As businesses are expanding their
operations globally, the need for data storage solution is increasing at an
extraordinary rate. The expenditure for setting up and maintaining a data
center with perfect security, environmental and performance conditions is
significantly high for any given small or medium sized organization. In
addition, the energy consumption of data center is high and depends upon their
size. Thus, companies also want to decrease their energy consumption in order
to reduce their carbon footprint. Due to limited IT budget and increasing
requirement of high operating bandwidth, companies are showing interest in
outsourcing their in-house data center to third party service providers. With colocation
of data center managed by hosting service provider, companies are able to
focus on streamlining their business operation and revenue generation.
A hosting service provider offers computing
servers, storage space and power for companies apart from providing advanced
networking facilities. A colocation facility managed by service provider and
owned by a company can be termed as managed hosting service facility. These
help to reduce spending on IT infrastructure and have ownership control over
data. Companies also colocate their equipment with colocation service provider
to avail the benefit of higher bandwidth in their operation.
Colocation can be classified as
wholesale and retail colocation services depending upon leasing of space by the
customers. In wholesale colocation service, a company leases a whole colocated
data center for operation. Whereas, in retail colocation service, a company
only leases a limited part of space or rack within a colocated data center. As
cloud-based services are increasingly becoming popular in IT businesses,
colocation service providers are partnering with cloud service providers by
offering cloud-based solution with data server to the companies.
Some colocation service providers
also offer data analytics solution apart from simply providing data center
solution. As colocated servers are remotely located, the need for
firewall, remote access and system monitoring tools becomes prominent. Thus,
most colocation sites provide video surveillance and biometric access for
constant monitoring of colocated data centers to the companies.
The demand for colocation data
center is estimated to increase in coming years as companies would need to cut
down their operational cost in order sustain in the market. Colocated data
center provides better speed, efficiency and reliability which help companies
perform faster in critical operations. An off-site data center also helps
companies to protect their data and create a backup in case of a disaster in
in-house data center. The increasing use of cloud computing is expected to spur
the adoption of colocated data center in coming years.
The major challenge faced by
colocation service providers is the issue of regulatory compliance with its
cloud based end customers. This can be overcome by adopting a standardized
compliance system which is expected to emerge in the near future.
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