Interconnection, Data Resiliency New Drivers for Colocation Data Centers in 2023

The more things change, the more they stay the same, right? Not really, especially when it comes to why enterprises of all sizes and across multiple industries are using or considering colocation data centers to meet changing priorities. 

The folks in marketing at CoreSite would pitch a fit if I revealed so much of what the 2023 State of the Data Center Report shows that you are not compelled to go and get it. I will say that the annual quantitative survey of 300 IT executives, which is the basis for the report, by and large reflects what is happening in the world. For example… 

• Businesses are more interdependent than ever – Companies with global markets depend on local, regional and transoceanic digital ecosystems. Smaller entities, as they catch up on digital transformation, are forming ecosystems as well; when it’s smart, they bind their value chain to other ecosystems to expand reach and grow revenue.
  
  
• The “speed of change” is a thing – The conversation around data isn’t focused solely on volume anymore, it’s also about latency and real-time processing. At a higher level, accelerating processes and reducing time-to-cloud are how enterprises adapt the customer experiences and products they deliver to meet and anticipate customer preferences.
  
  
• Digital resiliency is key to longevity – Shocks test the capabilities of companies. Disruptive technologies, like generative AI, explode on the scene. Winners absorb the blow or adopt quickly, recover and grow stronger through resiliency, both in legacy context (IT infrastructure uptime and performance) and a second definition: future-ready digital enterprise agility.
  
  

We’ve been collaborating with Foundry/CIO (formerly IDG) for a few years to better understand what the people that use or are thinking about engaging data center providers like, don’t like and wish they would see. 

“Be more profitable” is a perennial response, to no surprise. In the 2021 report, survey respondents cited reduced capital investment and significant savings for data egress, facilitated by direct cloud connections. In 2022, results showed that new “smart cloud” strategies cut costs and drove revenue. An IT leader in a financial services firm put it this way, “The reason for colocation comes down to financial benefit and scalability. You’re able to stay more focused on core competencies, but it always comes down to budget, budget and more budget.” As for scalability, even large enterprises recognize that expanding on-premises data centers to handle compute-intense use cases such as artificial intelligence, machine learning and data analytics is not viable.

What’s also instructive is that requirements change year-over-year. I was surprised by the #1 reason for the continued increase in colocation data center demand identified in this year’s report, which you can learn by requesting it here. 

See, marketing team, I didn’t spoil the CTA…