Data Center Cabling Solutions
What we learned at the Fifth Annual Greater Chicago & Midwest Data Center Summit

What we learned at the Fifth Annual Greater Chicago & Midwest Data Center Summit

  • Jun 24, 2016

Colocation data center space and increasing data requirements topics for discussion

By: Rob Jordan | Data Center Infrastructure Architect


“To be, or not to be? That is the question…”

Shakespeare couldn’t have known when he first posed this question in the play Hamlet that it would still be very prevalent in the minds of many data center managers all these centuries later. In our case, the question relates to colocation (colo) space for data centers. To colo, or not to colo?

Managers continue to evaluate the numbers, trying to determine if leasing or owning data center space would provide a significant benefit in cost savings. Recently in Chicago, a number of colocation companies tried to provide the answer at The Fifth Annual Greater Chicago & Midwest Data Center Summit.

The colo space in Chicago is showing remarkable growth – about 20% over last year’s numbers. There are a number of newcomers to the industry; a fact that also indicates the market is strong and growing. Capital expense budgets for many of these colo companies show a 22% growth rate, a strong indicator that the market is healthy.

A forum for learning

Conference attendees included CenturyLink, Equinix, Digital Realty, QTS, New Continuum, TierPoint, Data Holdings, and Raging Wire – just to name a few. The number of companies with a presence either nationally or specific to the Midwest region were numerous, but a common fact seems to be that new players are right around the corner. The Summit featured a number of presentations and panels, covering a host of subject areas, including:

  • Comparing and Contrasting the Data Center REITs
  • The Capital Markets, the Headwinds, the Tailwinds and the Data Center Industry
  • Strategies for Upgrading Existing Data Centers to Stay Relevant in Today’s Markets
  • Best Practices for Future-Proofing the New Data Center
  • Key Issues in Data Center Leases & MSAs and the Nuances of SLAs
  • How Are You Reconfiguring Your Network to Support Evolving Needs?

Data requirements driving decision makers

The increased proliferation of smart devices, the growth of mobile data traffic, and regulatory requirements on Financial, Government and Healthcare markets are all factors that are driving decisions for data center managers. We learned an interesting fact at the event: There are 300 hours of video uploaded to YouTube every minute.

In addition, Big Data, medical research and the Internet of Things (IoT) are only throwing fuel onto the fire that drives increased data requirements. It’s clear that these requirements will continue to influence the decisions data center managers make, including the assessments of the value of colo spaces.

Space and power focuses for colocation

The focus in the colocation arena, on the surface, appears to be space and power requirements. Colo companies are packaging lease deals for space and power to attract new customers. There are a number of cost models that seem to be attractive to potential customers when faced with the question of, “Do I lease or own?” 

The colo space can be divided into two primary groups: retail and wholesale. Wholesale providers are generally concerned more with space and power, but sell services as well. Retail providers are generally more concerned with smaller customers providing racks, circuits, services and access. There are some providers that may consider themselves hybrids who can offer as much power and space as needed.

Initial conclusions for colocation data centers

The future of the data center market is bright. It’s quite possible that the answer to the question many data center managers are asking is simple. There is plenty of room to coexist. Through virtualization and moving to the cloud, managers are able to reclaim space in their owned data centers and the savings can be used for increased capital expense budget, either in-house or leased. It could truly be a win-win situation.

Emerging data rates proposed by standards updates, as well as distance considerations and loss budgets in current and future high-speed links, create challenges that every designer needs to understand. Check out this article to find out what you need to know: The Impact of Emerging Data Rates on Layer One Fiber Cabling Infrastructures.