2024 Industry Trends, Growth and Innovation
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AI is an Accelerant to Colocation Adoption
More than three out of four organizations are considering moving AI-related workloads, including GenAI applications, chatbots, predictive analytics and augmented AI applications, to a colocation data center.
New research from Foundry (an IDG, Inc. company) reveals IT leaders' digital transformation plans to support critical workloads, including AI and high-performance computing. Data specifies colocation as essential to support hybrid IT infrastructure and highly interconnected digital ecosystems.
See How John Balances the IT Budget While Meeting High-Density Computing Needs
John is the Senior Director of IT at a U.S.-based biopharma company that is at the forefront of developing a groundbreaking drug for metastatic breast cancer. With over a decade of research and a new clinical trial involving more than 1,000 participants, the company relies heavily on AI and machine learning (ML) to streamline data analysis and trial recruitment.
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As the demand for performance-intensity computing grows, so do the costs. John’s current IT mix combines on-premises infrastructure and public cloud, resulting in unpredictable, growing data costs and the inability to meet workload demands. Company leaders are pressuring John to cut costs while maintaining the high-performance computing environment needed for life-saving research.
John assessed the biopharma company’s computing needs, company goals and his budget and recommended to company leaders a shift from a cloud-first approach to a “cloud-smart” hybrid IT environment that includes colocation data centers. John is like 98% of State of the Data Center respondents, who already have adopted or are planning to adopt a hybrid model.
CoreSite’s native cloud onramps and interconnection solutions provide low latency and reliability essential to researcher collaboration and delivering outstanding patient care throughout the trial. Direct connection to public cloud providers also cuts costs by reducing egress fees as much as 70%.*
INTERCONNECTION
Colocation offers predictable costs and helps assure company leaders about John’s effective use of his budget. Updating legacy on-premises infrastructure to meet modern workloads would be costly. By moving to a colocation data center, John can reduce capital and operational expenses.
CLOUD PREDICTABILITY AND SAVINGS
Colocation security measures protect sensitive patient data and proprietary research, addressing the company’s compliance concerns about on-prem and public cloud vulnerabilities.
SECURITY
High-density colocation solutions support power-intensive AI workloads, providing flexibility and scalability. Advanced cooling technologies deliver the environment essential for GPU servers while also improving energy efficiency.
SCALABILITY
John’s thorough research and data-backed strategy convince company leaders to adopt CoreSite’s colocation services as part of its hybrid IT mix. This strategic move not only cuts costs but also ensures robust performance and security, enabling the biopharma company to focus on its mission of developing life-saving treatments.
The Transformative Power of Colocation
Unlock key insights and statistics from the 2024 State of the Data Center report. Whether you're a seasoned professional or a newcomer, discover how colocation is shaping the future of data centers.
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*Costs savings are based on CoreSite cost comparisons using publicly available and private information and/or CoreSite customer reported costs savings and may not be indicative of the costs savings that may be experienced by every customer that switches to the applicable CoreSite service.
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Key Findings
Less than 1/3rd of decision makers said their colocation provider offers interconnection to a variety of cloud providers, even though interconnection is the No. 1 reason for using colocation.
Cloud Interconnection is top reason to use colocation
For the third year in a row, an overwhelming majority of CIOs say native, direct connection to the major cloud providers is vital for cost savings and predictability, enhanced security and optimized performance required to deploy a multicloud strategy.
DIRECT CONNECTION TO PUBLIC CLOUD IS A "MUST HAVE"
Survey results show that nearly all IT leaders have implemented or plan to implement a “cloud-smart” infrastructure, with colocation services providing interconnection among public cloud, private cloud and on-premises workloads.
It's a Hybrid IT World
98%
95%
3 out of 4
#1
Insights in Action:
IT Leader Journeys
JOHN's journey
Senior IT Director, Biopharma Company
Alex's journey
Senior VP of Operations, Bank
blake's journey
CIO, Retail Store Chain
cole's journey
IT Architect, Streaming Service Company
Learn About the IT Infrastructure Alex Needs to Deliver the Digital Experience Customers Expect
Alexandra, SVP of Operations at a family-owned bank in Boston, spearheaded a digital transformation initiative by launching mobile banking five years ago. Initially slow to gain traction, mobile banking adoption recently has exponentially surged.
The bank’s on-premises IT infrastructure isn’t making the cut to meet the demands of mobile banking adoption. Poor performance is negatively impacting the user experience, causing customer attrition and hindering the bank's ability to handle growing data volumes. Plus, the bank lacks IT operational expertise and personnel needed to manage its increasingly complex infrastructure. Alex wants to focus on providing customers with exceptional banking solutions, not infrastructure management.
Alex analyzed the IT infrastructure options that could help ensure her organization is ready for the rapid digitization of banking and financial services. She recommended a shift to a hybrid IT model to deploy workloads across on-premises, colocation and cloud. Like 95% of respondents in a State of the Data Center survey, Alex sees native, direct connection to major cloud providers as vital for cost savings, enhanced security and optimized network performance in a multicloud strategy.
By migrating their mobile banking workloads to CoreSite, Alex was able to reallocate resources and talent to business-driving initiatives. Relocating the company’s equipment into colocation enabled Alex to shift to an OpEx business model that creates budget flexibility for company leaders.
Talent and Resource Reallocation
CoreSite invests heavily in building and maintaining the physical security of their data centers and clients’ technology stacks. With measures like perimeter security, building entry screening, man traps and exceptional security teams, Alex can rest assured that confidential information, including customer PII, wouldn’t be physically breached.
Industry-Leading Physical Security
Bolstered by direct onramps to cloud providers and cloud interconnection, Alex and bank leaders can improve the mobile banking user experience and turn their mobile banking offering from a liability into a competitive advantage.
PERFORMANCE
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Leveraging a hybrid IT model and implementing an on-prem, colocation and multicloud strategy, Alex empowered the bank to turn its mobile banking from a liability into a competitive advantage. Leadership can focus on further digital transformation efforts, such as workload automation and personalized digital customer experiences. The bank is positioned to compete effectively in the evolving financial services landscape while ensuring data security and regulatory compliance.
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Discover How Blake Rises to the Expansion Challenges Ahead
Blake, CIO of a privately owned regional department store chain, is overseeing IT strategy for the company's expansion from the Mid-Atlantic into the Southeast, doubling its retail footprint. This expansion serves as a proof of concept for future growth.
While the expansion creates incredible opportunity, it’s not without challenges. Blake must evaluate his current IT infrastructure strategy of on-premises and cloud deployments to ensure his organization is ready for the future, which will include an exponential increase in consumer data storage needs and expanded interconnection requirements.
After researching data, trends and best practices, Blake recommends that his company adopt a hybrid IT strategy with a mix of on-prem, colocation and public cloud. Blake’s thinking aligns with the CIOs and other IT leaders surveyed in the State of the Data Center Report, which includes this finding: Cloud interconnection is the top reason for using colocation, yet less than 1/3 of decision-makers said their colocation provider offers interconnection to various cloud providers.
As the retailer expands, it will continue to use more computing resources – and need to store more data. The ease of scalability makes colocation a necessary part of the retailer’s growth strategy as it looks to accelerate digital transformation.
SUPPORTS SCALABILITY
By selecting a colocation provider that has native cloud onramps, the retailer can connect directly to its public cloud providers. The retailer can transfer large amounts of data at low cost, while ensuring the latency, security and quality of service required to delight customers.
Provides Direct Cloud Connection
As the retailer expands its geographical footprint, it needs to retain the capability to run customer transactions and access its data – no matter where it is located – easily and quickly. CoreSite’s Open Cloud Exchange®, enables his organization to establish interconnections with a few clicks and access digital platforms from all locations.
ENABLES INTERCONNECTION
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Blake’s decision to implement a hybrid IT solution with colocation enables the seamless interconnection across locations, direct connection to cloud service providers and efficient processing of large transaction volumes. This approach contributed to the company's most successful grand openings in its history. Blake’s board of directors now feels optimistic about the potential for more expansion, knowing their digital infrastructure is future-proof.
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Learn How Cole Creates a Distinct Advantage in a
Hyper-Competitive Industry
Cole, an IT architect at an entertainment streaming service, is tasked with optimizing the company's IT infrastructure to improve user experience and maintain competitiveness in a rapidly evolving industry.
The streaming service relies heavily on AI for personalized recommendations, content decisions and smooth playback. However, it has become very expensive for the streaming service to host all its workloads in public clouds. In such a competitive industry and increasingly digital world (streamers want to be able to watch their movies from anywhere on their TV, tablets or phones), every decision – including where to host assets and media platforms – can create a competitive advantage.
Cole is like most State of the Data Center respondents, who said they’ve considered moving workloads, including GenAI, predictive analytics and development/testing, from public cloud to colocation. Specifically, 75% of respondents say they are considering AI-related workloads from public cloud to colocation.
TECHNOLOGY SOLUTION
SITUATION ANALYSIS
BUSINESS OUTCOME
The streaming company works with a multitude of cloud services and digital partners, which creates workflow management complexity. With a highly interconnected colocation solution, Blake can help the organization effectively integrate with all the players in its digital supply chain while enhancing user experience.
eNHANCED cONNECTIVITY AND iNTEROPERABILITY
Rather than navigating the ups and downs of public cloud costs to deploy AI-related workloads, Cole and the IT team can work with CoreSite to more effectively predict and manage computing resource costs, despite fluctuations in computing resources due to changes in subscribers and content options. Controlling costs will help the company better allocate its budget, and the savings from switching from public cloud to colocation will enable the streaming service to green light a new, innovative project.
COST PREDICTABILITY
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By implementing colocation with its cloud deployments, the streaming service achieves better cost management. Blake’s recommendation has simplified data management for the IT team while maintaining the high-quality, personalized streaming experience that customers expect, which ultimately strengthens the company’s market position.
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TECHNOLOGY SOLUTION
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LEARN MORE ABOUT JOHN's journey
LEARN MORE ABOUT ALEX's journey
LEARN MORE ABOUT BLAKE's journey
LEARN MORE ABOUT COLE's journey
TECHNOLOGY SOLUTION
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DOWNLOAD THE FULL STATE OF THE DATA CENTER REPORT
DOWNLOAD THE FULL STATE OF THE DATA CENTER REPORT
DOWNLOAD THE FULL STATE OF THE DATA CENTER REPORT