The case for colocation in a hyper-scale world
According to the Dell’Oro Group, investment in data centres is expected to exceed £1 trillion in the coming years.
Large, hyper-scale facilities, which require significant power and often cover more than 10,000 square feet, are predicted to make up more than 60% of total data centre capacity by 2029. Synergy Research Group reports that amidst recent major deals, Amazon is investing £150 billion over the next 15 years to maintain its lead in cloud computing over competitors like Microsoft and Google.
With more than 1,000 hyper-scale data centres worldwide, the rapid growth of these facilities is driven by increasing demands for artificial intelligence (AI) and large-scale data storage. However, while hyper-scale data centres excel in capacity and cost efficiency, they often lack one crucial aspect: control.
This absence of control, particularly regarding data storage, management, and security, makes colocation a better choice for businesses that value data sovereignty.
Hyper-scale providers often rely on third-party services and do not offer the comprehensive control that companies need over their data assets. In contrast, colocation allows your business direct oversight of your data and servers, ensuring you know exactly where everything is located and where your data flows. This setup maintains full ownership of the data environment while benefiting from scalable and cost-effective infrastructure.
The importance of co-location
The shift to the cloud is well-known, with many businesses spending more on cloud services than traditional data centres. However, as hyper-scale data centres grow, sensitive sectors like healthcare, finance, and IT are increasingly aware of risks like compliance, reliability and data breaches. For these industries, reliability and security are critical. Hyper-scale facilities, for all their scale and grandeur, do not offer the personalisation and individual care you get with colocation.
Colocation services offer a strong alternative. An alternative that gives companies control.
Synergy Research Group estimates that non-hyper-scale colocation centres now represent about 22% of total data centre capacity. According to Expert Market Research, the global colocation market was valued at approximately £66.3 billion in 2023 and is projected to grow at 14.5% per year, reaching £221.9 billion by 2032. This rising demand reflects companies’ need for reliable, customisable, and secure data storage solutions that hyper-scale providers often struggle to provide.
Why choose colocation over hyper-scale?
It’s evident that hyper-scale facilities serve a specific need but aren’t the best option for every company. Colocation offers distinct advantages, particularly regarding cost, reliability, and flexibility—key factors for businesses looking for a balanced approach to data management. Here are some reasons to prefer colocation:
Cost efficiency: Colocation helps businesses avoid the hefty costs that go with building and maintaining a private data centre. By leasing space in a shared facility, companies can take advantage of a shared infrastructure and lower operational costs. At Ilkari, we offer agile colocation and cloud solutions that cater to these needs while ensuring real-time control.
Enhanced reliability: Colocation facilities are built for resilience, featuring redundant power sources, cooling systems, and network connections. These centres implement robust security measures, including backup generators and multiple network links to reduce the risk of downtime. For businesses that cannot afford even a moment of interruption—due to regulatory demands or operational needs—this level of reliability is invaluable.
Flexibility and scalability: Colocation facilities provide the flexibility to expand infrastructure as business needs change. Instead of being limited by the constraints of a public cloud or hyper-scale environment, businesses can easily adjust their setups within colocation centres, whether that means adding more servers or upgrading technology. This adaptability helps companies stay competitive in a fast-evolving market while ensuring a stable and secure data infrastructure.
As companies navigate the growing demand for data storage and processing, they face a critical choice between hyper-scale and colocation solutions. Hyper-scale facilities seem appealing for their simplicity and scale. However, what they gain in size, they lose in the essential security requirements necessary for handling sensitive or regulated data.
Colocation offers a powerful combination of flexibility, cost efficiency, and security, making it the smart choice for maintaining control over your data.
For more information about how colocation can benefit your business, contact us.
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