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Growing data volumes and data centre complexity drive outsourcing

Tue 22 Jul 2014

Companies looking to manage an ever-growing amount of data without the hassle of running an in-house data centre will drive the sector’s outsourced services market to grow at 16% for each of the next few years.

That’s according to analysis from Frost & Sullivan (F&S) in its European Data Centre Services Market report which also observes that the maturing retail colocation sector will witness lower growth rates than managed hosting.

Retail colocation was worth $2.83bn in 2013 and F&S estimates it will reach $5.27bn in 2018 while managed hosting revenues will increase from $2bn to $4.90bn over the same period.

F&S says that momentum is being driven by a number of factors including the cost advantages of outsourcing as well the growth in cloud, machine-to-machine connectivity and content-heavy applications. The United Kingdom, Germany, France and Benelux will be the largest markets in the region.

“The pressing need to focus internal resources on innovative IT tasks and capitalise on economical IT management services compel enterprises to turn to managed hosting providers for data centre services,” says Frost & Sullivan analyst, Shuba Ramkumar.

“The growth of cloud services will also drive the colocation services market in the short term.”

In the long term, however, increasing efficiency and security of the cloud will challenge the growth of the retail colocation market she said.

Regional data laws will further complicate outsourcing decisions it says where the location of the provider’s data centres could become a factor. “The regional nature of European organisations also means that many of them are wary of foreign companies and prefer local providers. These cultural and language barriers are especially strong in countries such as France, Spain, and Italy,” says F&S.


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