Data Center & Colocation 2020 Predictions

2020 Data Center & Colocation Predictions

December 26, 2019

As the year draws to a close, it’s exciting to think about what’s to come and how the colocation and data center industry will change over the next 12 months. While no one has a crystal ball, there are some past trends that are likely to continue, some anticipated trends that were duds, and some new trends on the horizon. Here are four of my colocation predictions for 2020.

Continued footprint decentralization (& its byproducts)

As the demand for over-the-top customer experiences increases, enterprises and service providers will be pushed to continue expansion into new markets. To achieve this, enterprises and service providers alike will be focused on servicing the “edge” and tying back to the core. This will drive continued M&A activity as IDC operators seek rapid entry into markets to satisfy the demand for broadly distributed hybrid architectures. The drive toward decentralization will foster a greater reliance on network connectivity.

Drew discusses hybrid environments.

Even higher demand on network providers to expand geographic reach and breadth of services

Networks are the underpinning of the data center industry. Customer demand for higher bandwidth and lower latency connectivity will continue to soar. Tolerance for any downtime will continue to diminish. The importance of hybrid solutions with accessibility to highly interconnected buildings tied to data centers will become a bigger decision-driving factor for where enterprises and service providers place their equipment. Colocation providers will solve for this need through reliance on access to more low-latency, high bandwidth options as well as in-house networks connecting data centers and other enterprise buildings.

Going “green” and solving for “brown”

“Going green” is a major corporate directive for many enterprises today, in particular, achieving lower carbon footprints. To help fulfill this mission, data center users are placing higher demand on renewable energy from data center providers. A new level of effort from operators will surface to identify and investigate new alternative sources and lower cost technologies to deliver renewable energy and reduce greenhouse gasses.

In addition, the reality of seasonal brownouts and their potential impact on data center operators will open new requirements for determining the best method for back-up power that may be an alternative to high-emission diesel generators.

Drew dives into what “going green” will mean for data centers.

Intra-industry collaboration

I believe that there will be an interesting dichotomy within the data center industry in the near future. Some providers will continue to push to be all things to all customers. Others will hold true to their primary business model, identifying with specific niches and partnering with other providers to broaden their offerings and market opportunities. Solving for the challenges that are facing data center operators will drive an elevated need for collaboration and coopetition between data center providers. Look for hyperscalers, wholesalers, and retail providers to partner and expand service offerings in the coming year.

What do you think?

My predictions are nothing outlandish, but they point to clear growth and change within the data center industry. I’m excited to see how it all plays out. Look for a follow up sometime this summer for a mid-year trend check-in to see if things are still headed in the same direction or if some new trend has appeared. While we wait and see, let me know if you agree, disagree, or foresee some other trend that I overlooked. You can share your opinions and feedback at EvoqueVoice@evoquedcs.com.

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