Vertiv, formerly Emerson Network Power, has released the results of an online survey of 226 U.S. enterprise data center managers regarding their use of colocation services and their future needs for services. Respondents indicated that future IT application deployments will become more diverse and complex and that they seek colocation providers that can quickly scale capacity when needed, provide edge connectivity and offer price transparency.

For this survey, the term "colocation" included multi-tenant data centers, off-premise computing, managed hosting and cloud hosting data centers. The survey addressed organizations that ranged in size from more than $1 billion to under $10 million in industries such as financial services, education, manufacturing, healthcare, government, professional services and telecommunications.

Sixty-five percent of respondents said that their organizations are using colocation data centers or will use them within the next 12 months. Among current users, most are recent adopters, with 64% indicating that have used colos five years or less.

The survey’s key findings include:

• Colocation providers must prepare to meet new demand. Fifty-seven percent of enterprise companies indicate that they will increase their usage of colocation and cloud hosting data centers within the next two years.

• Colocation providers must be able to quickly support customer scalability. Improving capacity scalability is the number one reason customers move to colocation, followed by carrier diversity and latency so providers must ensure flexibility in their IT and infrastructure deployments.

• To achieve growth, colocation providers must go up the value chain, offering diverse services to support growth. Forty-seven percent of enterprises use more than one type of data center, and 52% include colocation in their mix. IT capacity deployments have become increasingly diverse and complex, and colocation providers must build and scale to support a variety of deployments, with high levels of security and at a competitive price.

• Adoption of colocation services is being constrained by concerns over cost, security, and internal staffing bandwidth. The move to colocation services is rife with complexity for managers outsourcing applications to off-site locations. It often requires new change management procedures, redeployment of IT personnel and changes in security processes and compliance. Forty-five percent of respondents cited cost among their top three challenges in moving more applications to colocation. Thirty-one cited security concerns and 18% cited internal staffing-constraints. Smaller companies were constrained more by staffing, while larger companies were constrained more by the challenges of migrating cloud services and meeting compliance requirements.

• Pricing models are complex and colocation providers must demonstrate greater price transparency. Colocation users cited more than 20 combinations of services used in pricing colocation contracts. Pricing is the biggest complaint of colocation customers, and providers can demonstrate higher value if they provide transparency in how they structure their SLAs around power and capacity usage and how they monitor and meter usage.

“The colocation market is going through substantial change, as providers seek ways to cost-effectively meet customer needs that are growing in complexity and scale,” said Amy Johnson, Americas vice president, marketing and strategy for Vertiv. “Vertiv believes that innovations in data center power, cooling and infrastructure management can help colocation providers operate at peak performance by reducing operational costs, eliminating stranded power and cooling capacity, support scalability and provide greater insight into data center conditions and operations. This in turn can help colocation providers improve customer SLAs so they can better serve their customers.”

To review the full findings of the Vertiv Colocation Data Center Usage Report, please visit here.