The changing face of colocation: Winds of change – and new challenges
Justin Jenkins is Chief Operating Officer, Europe and President, UK at Vantage Data Centers, a leading global provider of hyperscale data centre campuses serving the world’s well-known hyperscalers, cloud providers and large enterprises. He has a wealth of IT and data centre industry experience including more than 10 years at Next Generation Data (NGD) where, as an original member of the senior management team, he was latterly Chief Executive Officer. He previously served as NGD’s Managing Director and prior to that COO and CTO. Before joining NGD Justin held IT and Infrastructure roles at various technology businesses including Sony Computer Entertainment.

Arguably the roots of the ‘colocation’ market can be traced back 20 or more years ago to the original dot com boom era. This created demand from eCommerce businesses and ISPs for a more cost-effective way of the housing of their growing ‘server farms’ and the idea of sharing secure IT spaces with others was born.

These days colocation is maturing – and based on our own experience at Vantage Data Centers – the needs of colocation customers have evolved. The value proposition appears on first pass to be the same as ever: secure hosting, processing and storing data. However, much has and is changing beneath the surface and is redefining what users expect from colocation. Hosting often complex private and hybrid cloud environments is a good example. Moving forward, older, smaller, and increasingly power strapped facilities will therefore find it increasingly challenging to compete for the colocation business of today’s more sophisticated buyers.

Colocation data centres are not commodities. Of course, cost will always be an important factor to users, however, it is not the overriding decider. Enterprise users, service providers and SIs are now far more demanding in what they need and expect from their colocation providers. Knowledgeable and discerning buyers now demand hard evidence of data security and environmental compliance; commitment to renewable energy sources; forward power availability; multiple connectivity options; uptime track records; and iron clad SLAs.

Winds of change

Stepping back there have been various drivers for change over the past two decades, most notably concerns over data location and security following 9/11 in New York and 7/7 in London; advances in networking technology; more sophisticated remote diagnostics; and significant reductions in connectivity costs.

Enterprise organisations, systems integrators and service providers now have far greater choices in terms of physical data centre location – no longer being limited to facilities in the London Docklands/M25 area due to lack of high-speed fibre elsewhere. A few operators, including Vantage, have succeeded in establishing very large purpose-built colocation facilities in UK regions where real estate and labour is considerably less expensive. While this translates into lower rates for users, of equal importance, those built in more rural areas are also out of harm’s way with significantly lower risk profiles than major metropolitan alternatives.

New challenges

Today, the colocation data centre industry faces challenges as a consequence of the exponential growth in cloud computing along with IoT-driven big data and HPC requirements. These are making unprecedented demands on data centre technical infrastructure, power, cooling and connectivity. With this, there is a major requirement, quite correctly, for sustainability including commitment to renewable energy usage.

With the cloud and the huge demand for ‘as a service’ subscription models such as IaaS, SaaS and PaaS, enterprise companies have increasingly realised that they need many different types of cloud services to meet a growing list of user and customer needs. For the best of both worlds, hybrid cloud is increasingly popular. It offers a private cloud combined with the use of public cloud services which together can create a unified, automated and well-managed computing environment. This is attractive to organisations requiring the flexibility, cost savings and elasticity of public cloud services while still retaining control of sensitive applications and maintaining compliance.

But aside from the considerable power to rack considerations, hybrid cloud environments are only as good as the weakest link: the public cloud’s connection to the data centre. This has led to some colocation data centres bypassing the Internet with cloud gateways, allowing faster, more secure private connections directly into global public cloud network infrastructures. However, only a few colocation data centres are directly connected to these networks for enabling optimised performance and very low latency.

Another key factor to consider is a data centre’s level of engineering competence, necessary not only for configuring and interconnecting these complex hybrid environments, but also for helping businesses bring their legacy IT into the equation.


Big data and the Internet of Things are major contributors to the High-Performance Computing (HPC) requirements of both commercial and not-for-profit sectors. These environments demand power, cooling and connectivity to support clusters of very high-density server racks, some pulling as much as 60 kWs. With this, Vantage Data Centers has focused on ensuring its campuses, including CWL1 (formerly NGD) near Cardiff, are fully capable of supporting customer HPC installations.

There are currently very few colocation data centres with this capability in the UK due to the abundant levels of power required, let alone direct to grid connections for reducing the potential of outages. As a work around, most facilities must put in place UPS and auxiliary power systems capable of supporting all workloads running at the same time, along with overhead and enough redundancy to deal with any failure within the emergency power supply system itself. This and the specialist cooling needs of HPC are a tall order for many providers today, and as result, most are unable to address this high-growth market opportunity without significant upgrading.

In summary, the colocation data centre business has evolved into something altogether more complex than two decades ago. To remain at its forefront now requires substantial investment as well as innovation and agility to be able to adapt to continuously changing customer needs.

Interested in hearing industry leaders discuss subjects like this and sharing their experiences and use-cases? The Data Centre Congress, 4th March 2021 is a free virtual event exploring the world of data centres. Learn more here and book your free ticket:

Tags: colocation, data centre, hpc, Hybrid Cloud, Vantage Data Center

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