The key benefits of colocation – a market ripe for growth

SCC Data Centre
SCC Data Centre, Birmingham

Colocation, the practice of housing privately-owned servers and networking equipment in a third-party data centre, has increasingly become an effective means for companies looking to scale their data centres. According to a BCC Research report the industry is forecasted to grow in size to $54.8 billion by 2020, with an expected compound annual growth rate of 15.4% from 2016 – 2020. The growing digitisation of information has led to vast amounts of data being produced, with companies being required to manage increasingly large servers. Instead of keeping these servers in-house, in offices or at a private data centre, companies can choose to ‘co-locate’ their equipment by renting space in a colocation centre. Unlike other kinds of hosting, where customers can rent space on a server owned by a hosting provider, with colocation the customer already owns the server and rents the required physical space to house it within a data centre. One of the biggest benefits is the saving on capital expenditure. To build a second data centre or refurbish an existing data centre/ computer room, can require significant capital investment, while colocation provides the opportunity to rent extra space turning a potentially large investment budget into a significantly smaller operations budget. In addition, budgets can be spent on ensuring that the latest hardware is purchased, providing better IT facilities for the company. Colocation also allows businesses to take advantage of increasingly specialised solutions within the market, meaning it becomes viable to invest in state of the art cooling and monitoring technology that on a limited budget would not be affordable to an individual company. As well as allowing them to optimise space and general energy use, reducing carbon emissions which many current data centres fail to do. It is also easier to provide 24/7 service provision with key features such as dual generator systems and uninterruptable power supplies. One of the greatest benefits of using colocation services is that it smooths a key pain point for companies by allowing them to scale their data services relatively easily. Further benefits of colocation include disaster recovery (DR) by providing effective back-up solutions, so that companies can significantly reduce their down time. Ultimately by offering a diverse range of server management services, it is possible to liberate an IT departments time, meaning they can focus on long-term planning rather than day-to-day physical server management and its many associated problems. Facilities management staff can also be freed up, enabling them to focus on core, day to day business operations. For many companies, deciding whether to use colocation or the cloud, can be tricky. There are benefits to both depending on a business’ stage of growth and needs. SCC offers a suite of colocation products including, managed services and state of the art storage facilities, as well as practical advice on making a decision that’s right for you and your business.

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