The Great Migration: Colocation, Cloud and Edge

Data centres aren’t just about racks anymore. Fuelled by technologies such as 5G, augmented reality and the Internet of Things, we’re seeing a move off-premise to enhanced colocation services, multi-cloud environments and edge data centres.


While the death of the data centre may be premature, we’re seeing increased migration toward off-premise facilities—such cloud and colocation—and the emergence of edge data centres.

More than half of globally utilized racks will move to off-premise facilities, including cloud and co-location sites, by year-end 2024, according to a newly released report from 451 Research. (It should be noted, though, this excludes server rooms, closets, micro data centres and telco hubs.)

What’s driving data centre migration

While the research firm predicts worldwide data centre installed-based growth will continue to slightly decline, overall capacity in terms of space, power and racks will continue to increase as organizations shift toward larger data centres, according to Datacenter Services and Infrastructure Market Monitor.

“Across all owner types and geographic locations, cloud and service providers are driving expansion, with the hyperscalers representing the tip of the spear,” said Greg Zwakman, VP of market and competitive intelligence at 451 Research, in a release.

While the research firm expects to see a decline in utilized racks across the enterprise, it also predicts an increase in non-cloud colocation, and Zwakman says we’ll see “cloud and service providers expanding their utilized footprint over 13 per cent.”

Adding value to colocation services

Changes in the role of IT and in the technologies used by business will continue to fuel the move to larger, off-premise sites.

As Dave Cappucio of Gartner wrote in his oft-quoted blog post about the death of the data centre: “IT’s primary function will be to enable the business to be more agile, to enter new markets more quickly, to deliver services closer to the customer, and to position specific workloads based on business, regulatory and geopolitical impacts.”

So how exactly do you do that, without an on-premise data centre? Cappucio says homegrown digital ecosystems can be developed in conjunction with service providers, and that “an emerging trend in the colocation market has been the introduction of enhanced services that go well beyond traditional power, floor space and support services.”

Those enhanced colocation services, he says, include access to multiple cloud services through secure networks, as well as “cross-connects to partners on the same premises, or interconnect fabrics to other sites or services.” (This isn’t easy to do, but that’s where software-defined networking comes in.)

Moving data centres to the edge

Data centres are also changing, thanks to 5G, IoT and AR. The average on-premise data centre isn’t equipped to deal with the demands of edge computing—hence, we’re seeing the emergence of edge data centres. These are sometimes located on-premise, but are typically located closer to end-users and complement cloud or colocation deployments.

As computing moves to the edge, it only makes sense that we’ll see more demand for edge data centres to support applications that require significant bandwidth, with close-to-zero latency.

A report released by Technavio earlier this year finds that “5G will significantly increase data traffic, which will increase the demand for upgradation of the existing data centers and construction of new data centers.” As a result, network upgrades will fuel the growth of data centres for edge computing.

The 451 report, for its part, found that demand for supporting IoT workloads and IoT data storage is expected to grow at a 46 per cent CAGR this year through 2024, accounting for 15 per cent of total global data centre racks by year-end 2024.

These projections suggest that network pros will increasingly turn to off-premise data centres and enhanced colocation services—after all, it’s not just about racks anymore, it’s about fuelling digital transformation.

For more information on Allstream’s data centre and colocation services, click here.

Images: lvcandy/iStock; aislan13/iStock

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