Colocation Data Centers Are Growing: What This Means for Owners

More enterprises are opting to turn their data center operations over to the experts that operate colocation facilities so they can focus on their core mission—instead of managing data center administration, risk management, planning and maintenance.

According to Synergy Research Group, colocation data centers now account for 23% of worldwide data center capacity, with on-premise data centers sitting at 40% (down from five years ago, when well over half of global data center capacity was attributed to dedicated, onsite data centers).

2 Colocation data center trends

As colocation services accelerate, we’ve noticed two trends about these spaces—and two big challenges spurred on by these trends.

Trend 1: Expanding physical data center spaces

The size of the data center colocation market was nearly $62.3 billion in 2022 and is set to increase to nearly $89.3 billion by 2030. IT research firm Omdia predicts that, this year, the industry will see an additional 26 million square feet of capacity come online for large cloud and colocation service providers alone.

We see this growth happening in real time as colocation owners invest in new facilities and grow their existing spaces to keep up with changing client demands.

Trend 2: Reaching new types of clients

As colocation data centers increase in popularity, these third-party providers are taking steps to support new types of clients or verticals they haven’t serviced in the past, such as branching out to support healthcare or life sciences, for example.

As they broaden their reach, a colocation expansion may also come with the need to accommodate wide variances in requirements for things like uptime, security, latency and bandwidth.

Challenges spurred by colocation growth and expansion

The combination of upgrading facilities and broadening client reach creates two challenges, and they both come down to this: meeting evolving client needs.

Challenge 1: Supporting faster speeds and shorter download times

There’s a constant need for more speed and higher bandwidth. As clients deploy cloud computing, robotics, IoT and other smart-building applications, many colocation data centers frequently receive requests that sound something like this: “I used to have a 10G link to my cage, but I want to upgrade to a 40G or 100G link.”

Although these upgrades have major implications for the fiber backbone that supports a colocation facility’s internal network, they must be done quickly to maintain client satisfaction levels and enable bandwidth-drop commissioning for client cages swiftly and efficiently.

To keep up, many colocation owners are upgrading their switch gear and, along with that, their fiber backbone. These upgrades often involve SR4 optics, which integrate four data lanes in each direction with 40G bandwidth.

They also add more complexity, as colocation data centers attempt to transform a backbone that was designed around simple LC duplex transmission to one based on MPO and MTP connections, which require proper attention to polarity. To fully futureproof their networks, more colocation data centers are also deploying a singlemode fiber backbone.

The smaller networks that exist within client cages also have changing demands. Within that infrastructure, for example, Belden is seeing increased demand for OM5 to support delivery of multiple channels over the same pair of fiber.

Challenge 2: Enabling standardization

As colocation data centers expand to run across multiple sites, they also begin to prioritize standardization.

Instead of each facility making its own call about how to build and manage their individual network, colocation providers are focused on driving standardization into their solutions and processes so they can turn around new services sooner and commission new clients faster—instead of making a customer wait a few months for a fiber trunk, for example.

Standardization can also help colocation facilities leverage purchasing power and reduce costs by pooling resources to reduce or eliminate repetitive, duplicate or unnecessary spending.

Standardization can lower labor costs, too: Something as simple as uniform cabinet assembly reduces the amount of time workers must spend on deployment and maintenance.

Getting ready for higher demand

Belden works closely with colocation owners, using our vast experience to help them evaluate all their options so they can serve their clients faster—and better.

• Should you invest in singlemode for your fiber backbone? What will that investment get you?
• Do you really need OM5 in cages to meet client demand?
• Should you use fiber breakout from MPO connectors, or should you investigate SR4?

Whether it’s at the facility level, cage level or data level, we can help you answer questions like these—and many more.

Related resources:

• Is Your Colocation Data Center Ready to Handle More Demand?
• 5 Common Types of Data Centers: Do You Know the Differences?
• Colocation and the Data Center Industry: What You Need To Know