Datacenter Market Evolution

Datacenter has come a long way since its inception, from a dedicated space within a building that houses computers, to a specially designed space with strategic cooling and power requirements that can service multiple companies from the same location with cloud and other shared resources. Continuous IT operations often play a vital role for many business houses, so ensuring redundant components and infrastructure for power supply, data communications, backup, and air conditioning infrastructure is currently a basic necessity for a datacenter to function.

Until recently, most datacenters were housed within the campus of the businesses, leading to less automation and less DC specific infrastructure. After the spurt of colocation DC providers, organizations have found an easier way to tackle the data storage problem through third-party managed services using its expertise to handle the storage related issues and billed monthly based on usage. This also eases the capital expenditure (Capex) and operational expenditure (Opex) of organizations to own a datacenter and hire staff to operate it.

Datacenters mainly operate in two models, (i) a captive DC that is built specifically for an organization as Build, Operate, and Manage by own model; (ii) a colocation DC model — an outsourced model wherein a third-party enterprise leases space and hosting services to the organization. The third-party enterprise caters to multiple companies in the same location.

Captive DC market was a traditional method that had a majority share in the market that is gradually losing ground to the colocation DC. The captive datacenters that held 72% market share in 5 years ago, now holds only ~55% of the DC market share, showing decrease at a rapid pace. Reliable power supply, professional and value-added services offered by third-party services are tipping the market share in colocation service providers favour. Colocation DC market is growing with many organizations moving towards colocation services from captive DC to address the issues of scalability and higher capex etc.

The growth in data is estimated to generate more than 150 zettabytes of data by 2025. This is a major factor influencing the growth of datacenter market globally. Modernizing datacenters is another factor to enhance performance and energy efficiency, our analysis suggests that a datacenter becomes obsolete in 7–8 years’ time. DC designers strive to make most of the available space and ensure there is scope to scale when required and provide best of the environment for the IT infrastructure like low temperature, humidity, continuous power, and security, etc.

– Sishir Naren
ICT – Research Analyst,
Infoholic Research