Increased Need For Managed Data Center Services Will Accelerate The Global Multi-tenant And Wholesale Data Center Market Through 2020, Says Technavio

LONDON--(BUSINESS WIRE)--According to the latest research report released by Technavio, the global multi-tenant and wholesale data center market is expected to record a CAGR of more than 13% until 2020.

Global multi-tenant and wholesale data center market expected to record a CAGR of more than 13% until 2020.

This report titled ‘Global Multi-tenant and Wholesale Data Center Market 2016-2020‘, provides an in-depth analysis of the market in terms of revenue and emerging trends. To calculate the market size, the report considers the revenue generated from the following:

• Multi-tenant data centers, including retail colocation and managed services.
• Retail colocation, which allows enterprises to rent colocation space in a data center to host and operate IT infrastructure.
• Managed services, including the sharing of data center IT infrastructure for the customers' business operational purposes where the infrastructure is managed by the service providers. These services also include both traditional and cloud-based hosting, system services, application services, data services, and network services.
• Wholesale data centers wherein organizations can rent the entire facility and use their own IT infrastructure. Organizations can also have the managed service provider operate the infrastructure.

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Hardware and devices define infrastructure in traditional data center environments. A software-defined data center (SDDC) is a data center where infrastructure is delivered as a service through virtualization of the physical infrastructure; hardware infrastructure is managed through intelligent software systems.

“SDDC supports both legacy applications and cloud computing services. It improves efficiency, lowers costs, provides applications in minutes, offers higher availability and better security, and creates an opportunity for the delivery of workloads through the cloud,” said Rakesh Kumar Panda, one of Technavio’s lead industry analysts for data centers.

Some of the other driving forces behind the growth of the global multi-tenant and wholesale data center market are as follows:

• Increased need for managed data center services
• Growing demand among SMEs
• Increased adoption of cloud-based services

Increased need for managed data center services

The increased use of data centers at an organizational level can be attributed to the proliferation of data generation, which has subsequently increased the need for dedicated services and solutions for building, maintaining, and supporting the IT backbone. These services include hosting, server consolidation, and business continuity services.

Managed services help customers in handling their hosting and telecommunications requirements, thereby enabling them to build a reliable, flexible, and robust infrastructure. Some of the services such as dedicated web hosting, remote storage and management, and server migration and compliance services are of vital importance to enterprises. With the growth of overall business demands and limited capital to establish and maintain data centers, organizations are increasingly adopting managed services.

Growing demand among SMEs

SMEs are among the principal adopters of colocation and managed services worldwide. They have a limited budget and are always looking for services that can reduce their capital and operational expenditure. Colocation and managed services help SMEs reduce their financial burden in building and operating data centers. The growing adoption of cloud-based services will lead to SMEs opting for cloud-enabled colocation and managed hosting facilities.

Based on business requirements, SMEs will contribute more to the revenue of retail colocation and managed services compared to that of wholesale colocation. Retail colocation vendors offer power infrastructure, cooling solutions, and security. Also, the widespread networking capability of colocation facilities will greatly benefit growing SMEs. Further, managed service providers offer benefits, including the provision and maintenance of data center IT infrastructure.

Increased adoption of cloud-based services

The adoption of cloud-based services and big data analytics is growing rapidly. In addition, growing digitalization has resulted in a significant increase in the amount of enterprise data that is generated and processed.

Accessing the information stored in a data center involves the use of many devices; a powerful networking solution is required to offer high-availability services. In addition, digitalization has enabled processing of application workloads on servers with cross-platform support. Processor manufacturers such as Intel are looking to increase the server efficiencies in a distributed computing environment.

The use of data center IT infrastructure has increased with the advent of virtualization, resulting in competitiveness among businesses. Growing business needs are therefore prompting enterprises to build data centers or collocate space and infrastructure to reduce initial investments.

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