2008 Colocation Industry Trends Report

Boston Irvine Louisville San Francisco

2008 COLOCATION
INDUSTRY TRENDS REPORT
Created From 2008 Colocation Client Survey Results

TABLE OF CONTENTS
The Survey Page 3
The Participants Page 4
Participant Company Growth Page 5
Why Companies Colocate Page 6
Expected ROI Page 7
Distance Page 8
Disaster Recovery Pages 9 and 10
Virtualization Pages 11 and 12
Green Page 13
Choosing Providers Page 14
Value of Colocation Services Pages 15 and 16
Who is Hosting.com Page 18
Additional Information Page 19

2008 Colocation Industry Trends Survey

THE SURVEY
Hosting.com proactively engages with clients and prospects to
effectively understand their business goals to build solutions that are
both client relevant and applicable. A core component of Hosting.com’s
client engagement strategy is the use of surveying tools.

The 2008 Colocation Industry Trends Survey was sent to colocation
clients of Hosting.com and other colocation providers throughout the
world.

The Colocation Industry Trends Survey was launched on August 7, 2008
and respondents had until September 5, 2008 to respond.

The survey was conducted and hosted electronically. The survey asked
approximately 30 questions and took between 6 and 10 minutes to
complete.

In sharing the results, Hosting.com will provide general demographic
information about respondents and the companies they represent;
however, Hosting.com will not reveal the specific identity of any
respondent or company.


THE PARTICIPANTS
212 Respondents
IT and Business Decision Makers
Over 20% were CEOs and Business Owners

Industries Included : Financial Services, Retail, Social
Networking, Healthcare, Manufacturing, IT Service
Providers, Marketing and Advertising, Non Profits,
City Governments, etc.

Number of employees ranged from 2 to over 100,000
31% had 10-99 employees
8% had over 1,000

Revenues ranged from <$1M to >$100B


RESPONDENT EXPECTED COMPANY GROWTH

24-Month Revenue Growth
11% Forecasted Revenue Growth of 100% or Greater
40% Forecasted 5%-20% Growth

Lead Generation
44% ; < 20% of Company’s Lead Generation is Web-Driven
10% ; 81%-100% Company’s Lead Generation Web-Driven

Web Presence
56% Expected Company’s Web Presence to Grow 25%
or More Over the Next 24 Months
16% Weren’t Sure


WHY COMPANIES CHOOSE TO COLOCATE
What factors most influenced your decision to colocate your data infrastructure?
Multiple selections were allowed

67% - Improve Availability/Reliability
49% - Improve Operational Efficiency/Performance
45% - Reduce/Eliminate Costs
39% - Scalability (Exponential Growth)
36% - Risk Mitigation
19% - Compliancy/Regulatory Requirements

Analysis: Improved performance, reliability and security at a lower cost dominated the responses of
participants. Colocating allows companies to achieve the benefits of redundant layers of security,
connectivity, and failover at a much lower cost than building their own data center.


DID WE MENTION REDUCED COSTS?
69% of Respondents Expect a Return on Their Colocation Investment

• Of those, 24% Expect to See an ROI Within 6 Months
• 40% in 12 months
• 29% in 2 Years
• 7% in 5 Years

Analysis: Brick and mortar investments, such as building a data center rarely have a measurable ROI.
Capital expenses for colocating are significantly lower than building a datacenter. When colocating,
companies may see an ROI in the form of increased uptime by using a more reliable solution, increased
client retention due to a higher quality of experience, eliminated expenses to build a data center, etc.

Colocation providers should proactively consult with their clients to understand the clients’ objectives for
colocating and to help them set achievable expectations with regards to cost savings and increased
revenues. For most companies, a 6-month ROI will be hard to measure and achieve.


14% – LONG DISTANCE RELATIONSHIP OKAY
What is the distance between your colocation facility and your office?

Distance Between Office
and Colo Facility Analysis: The majority of companies
want their colocation facility to be
within an hour’s drive of their offices.
This reduces travel costs, allows
companies more flexibility and
60% control, and provides IT personnel
<$10M peace of mind.
36%
Smaller businesses may be willing to
19%
14%
13% incur travel expenses to colocate in
3% less expensive markets to reduce
their total outlay.
0-10 11-25 26-100 101-250 250+
Miles Miles Miles Miles Miles


DISASTER – CAN WE RECOVER?
If your servers were “down” for 24 hours or longer,
the impact on your business would be catastrophic.

9%

Strongly Agree
24%
Unsure
Strongly Disagree
67%

Of the 67% that strongly agree –
• 20% do not have a Disaster Recovery (DR) and Business Continuance Plan
• 34% do not have a budget for DR and Business Continuance


DISASTER RECOVERY AND COLOCATION
Does your company have a strategic plan to provide disaster recovery / business
continuance in the case of an unforeseen emergency?
70% - Yes
Only 46% of respondents have a budget for DR
Types of Disaster Recovery Used
29% - Failover in a Different Geographic Area
12% - Intra-datacenter Failover Readiness
11% - High Availability and Failover in a
Virtualized Server Environment
10% - Used All of the Above
30% - Used Other DR Solutions or Unsure
Analysis: CEOs, CIOs, IT Directors and IT personnel agree that downtime often creates lost revenues.
Subsequently, companies have adopted “DR Plans” but often fail to appropriate adequate funding to
support those plans. Colocation providers that have geographically dispersed datacenters and provide
virtualized solutions may close this gap for companies that state they have or need a DR plan and their
ability to fund the plan.


VIRTUALLY UNCONVINCED
Does your company use virtualization technologies internally?
51% - Yes

Does your company use virtualization in its colocated data infrastructure?
32% - Yes

Virtualization Products Used

15%
VMWare
13%
Microsoft
56%
16% Xen
Other


VIRTUALIZATION IMPACT
To what extent do you believe virtualized solutions will reduce your
current data center space requirements in the next 24 months?

8% Expect a 10% Reduction
13% Expect a 25% reduction
21% Expect No Reduction
37% Were Unsure

Analysis: Increasingly, virtualization manufacturers and colocation providers target companies that
colocate their infrastructure for virtualized solutions. Only 40% of respondents foresee virtualization
having an impact on their datacenter space requirements, 21% expect no reduction and 37% are unsure.
Two major obstacles remain for virtualization providers; one, many individuals must be convinced that
virtualization can bring value (21%) and two, educating consumers that are unfamiliar with the benefits
of virtualization (37%) is still necessary.


DOES “GREEN” MATTER?
Does your colocation provider invest in green
initiatives to reduce it’s carbon footprint?
29% Yes
55% Unsure

Does a colocation provider’s green initiatives
positively influence your decision to use them as a
colocation provider?
46% Yes
54% No
Analysis: It is estimated that data centers use 1.5% of all power consumed in the US. It is imperative that
they take the lead in reducing their carbon footprint with high-efficiency servers, optimized
power/cooling solutions, using alternative energy sources, green building practices, etc. The ability to
positively impact 46% of your prospects and clients through green initiatives is significant.
However, while colocation providers may see increased revenues and brand loyalty as a result of green
initiatives, but neither should be a catalyst for adopting practices to reduce their carbon emissions.


HOW PROVIDERS ARE CHOSEN
Rank these seven items, in order of importance, to your company when
selecting a colocation provider

Most Important When Choosing a Colocation Provider
78%
61%
44%
37%
32%
31% 31%
21% 17%
13% 7% 5% 5% 2%

Ranked #1 Ranked in Top 3


VALUE IN SERVICES?
Respondents were asked to rate the value of service options that colocation
providers offered. They were rated between 1 and 10; 10 was the highest rating.

All Responses
(Data Explanation on Next Page)

10 9 8 7 6 5 4 3 2 1
Remote Hands 24% 14% 16% 10% 5% 13% 3% 4% 3% 1%
Firewall Monitoring
12% 12% 21% 9% 8% 9% 5% 6% 7% 3%
and Maintenance
Hot Swap 14% 9% 16% 17% 6% 12% 4% 6% 7% 2%
Hardware Monitoring 13% 9% 17% 12% 7% 15% 5% 8% 4% 4%
Application Monitoring 8% 6% 11% 10% 8% 17% 3% 6% 11% 4%


SERVICES DATA TRANSLATED
To simplify the value of offered services we categorized the responses as follows:
A 1, 2, or 3 Signifies Low Value Offering to Colocation Clients
A 4, 5, 6, or 7 Signifies Moderate Value Offering to Colocation Clients
A 8, 9, or 10 Signifies High Value to Colocation Offering Clients

24% Rate a 10
53%
44%
39% 39%
25%
21% 16% 16%
15% 8%

Low Value High Value


ANALYSIS
Bandwidth, Security and Redundancy are the three most important factors for most
companies when choosing a colocation provider. These items are also the most cost
prohibitive for companies building their own data centers. 100% of respondents
listed a combination of two of these three items in their top three considerations.

In addition, colocation providers with multiple data centers can more easily provide
cost effective solutions to provide higher levels of redundancy, geographic
failover, and bandwidth routing optimization.

Increasingly, colocation clients and prospects are interested in managed services
provided by colocation providers. This is a change from traditional colocation clients
that did not want anyone to touch their infrastructure. Small and medium
businesses choosing to colocate are looking to reduce costs and the management of
the technology that allows them to accomplish their business objectives.
Respondents rate “Remote Hands as a Service” as the most valuable service option
offered by colocation providers.


WHO IS HOSTING.COM
Hosting.com provides enterprise colocation, cloud computing, dedicated hosting, managed
hosting, disaster recovery and business continuance services to a global customer base
demanding a high level of security, reliability and responsiveness. Hosting.com
monitors, manages, and enhances the web based platforms of Web 2.0 companies, software
as a service providers (SaaS), content distribution networks (CDN), and medium to large
enterprises whose web presence is crucial and high availability mandatory.
Hosting.com currently operates SAS 70 certified data centers in Louisville, Kentucky;
Irvine, California; San Francisco, California; Boston, Massachusetts, and is currently
expanding into Silicon Valley and Northern Virginia.
For more information, please visit www.Hosting.com or call the company at 800-446-7627


MORE ANALYSIS
All questions and responses were not included in this survey. Omitted questions
include questions on projected growth in power requirements, colocated data
storage solution usage, when DR budgets are expected to be created, virtualization
impacts over 12 and 36 months, etc.

If you would like to schedule a personalized, in-depth analysis of this information
for your organization, please email AHollobaugh at Hosting.com to schedule an
appointment.

Hosting.com will be coordinating webinars to share this information with
interested parties in November. All individuals that download the e-book will be
informed of theses dates.

Visit www.Hosting.com for more information about Colocation Services and
Solutions provided by Hosting.com


2008 Colocation Industry Trends Report

Empfohlen

Empfohlen

Weitere ähnliche Inhalte

Was ist angesagt?

Was ist angesagt? (20)

Ähnlich wie 2008 Colocation Industry Trends Report

Ähnlich wie 2008 Colocation Industry Trends Report (20)

2008 Colocation Industry Trends Report