Managed Services Drive Business Opportunities for Hosting Providers

By: Horst Haag

The global colocation market is expected to be worth $51.8 billion by 2020. As it becomes less attractive for enterprise IT to own data centers, the trend for outsourcing or obtainment through cloud services or infrastructure-as-a-service continues. Consequently, the demand for multi-tenant data centers (MTDCs) is expected to soar. Today, however, there is a distinct shift in what customers expect from a colocation provider. It’s no longer about space and power, as these services have been commoditized. The competitive advantage of MTDC and hosting providers will now be determined by their ability to provide best-in-class connectivity and supplementary services.

A MTDC must differentiate itself with business models centered around emerging connectivity services and the development of a well-defined product and service portfolio that showcases its connectivity options. The ability to do both will be a crucial success factor as the market continues to evolve in the coming years.

Penny Jones, an  analyst at 451 Research recently said that "for MTDC providers, it is all about enabling as many scenarios as possible while creating a targeted and focused offering that will appeal with a right mix of connectivity, scalability, service delivery, and geographical reach for the target audience. This has to be done at a price point that allows for continued service provider margins."

In the future, typical tasks from communication service providers will become increasingly relevant for high-quality data center services, as they will require process automation along with appropriate software support. Additionally, as data center providers’ connectivity products and services portfolios become more extensive due to customer demands and the need for competitive differentiation, the portfolio’s underlying technologies and the need for change must be managed.

As cited in a recent 451 Research report, there are difficulties in managing workloads and data in multiple locations, and those challenges can create additional opportunities for providers. Hosting and managed services providers are playing an active role in helping enterprises evaluate execution venues, migrate workloads, set up networks, operate infrastructure and secure data and applications. With demand for space increasing from public cloud firms, service providers and enterprises – data center colocation providers are benefiting.

A powerful data center management tool will be essential to equip infrastructure management teams to innovate and lead their companies' network evolution toward modern infrastructure with intra- and interconnectivity. An important feature to look for is a centralized database that documents all IT assets and connections across all the data center’s networks. This database should be dynamically updated as change occurs and provide planning capabilities with what-if scenarios, so all IT users are accessing the same accurate, up-to-date data on which to base critical business decisions.