Earlier this month, Zahl Limbuwala of Romonet predicted a catclysmic consolidation of colos. Various players from the industry have responded - and one of the most cogent came from Tony Greenberg, CEO of sourcing advisory company RampRate.

Limbuwala warned anyone investing in colocation providers, that the market is not a real estate business, and faces issues including the depreciation of technology, and competition from services in the cloud - which are simple to migrate to. The writing is on the wall for colos, he warned and suggested they come up with a different plan.

Don't panic - things may be worse!
Greenberg's response, on the RampRate blog is interesting. Rather than refute Limbuwala, he starts by pointing out several ways in which the situation is actually worse than the Romonet CEO says.

Limbuwala warns that colo is not a property business; Greenberg says it's not even close: "The idea of 'sweating their asset' is now beyond wrong – it’s delusional," he says, explaining that most of the value of a property is now tied to power.

Supply and demand is impossible to predict, warns Greenberg, and the cloud destroys the one thing that colocation providers could reply on - the barriers and inertia which make customers stay put.

Signs of hope
But Greenberg does find some reasons to be cheerful. Firstly, changes are always slower than the visionaries predict, and there will always be some business from companies that lag: "For every customer orchestrating workloads between clouds, there’s more than one that needs a solid support deal for his mainframe," says Greenberg.

Secondly, as he says "the devil is in the details". There is still plenty of small print in the cloud, and sometimes colo will still be better, he says.

Thirdly, there are still big surges of demand coming, for the Internet of Things and Big Data, among others. Just supplying their share of these needs should give colos plenty of business for the short term.

What to do
But what should you do to survive the coming difficulties? That depends who you are, says Greenberg.

If you are operaging an in-house facility, you should modernise it, repurpose it, and be ready to sell it if necessary. 

If you are a provider with sunk costs in an older facility, you should get the best deals you can on power, and join the cloud so your customers can benevit. Allowing customers to hybridize is infintely better in the long run by trying to keep them by making migration harder, he says.

New providers should get the best deals they can on power - and then find somethign they can specialize in, whether that is having the best PUE, or the highest density, or the lowest latency. "This is not a world for also rans," he warns.

And finally, anyone who is thinking of just putting money into this market by investing, he has one piece of advice: "Doubt everything and everyone before signing the check."

It's not a very rosy picture, but Greenberg still believes that this crisis might just be an opportunity.