Hosting & Colocation
Outsourcing market benefits from OPEX focus
DCS catches up with Greg McCulloch UK Managing Director of Interxion, to discuss the colocation market and how he sees end users grappling with the rapid rate of technology change in the data centre and more general IT space.
DCS: The whole DC market seems to be buoyant right now – has the credit crunch bypassed the industry?
GM: Not at all, the economic downturn has affected every industry. However, despite the economic uncertainty, companies still need to invest in their infrastructure in order to remain competitive and take advantage of new technology trends such as cloud computing, algorithmic trading, blade server deployment and server virtualisation. In order to do this, many organisations face a choice – whether to update legacy data centres or build new data centres, which all require considerable capital expenditure, or whether to outsource to someone like Interxion.
Major capital expenditure in the current climate is very unlikely to be approved by the board, so many of these organisations are turning to colocation providers who allow them to leverage shared infrastructure and convert this capital expenditure requirement to a operational expenditure that can be scaled as the company scales. So in a way, financial pressures are also helping to drive up demand for our services.
February/March 2011
Furthermore, as I mentioned previously, the fact that we have built substantial communities of interest in the financial services, digital media, cloud service providers, carriers and IXPs, and enterprise sectors means that colocating at Interxion provides substantial revenue opportunities for our customers.
DCS: Is there enough business to go around for all the DC operators – from local to global – or might we see a consolidation phase?
GM: There is certainly enough business out there to go around. Over recent years the demand for data centres has outstripped supply, and this is likely to increase as the biggest IT refresh since Y2K continues in terms of deployment of blade servers and the attendant power and cooling demands, the rapid deployment of broadband and IP services, and the explosion of data traversing the globe due to the huge increase in the use of the Internet to deliver products and services.
These all play to Interxion’s value proposition of delivering highly connected, highly resilient data centres that provide 24X7 availability.
According to a data centre study conducted by IDC on behalf of Interxion, the continuing demand for outsourced data centres is likely to result in an estimated CAGR of 23% in the sector’s major European markets (the UK, Netherlands, Germany and France) over the coming four years. This equates to growth in these markets from €725 million in 2008 to €2,007 million in 2013.
The survey, which reflects the views of respondents from about half of the European market by revenue, also revealed that 95% of European companies operate in-house data centres and are accelerating their migration to outsourcing.
DCS: It seems that more and more organisations are looking at outsourcing their DC requirements – what are the main drivers behind this trend?
GM: The benefits of colocated data centre facilities are that they offer greater choice, higher performance and bottom-line benefits to organisations. Whether it’s economies of scale, reliability, connectivity or access to markets, a carrier neutral data centre ticks all the right boxes on
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