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Colocation: The Sweet Spot for “Enterprise AI”

Written by The CoreSite Team | 02/06/2025

AI has moved from nice-to-have to need-to-have. Determining where AI fits in your infrastructure is the next decision in your AI strategy.  Artificial intelligence is being hailed as the golden ticket for businesses looking to optimize processes, cut costs and get ahead of the curve.

A 2024 McKinsey report shows that AI adoption has surged to 72% of companies, up from 50% in 2023. What’s more – enterprises are expanding AI into a wide array of functions within their operations.1 But as companies explore AI, one important decision needs to be made before getting lost in the buzzwords, algorithms and black-box magic of AI. Where do you house the engine that powers this disruptive innovation?

Organizations are using AI in more business functions than compared to previous years.1

Colocation offers an excellent technical environment and cost-effective solution. The place where you keep your infrastructure and critical data could be the same place where you run AI models, train your algorithms and generate actionable inferences. More and more enterprises are choosing to move infrastructure into a reliable, high-performance environment where data and modern workloads can coexist. Colocation also can provide superior interconnection, reinforcing distributed architecture strategies – you know, good old hybrid IT.

A 2024 Foundry study (the 2024 State of the Data Center Report) revealed that colocation data centers are preferred among IT and business leaders for deploying enterprise AI workloads2 and the majority are considering moving these operations from the public cloud to colocation.3

AI may be the new player, but it’s just one cog in the machine that drives business. Like other applications, it requires a secure, high-performance ecosystem that can handle not only its hunger for high-density computing but also its need for speed, security and scalability. CoreSite data centers have been delivering on this for years. And when it comes to AI, they give you all that and more.

Control: Your AI, Your Rules

Colocation gives you control over hardware and software. It’s not a cookie-cutter solution with inherent limitations. Unlike public cloud services, where the infrastructure is largely controlled by the cloud provider, colocation can (depending on the data center provider) allow you to customize and optimize the environment to run enterprise-specific AI workloads.

You’re in charge. You can scale infrastructure as needed and, once your system is in place, the colocation provider handles the heavy lifting, leaving you free to focus on putting AI-driven insights into action.

Speed: AI at Full Throttle

AI demands speed. Models need to train quickly, processes often need to run in real-time and results must be computed and processed faster than you can blink. In colocation facilities, servers are physically close to data sources and connected to high-speed, low-latency networks. This proximity ensures your AI can analyze datasets, run simulations and generate models with the low latency needed to make every millisecond count.

Reliability: Unbreakable Uptime

Downtime isn’t just inconvenient for AI—it’s a disaster. Colocation data center providers understand this, which is why they invest in redundant power supplies, backup generators and high-availability networks to keep your AI-driven processes running 24/7. With AI, every minute of downtime is a missed opportunity, just as it is with other core business operations.

Security: Safeguarding AI Data

In the world of AI, data is king. But with great data comes great responsibility to keep it secure. Colocation facilities offer some of the tightest security available. With biometric access, 24/7 surveillance, encryption, fire suppression and redundant power, these centers are designed with multi-layered security to secure information and assets. Furthermore, one of the most effective ways to protect data is to keep it private; storing and processing data in private clouds helps ensure compliance with regulatory standards and intellectual property protection.

Plans for AI-related workloads to move from public cloud to colocation.3

Interconnection: AI in the Ecosystem

Interconnection is the lifeblood of AI. In colocation data centers, AI models can seamlessly connect to databases, cloud services and edge systems. With high-speed, low-latency connections, data flows in real-time, allowing your AI models to process, adapt and make inferences faster. This interconnected ecosystem is essential for businesses to maximize AI’s potential.

Colocation: Extend Your Infrastructure, Add AI

AI is the latest "business-critical" technology for enterprises. It’s a critical piece of the puzzle no question but it’s also one element of a much larger system. Like every other part of your infrastructure, it needs a secure, reliable and efficient home. Colocation data centers offer that home. They already house your data and power your business why not let them support AI, too?

Whether you are well on your way or planning to adopt AI, centralizing operations in the place where you store and process data and run your applications could prove to be a very smart move.

Know More

Contact us to find out how CoreSite’s AI-ready data centers can streamline your operations, reduce total cost of operations and drive a competitive edge in your AI strategies.

Learn what 300+ IT decision makers consider important to customers, partners and their enterprise:

Download the 2024 State of the Data Center Report here.

 


References

1. The state of AI in early 2024: Gen AI adoption spikes and starts to generate value (McKinsey)
2. Differentiation strategies for datacenter networking vendors in generative AI opportunities (IDC)
3. 2024 State of the Data Center Report (CoreSite and Foundry)