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Unlocking Growth Horizons in Data Center Colocation Services: Hyperscale Public Cloud, Emerging Locations, Edge Strategies, and Sustainability

How will you evaluate different partnership strategies and implement best practices in the evolving data center colocation services ecosystem?

Next-generation data centers are becoming the cornerstone of technological progress across various industries. However, geopolitical chaos, trade barriers, and internal challenges are disrupting data center supply chains and challenging traditional industry norms. This is driving service providers to deliver cutting-edge infrastructure that caters to the unique demands of tomorrow’s technology-driven workloads, keeping in mind the following:

  • Strategy and Services: Aligning growth strategies, infrastructure design, and go-to-market initiatives with artificial intelligence (AI) training and inferencing models.
  • Scalability: Providing adequate land, power, capacity, and connectivity across multiple locations to better manage large-scale datasets.
  • Location: Defining and establishing optimal edge locations for latency sensitive workloads. 
  • Design: Embracing high-density/ultra-high-density data center design and liquid cooling technologies to optimize resource utilization and maximize facility resilience. 
  • Sustainability: Optimizing energy consumption, lowering power usage effectiveness (PUE), and reducing carbon emissions, especially for compute-intensive workloads. 

Consequently, colocation providers feel the pressure to accelerate innovation and overcome growth barriers like limitations of land/power resources, operational skill set gaps, increasing competition, and pricing pressures.

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Understanding the Potential of Data Center Colocation Services in Different Geographies

Frost & Sullivan finds that:

  • While public cloud service providers drive the demand for global colocation services, AI adoption across different verticals is unleashing new prospects for AI training and inferencing.
  • North American colocation services are poised to create new opportunities worth $40.20 billion by 2029, led by locations like Northern Virginia, Silicon Valley, Dallas, Atlanta, Phoenix, and Chicago.
  • India accounts for about 92% of the total South Asian colocation services industry, set to grow at a compound annual growth rate (CAGR) of 25.6% from 2023 to 2028.
Strategic Imperatives Spurring Change in Conventional Data Center Colocation Services:

Transformative Megatrends

Embracing renewable energy sources, environment friendly/green solutions, energy efficiency, carbon neutrality, and advanced cooling technologies to help enterprise customers achieve their environmental, social, and governance (ESG) goals.

Disruptive Technologies

Developing salable infrastructure, architecture, and design that supports high-density colocation, especially for AI and machine learning (ML)-based workloads, Internet of Things (IoT) applications, and immersive technologies.

Competitive Intensity

Differentiating solutions by focusing on strategically located, purpose-built facilities that enable real-time training and inference for AI models, while accelerating innovation to thwart competition from regional carrier-neutral service providers.

Is your organization equipped to leverage these strategic imperatives to future-proof your technology strategies in data centers and colocation services?

To successfully navigate the data centers and colocation services revolution and know more about emerging growth opportunities in this industry, access Frost & Sullivan's comprehensive intelligence on the subject. Simply fill out the form on the right and click ‘Download’ to steer your organization towards exponential growth.

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