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Opportunity Calling: Telecoms Answer with Managed Data Center Services

By: Kaylie Gyarmathy on November 13, 2014

Opportunity is calling for telecom providers, but they may not be getting the message.

According to Data Center Dynamics, a new study found that many telecommunication providers are spending between $100 and $300 million for every “campus-like” data center they build. Through 2019, the study predicts strong growth in areas like cloud computing, networking, and other managed data center services. But the telecommunications landscape is changing as VoIP and video push bandwidth and server density boundaries: does the “traditional” data center still make sense?

Pushing Their Buttons

Telecommunications companies now face an uncertain future, thanks in large part to recent Net Neutrality challenges. If current legislation stands, telecoms must worry about massive traffic volumes and falling profits — but if revisions pass, it could mean significant consumer backlash. Already, several popular websites are planning a “go slow” day to protest the redrawing of Net Neutrality boundaries.

This makes significant investments in the data center a bigger gamble than just a few years ago. But telecoms can't afford to fall behind — and that means thinking outside the box.

Virtualization is one option to increase data center agility without maximizing spend; according to Research and Markets, “the telecom provider is becoming more circumspect about bidding for large IT outsourcing deals. Instead they are providing partial outsourcing of individual applications or services using a virtualized on-demand platform.” Research says invest; real life says total cost of ownership (TCO) could become a problem. Is there a middle ground?

No More Hang Ups

Telecom providers must now determine how they can best operate on “the edge” — providing national service while maximizing the benefits of staying local.

According to an August 22nd report from Research and Markets, colocation is the answer. The report predicts that the retail colocation market in the United States will grow at a compound annual growth rate (CAGR) of 17.44 percent over the next four years as companies “need to reduce the capital and operational expenditure associated with provisioning of computing infrastructure and services.”

So how can colocation help telecoms providers — or any large enterprise — looking to improve TCO and inch ever closer to the ideal edge data center? It starts with going small. For example, data centers can be a subset of off-site hardware that companies own but are professionally managed, secured, and supported while seamlessly integrating with existing IT infrastructure.

As the telecom market evolves, providers face a difficult choice: spend big and hope for the best, or rely on managed data center services. But there's a new conversation starting, one that calls out expertly managed, next-generation colocation data centers able to improve telecoms' reach  by keeping their data local.

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