

Deluxe company -

Analysts at Technavio are predicting that data center colocation providers in the United States will flourish over the next 4 years. In a newly released report, Technavio predicts that the compound adjusted growth rate (CAGR) of the data center colocation market in the United States will grow at 9% until year 2020.

One of the main drivers for the rapid growth in the server colocation market is due to the fact that businesses are actively looking for ways to reduce their capital investments. Rather than building out a new onsite datacenter facility, businesses large and small are seizing the opportunity to colocate their enterprise infrastructure while paying a predictable fee each month.

Since many enterprises require services to be available to their end users on a 24/7/365 basis, finding a colocation hosting vendor that offers a 100% Network Uptime Guarantee can be critical. Enterprises are looking to get the most for their money and data center colocation provides the infrastructure needed to guarantee the maximum uptime for critical services.

Other Factors Driving Data Center Colocation Growth

Datacentervscolocation (1) Technavio’s research concluded three other contributing factors for data center colocation growth in the US. These three factors are:

  • The Rapid Adoption of SaaS within the Enterprise
  • SMEs Relying More Upon Sophisticated Technology
  • The Need for Robust and Advanced Networking

As we dig deeper into each of these motivating drivers, it becomes clear that data center colocation may become the new normal in terms of how enterprises are building, maintaining and growing their technical infrastructures.

SaaS and Colo

When you say SaaS and Colo aloud, it may sound as if you are ordering an exotic drink. In ways, that may be a somewhat accurate analogy. As organizations integrate their systems into SaaS infrastructures, there is likely a need to have a robust connection to the enterprises core network, which would hosted in the colo facility.

If you are a SME, hosting your infrastructure in a colocated data center may provide better connectivity between your cloud hosted apps and your colo hosted data. When you consider the fact that you can dedicate up to a 1 Gbps connection to your servers, it becomes easy to see why organizations that require robust connectivity between their apps and data would put their core infrastructure in a colocated data center versus hosting it in an onsite data center.

SMEs and Sophisticated Tech

IMG_0126 | Deluxe company In just the past 10 years, Small to Medium Sized Enterprises (SMEs) have come to rely upon sophisticated technology in order to remain competitive with the major players within their respective markets.

Colocation gives businesses the ability to deploy their own specialized infrastructures within a facility that likely meets or exceeds their industries specific security requirements. Some organizations cannot afford to have infrastructure fail when end users are beginning to use their online products.

When SMEs begin deploying specialized technology in colocated data centers, they are doing so to gain an advantage on the competition by being able to maximize uptime for the services that they provide to their end users.

Robust and Advanced Networking

IMG_1892 | Deluxe company When organizations begin mapping out their services, things can become quickly convoluted. When infrastructure is placed within a colocated data center, organizations simply need to connect to the remote infrastructure in order to configure and deploy.

Since colocated data centers can guarantee a specific amount of bandwidth with a real, hard wired connection into your servers, your business can gain maximum throughput for the services that are being utilized the most.

As a result, organizations are increasingly choosing data center colocation over building their own data center. Many private data centers allow you to configure each rack with the exact types of networking infrastructure needed in order to achieve your organization’s core objectives.

Businesses get more for their money when they select data center colocation over investing in costly onsite data center facilities.


Jon Biloh
Jon Biloh

As president I'm responsible for developing and executing our global strategy, generating new business opportunities, enhancing the customer experience and ensuring that ColoCrossing provides world class service!