Survey on North American Data Centers Reveals Top Demands

Recently, TLC (a data mining and management company) conducted the North American Data Center facilities survey to forecast trends and demands in the colocation services industry for the next four years. In total, 337 data centers providers in North America were pinpointed for a total of 1,171 data center facilities. The size of the data centers varied greatly, as did their price plans for clients. Some wholesale data center providers boasted facilities over one million square feet, while other “boutique” providers had around 1,000 square feet or even less.

In addition to narrowing down the survey to Canada and the US, niche markets were also identified, which included local colocation, national wholesale data centers and national retail data centers. Within these niches, there were unique characteristics and features designed to specifically serve their target demographics. The pricing structure and products were created to maximize the results of the clients, but there were still some overall trends which emerged.

All About the Money

In terms of pricing, local colocation data centers price based on a 19-inch rack, including power and IP, which is considered “standard” in this industry. The national retail data centers are generally bigger (sometimes multi-regional), and a single provider may have numerous facilities. Suite space is usually included in the pricing, but there are so many options and features that it is impossible to define an average. For the national wholesale data center pricing structure, most of these providers are very large and offer immense personalization for every client—there is no standard or foundation due to all the customization options.

However, what is most interesting is that many of these providers are moving into other realms. For example, a chunk of wholesale providers are now offering or plan to offer retail data center facilities. For this niche, it is relatively easy to offer smaller space, packages, power and options. Retail providers are seeing the benefits of expanding their facilities and offering supersized suites in order to bring in more customers.

What to Expect

The TLC 2014 to 2019 report is broken down into key sections, starting with the overarching trends in North America. The survey found that many facilities are focusing on expansion, customization and ultimately offering more or better security for their customers. They understand that, particularly with colocation services, clients are educating themselves about the need to find the “right” region that is free of natural disasters and offers great connectivity. For many providers, this will mean changing or adding a location in order to meet the demands of clients.

Section two is centered on pricing in North America. There are many factors that influence pricing, from the increasingly competitive market to the need to offset additional security with higher pricing structures for enterprises. There are also geographical pricing trends, which are influenced by cost of living in different areas, taxes, fees and other out of pocket expenses for businesses. From managed service pricing to cloud computing pricing and everything in between, what a business can afford to offer as a base package for colocation services in Utah will be wildly different than California’s offers.

The Things to Come

In section three the report highlights a few providers, including those of the 27 major data center providers. Of course, none of these are boutique providers, but there is still plenty to learn from them. Some clients prefer the personalized service of a smaller Utah colocation provider, while others simply want to go with a name they’ve heard of before. For colocation startups, it is critical to listen to the advice of major providers and learn from their mistakes. However, as a potential client, it is critical to look beyond price points and name recognition.

Section four is forecasts for the next four years via a number of forecasting methodologies, including a capacity forecast. How much square footage will be the average for the three industries by 2019? How much power will they offer? What will the pricing be for rack space, square footage or for each kW? There is only so much that forecasting can predict, and given the digital era and changes to every tech industry including colocation services, it is difficult to say.

Your Five-Year Plan

As a colocation client, it is paramount to stay on top of trends and know exactly what your provider has to offer. Sticking with a regional company is a smart move, since you can enjoy service customized to you—and perhaps even visit the facility. Check their customer service response as if you’re experiencing an emergency. You want to make sure you can reach a live person and they can address your concerns without getting lost in customer automation.

If you’re not 100 percent happy with your colocation provider, it’s better to shop around and make the change now rather than in a few years. With so many fantastic, local providers at the ready, there is no need to settle for subpar service.



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Murray Newlands

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