The CoreSite 2024 State of the Data Center Report sheds light on the rapidly evolving landscape of IT infrastructure where hybrid IT models and colocation play an increasingly pivotal role. With a growing dominance of AI workloads, organizations are rethinking their strategies to create more efficient and cost-effective IT environments. This comprehensive report outlines key trends, strategic shifts, and emerging practices that are redefining how IT infrastructure is managed today.
The Rise of Hybrid IT Models
The trend towards hybrid IT models is gaining momentum, with 98% of organizations either having adopted or planning to adopt this flexible approach. This shift represents a significant departure from traditional IT infrastructure, moving towards solutions that combine the strengths of cloud, colocation, and on-premises resources. The need for seamless cloud connectivity to manage resource-intensive AI applications is a key driver behind this trend. As organizations strive to optimize their IT ecosystems, they increasingly recognize the importance of utilizing multiple environments to cater to evolving demands and technologies.
In 2024, 60% of organizations are utilizing a hybrid IT model, up from 55% in 2022. This increase underscores the recognition of hybrid IT’s benefits, such as operational efficiency, cost-effectiveness, and the capacity to leverage multiple IT environments in a synergistic manner. As AI and machine learning workloads become more prevalent, the adoption of hybrid IT models is expected to continue its upward trajectory. Hybrid IT models offer the best of both worlds, blending the agility of cloud services with the control and security of colocation and on-premises solutions. This strategic mix enables organizations to fine-tune their IT operations to meet specific workload requirements while maintaining flexibility for future expansion.
Colocation’s Role in the Modern IT Strategy
Colocation has emerged as a crucial component of the hybrid IT strategy, especially as organizations begin repatriating workloads from public clouds back to colocation data centers. This trend is particularly prominent for workloads related to generative AI applications, business intelligence, data analytics, and IoT connectivity. Initially, the public cloud was a quick solution for upgrading legacy technology, but as workloads mature, the high costs of public cloud services are driving organizations to seek more sustainable solutions like colocation. The predictable costs associated with colocation make it an attractive option for long-term planning and budgeting.
CoreSite president and CEO Juan Font highlights the “cloud-smart” approach that organizations are adopting. This strategy involves a balanced mix of cloud and colocation to optimize performance and cost. Colocation provides predictable costs, superior data and broadband savings, enhanced physical security, reliability, scalability, and the necessary performance to maintain a competitive edge. These advantages make colocation a formidable alternative for organizations looking to balance cost and efficiency in their IT operations. Font stresses that a cloud-smart approach does not merely react to current needs but also anticipates future trends and demands, setting the stage for sustained competitiveness in an ever-evolving digital landscape.
AI Workloads Drive Colocation Adoption
The increasing prevalence of AI workloads is a significant factor driving the adoption of colocation. The report indicates that many organizations are moving their AI-specific workloads from on-premises to colocation facilities. For instance, 91% of respondents are considering relocating generative AI applications, 81% are looking at chatbots, and 79% are focused on predictive analytics. These movements underscore the performance and cost benefits colocation offers for AI workloads. The demanding nature of AI applications requires substantial computational power and storage capacity, which colocation data centers are well-equipped to provide.
Despite the criticality of cloud interconnection, the report reveals a surprising gap in current colocation offerings. Only 31% of respondents indicate their colocation provider offers interconnection to various cloud providers. This gap presents an opportunity for colocation providers to enhance their services to better meet client needs, given that cloud interconnection is a primary reason for using colocation in nearly half of the 22 workloads surveyed. By bolstering their interconnection capabilities, colocation providers can position themselves as indispensable partners in the hybrid IT landscape, offering seamless integration with cloud services and enabling organizations to harness the full potential of their IT strategies.
Shifting Workloads from Public Cloud to Colocation
The report underscores a clear trend: Organizations are increasingly moving workloads back from public clouds to colocation data centers. This repatriation spans a range of applications and tasks, including AI, business intelligence, data analytics, and IoT management. Initially, the public cloud’s appeal lay in its ability to rapidly upgrade legacy systems and capabilities. However, as these workloads grow and mature, the associated costs of public cloud services are prompting a reevaluation. Organizations are finding that colocation offers a more predictable cost structure, along with enhanced control and security for sensitive data and critical applications.
Juan Font affirms that organizations adopting a cloud-smart approach benefit from predictable colocation costs, robust data and broadband savings, and enhanced security and performance. These elements are crucial as enterprises seek to balance cost efficiency with high performance, making colocation an attractive option. The emphasis on cost predictability and performance is particularly vital as AI and machine learning require considerable resources. By aligning their IT strategies with the strengths of colocation, organizations can ensure that their operations remain agile, secure, and financially sustainable in the face of growing demands.
Navigating the IT Infrastructure Evolution
The CoreSite 2024 State of the Data Center Report illuminates the fast-changing realm of IT infrastructure, highlighting the increasing significance of hybrid IT models and colocation. As artificial intelligence workloads become more prevalent, companies are reconsidering their strategies to develop IT environments that are both efficient and cost-effective. This detailed report delves into essential trends, strategic alterations, and new practices that are revolutionizing the management of IT infrastructure today.
Among the key trends identified, the rise of AI is compelling organizations to upgrade their data centers to handle the increased computational demands. Hybrid IT strategies, which combine on-premises, colocation, and cloud services, are becoming the norm as they offer greater flexibility and scalability. Furthermore, the report underscores the importance of edge computing, which enables faster data processing by reducing latency.
In conclusion, the CoreSite 2024 report provides invaluable insights into the evolving IT landscape, illustrating how organizations can adapt their infrastructure strategies to meet future demands efficiently.
