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October 21, 2016

Emerging trends challenge colocation providers to be more flexible and responsive

How can colos become more reactive to customer needs for flexibility and agility?

By

Colocation services underpin much of today’s information society, providing the data centre infrastructure from which digital business and consumer applications are delivered. As such it is a market that is growing overall and will certainly continue to do so in the short-to-medium term.

Nevertheless, providers of collocation services face a number of challenges as well as opportunities. These encompass business issues such as the changing face of those who purchase their services and the structure of the colocation industry itself as well as technical requirements which include Edge Computing, Cloud Computing and the impact of data centre infrastructure management (DCIM) software.

In many cases, the lines of demarcation between business and technology issues are blurred. A case in point is the subtle change in emphasis of the buyer with whom colocation providers find themselves engaging. In earlier times they tended to be procurement or facilities professionals; today they may be an IT manager, a chief information officer (CIO) or increasingly a business executive which could have a rank as high as Chief Financial Officer (CFO) or Chief Executive, depending on the business requirement. There are even new roles emerging such as Chief Digital Officer (CDO) an executive in charge of digital strategies, and usually the change management associated with them, throughout an organisation.

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The implication for colocation providers of this diversification among their buyer community is that they must learn to converse with each customer on their own terms. The concerns of IT managers, and the vocabulary they use to express them, may be very different from those of CIOs, CEOs and CDOs. Colocation providers have to speak in many tongues and be equally convincing in each.

READ: Inside God’s data centre and the challenges of the CIO who runs it!

Not only are customers evolving into different creatures but the dynamics of the colocation industry itself are changing also. Mergers, acquisitions and partnerships among providers are changing the competitive landscape, causing companies to realign along various market segments such as wholesale, retail, carrier and regional providers. Some are occupying small nice positions whereas others are growing by acquisition into giant international providers.

As such, Colocation providers need to be aware of the moves in their own market and concern themselves in occupying the most advantageous position relevant to their own strengths and competencies.

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