However, as enterprises shift workloads to the cloud, businesses are engaging in hybrid IT solutions that blend cloud, colocation and their own on-premise data centers to manage increased data loads, edge requirements and leverage IT applications. The industry is faced with greater complexity, adding challenges to managing on-premise environments such as shortages in skilled IT technicians, complex connectivity requirements and the operation and maintenance of the data center, ultimately distracting from a company's core competency. 

As businesses search for cost-effective solutions to allow them more control over their services, the shift in the industry is showing a shrinking environment for services that cater to enterprise-sized deployments, pushing businesses to cloud solutions. While the cloud is useful, companies that rapidly expanded operations in the cloud are now seeing exorbitant usage costs and would like to bring some of the workloads back to being on-premises.

Demand for data centers and high-performance workloads

Hyperscalers like AWS, Microsoft Azure, Google Cloud, Alibaba, and IBM have built their own data centers with millions of servers worldwide that support the cloud. Because of their massive size and resources, their global network of data centers is almost exclusively tending to their direct needs. Enterprise businesses are now left in dire need of data center providers that can provide customized solutions.

Before the hyperscale data center boom, enterprises were accustomed to a level of service that is now more challenging to find. These enterprise businesses are looking to recapture these tailored services, a challenge compounded by the cloud. While cloud services are helpful, they are costly, and lack the flexibility and agility that a data center operator can provide for these enterprises. Emerging technologies like artificial intelligence (AI) and automation will also likely increase the data usage and requirements for even enterprise-level customers, increasing their cost in ways that are difficult to predict.  

The continued demand for data centers at the enterprise level is also paired with other factors, such as the location and access companies are looking for to distribute their workloads. Companies seek to expand toward the edge or incorporate colocation services to house their data centers in a controllable location. This approach will help enterprise-level businesses remain hybrid and adapt to emerging technologies.

Despite the high demand for migrating to the cloud, the private cloud and traditional data center infrastructure remain essential for enterprises. Some enterprises prefer a pricing model that helps control costs, which enterprise-level data centers typically offer. Cost-saving methods include:

• Elimination of unexpected cloud costs like egress fees and charges for unused resources and overages with a dedicated connection to cloud service providers through a data center partner.

• Leveraging data center technology to lessen the cost of energy at peak hours by peak shaving.

• Using virtualized servers to manage costs and security while benefiting from faster provisioning.

Enterprise-level data center colocation providers can offer enterprise-grade security, specific workload computing, and one-on-one management with the client, filling this growing data center industry hole.

Hyperscale or not?

While it is easy to point to the data center providers pivoting to hyperscale, it is not realistic for all data centers to support all customer types and sizes. Businesses depend on the reliability of the data center to meet the specific needs of their IT operations. Although a hyperscale data center offers an extensive portfolio of services,