The colocation market is booming. As remote working and remote learning became the new norm over the course of the pandemic, the demand for new digital platforms and interconnection has grown exponentially. IT solutions needed to store and analyze large quantities of data have also driven healthy growth in the colocation market for private and hybrid cloud services. Nearly every industry, including healthcare, finance, e-commerce, robotics, government agencies, and enterprises, relies on flexible colocation services based on cutting-edge technology.

With global competition and rising customer expectations, operators need to set themselves apart from the competition, boost customer satisfaction, secure new income streams, and achieve greater cost efficiency – all at the same time. Many are extending their business models beyond retail customers to serve hyperscalers. New players, such as network operators, are entering the arena and consolidation is gathering pace.

As space and power have been commoditized, colocation providers must differentiate with new products and compelling services in order to stand out in today’s crowded and hyper-competitive market. In addition to stability and security, operators must offer innovative network connections, deliver connectivity services fast and efficiently, and provide a state-of-the-art data platform to handle management. Building faster, carving out a distinctive profile, and reducing costs all require a central network and asset database from which teams can plan, manage, and document the network and communications infrastructure.

Three success factors for colocation operators

Keeping pace with digital transformation, offering innovative services, understanding what customers want, and managing capacities efficiently all play a role in determining the success of a colocation provider in today’s market and require three key elements:

1) Operational efficiency and customer satisfaction

It’s no longer acceptable for provision of a service to take several weeks. However, because information is frequently still held in multiple locations, many colocation operators take too long to analyze available capacity, prepare a quotation, and then deliver the service. They often know exactly how much power is being used, for example, but not by which customers.

Colocation provider teams are also often unable to state exactly when a customer contract expires and what the effect of that on electricity consumption will be, making it impossible to alert sales staff in a timely fashion and to plan effectively.

For greater visibility, a single pane of glass is needed. An overview of the relevant information from multiple sources within a unified dashboard will enable teams, from planning to sales, to access the current status and available capacity at any time. From this transparency, operational efficiency and optimized management, coupled with lower costs and improved service, will be realized. More effective collaboration boosts customer focus and gives businesses a decisive edge in today’s highly competitive market.

2) Connectivity and value-added services

While the $45 billion colocation industry shows no signs of slowing down, market share cannot be won today solely by offering space and power. Interconnectivity is equally important for colocation growth – for operators and their customers alike. A Forrester study identified interconnectivity of data centers as one of the primary advantages of the carrier neutral colocation model and highlighted the importance of robust interconnection roadmaps.

While interconnectivity is crucial, what matters most to customers is fast connection times and value-added services. Colocation operators must reduce the time needed for patch planning from hours to minutes via automated process support, with patches being implemented with minimum delay. This can only be ensured through rigorous service design and provision, for example, by way of a service catalog. This approach offers optimum support for sales teams and allows technical teams to streamline planning and delivery.

Further benefits include the seamless documentation of the services offered and those booked by a customer.

3) Unified resource management

Data is the new fuel – not just as input for customer applications, but also for colocation operators. With the right data platform, colocation operators can support sophisticated capacity management and simultaneously analyze and optimize ongoing contracts, enabling them to provide customers with new services quickly. Ultimately, data drives revenues and efficiency.

Comprehensive and detailed data from colocation providers also enables customers to plan their own business better. As all data including assets, consumption, and contracts can be accessed via a single portal, customers can easily extract the insights needed to make informed decisions and improve business operations. This information comes from a wide range of sources and a variety of different locations, such as a billing management system, another monitoring tool, or a CRM application, then is harmonized and delivered to the right recipient.

A portal that builds on existing data resources not only meets the wishes of many customers, it also brings benefits for the colocation operator, who can then “outsource” its own services to customers and reduce risk. Software-defined networking (SDN) with virtual meet-me rooms that access harmonized data also saves internal costs and accelerates day-to-day business – assuming digital management and planning of connections works smoothly.

Next generation colocation management

Overall, in order to become a driver of digital transformation and capitalize on exciting opportunities ahead, operators first must make sure that their network can withstand the added pressure of new customer demands. Implementing a data center infrastructure management (DCIM) solution can improve network transparency, streamline processes to provide high-quality services at lower costs, and consolidate data from multiple sources, locations, and technologies into one central tool.

Additional benefits for colocation providers utilizing a DCIM tool include:

Increased Customer Satisfaction

Tenants favor a multi-supplier approach but are loyal to their primary provider. You can secure preferred status by leveraging state-of-the-art reports to always deliver the expectedlevel of service.

Finding new revenue streams

The right management software can help transform and upgrade your infrastructure to enable a broader portfolio of service offerings, specifically connectivity and customer-centric services.

Standing out in a crowded market

The ability to meet changing demands for value-added services will tip the scale in your favor when customers are comparing options.

Operating more cost-effectively

Infrastructure management software can automate service delivery to significantly improve efficiency and reduce costs, one of the primary drivers for shifting workloads into colocation.