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A Shifting Landscape for Colocation Providers—What You Need To Know

November 14, 2016 No Comments

Featured article by Mark Bidinger, President, Cloud & Service Provider Segment, Schneider Electric

The landscape for colocation providers today is rapidly shifting. The sector is facing market forces that represent great opportunity and significant challenge: an evolving marketplace, growing number of industry trends and demands on new and evolving technologies. In the face of these challenges, colocation providers must balance operational change with continued innovation at every level of their offer.

1. Evolving Marketplace

The customer landscape for colocation providers is fluctuating. Today, C-suite, line of business and other customer stakeholders are becoming increasingly involved in data center strategy, and the number of potential decision-makers is growing rapidly. As a result, colocation providers will need to expand their knowledge base and skill set to talk with each audience in new and distinct ways.

The business of colocation is also evolving, as companies look to respond to volatile market trends, while driving organic growth through changes in business models. This includes repositioning or moving into an adjacent or different segment; exploring mergers and acquisitions to provide new support and services for clients; and partnerships through which colos can expand their geographic reach.

2. Growing Industry Trends

Colocation providers can find new opportunities for helping their clients address the challenges associated with new industry forces. For instance, the Internet of Things (IoT) is impacting and changing the way organizations think about the traditional IT solution stack, from infrastructure to middleware to logic and data. Colos are well-positioned to assist clients in making the right investment decisions to find success in new connected technologies.

Edge computing is yet another force; it is being driven at the macro-level by IoT and big data. Edge computing opens more opportunities for colocation providers, by driving the need for more data acquisition, computing power and storage resources closer to the edge of the network. It is typically supported by small, connected and distributed data centers that decrease latency of data transmission and increase the efficiency of the entire connected system.

The cloud, on the other hand, remains a bit of an enigma. Whether a threat or an opportunity—or perhaps both—it is becoming increasingly important and integral to the data center ecosystem. This is especially true as organizations begin to deploy IoT-enabled strategies, which demand more computing power and system reliability. The cloud’s elastic and flexible nature places new challenges upon colos in determining if and how they address cloud technology architecture: do they offer cloud services themselves, partner with a cloud provider or provide only the infrastructure for cloud providers to use—or a combination of the three?

In the case of Internet Giants, colos are well-suited to offer the infrastructure needed. They can support the large players as they seek to extend their reach in new markets, satisfy their goals around efficiency, low latency and security, and also find opportunities where they can resell the Giant’s cloud services to their own customers.

There are also opportunities for colos to utilize cloud providers as tenants as well as providers offering private and public cloud services, access to cloud services and software-as-a-service.

3. Shifting Technology Landscape

IoT, Edge and cloud computing—by their very nature—require a more resilient, flexible data center design that can be built up or consolidated over time as business needs dictate. Colos must embrace this flexibility in order to efficiently and cost-effectively address a broadening set of customer demands without incurring issues related to stranded capacity or reliability.

Modular data center build architectures, which can be right-sized out of the gate, can support the flexibility and grow-as-you-go requirements dictated by the ever-changing data center landscape.

Additionally, DCIM (data center infrastructure management) software is playing an increasingly important role in data center management by bringing consistency, predictability, reliability, efficiency and control to operational metrics and improving service assurance. It provides data center managers with an accurate view of data center performance across IT and facilities, enabling better and more insights-based control of the entire data center system that drives up efficiency, lowers costs and increases overall system reliability.

DCIM can also provide advanced power and full infrastructure monitoring for multi-tenant environments; statistical reporting on data center operations, physical location of servers, updates on environment, PUE (Power Usage Effectiveness), power and cooling; and custom portals.

Conclusion

Rapid transformation, an evolving customer segment and trends like IoT, edge computing and cloud are challenging the colocation industry to break the status quo. By understanding how these challenges can turn into opportunities and innovating at every level of the data center, colocation providers can chart their own paths to future success in the digital world.

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About the Author

Mark Bidinger is the President of the Cloud & Service Provider Segment for Schneider Electric. Responsible for turnover, offer and deployment mode inside of a segment that is evolving rapidly for both customers, users and Schneider Electric. The disruption creates new business opportunities that necessitate a differentiated business model. Leading a global team, Mark is focused on addressing the international needs and the unique demand profiles of colocation, telecommunications, IT, & Internet Giant clients.

Under Mark’s transformative style of leadership, Schneider is engaging on solutions and organizational structure to meet the demands of very specific customer requirements. Helping clients manage their energy, process, and business in data centers, buildings and industrial facilities, Mark’s team specializes in helping create complete solutions with smart technologies, zero carbon footprint manufacturing, or best in class data centers. Mark has 15+ years’ experience delivering solutions in the Mission Critical space and celebrates 30 years with Schneider Electric. Multiple key note engagements, most recently at Datacloud Europe, 2016.

Mark holds a B.S. in Mechanical Engineering from the University of Notre Dame.

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