Jan 10, 2012

Managed Hosting services on the rise: 4 drivers for growth

Ansley Kilgore

Managed hosting services are gaining popularity in the IT community. With growth rates in managed hosting for the North American and European markets estimated in the mid-teens to low 20% range through 2013*, you have to wonder what are the drivers causing this demand?

IT Infrastructure Costs
Most data center equipment has an average lifespan of three to five years. For instance, batteries should be replaced every two to three years, servers every four years and so on. In addition to simple wear and tear, the rate at which technology is advancing is also driving equipment replacements. What this means for companies is a constant technology refresh, which can add up over time. Managed hosting eliminates the need for purchasing your own hardware, removing you from the refresh game entirely.

Limited Data Center Space
Demand for data center space has been pretty steady according to an article from Data Center Knowledge**, however, the supply of space has become a problem. At the national level, the pending demand for data center space may be three times greater than the available supply of quality space, according to Jim Kerrigan, the director of the data center practice at the real estate firm Grubb & Ellis. There is a huge gap between data center space demand and supply, and it’s only projected to grow.

Limited Power and Cooling Capacity
The need for additional power and cooling is also a huge driver for companies looking for data center services. The average data center in the U.S. is 11 years old, and companies are having a harder time finding facilities with adequate capabilities to support demand. Under this circumstance, ease of scalability comes into question because a majority of data centers simply weren’t designed for the increased usage of power and cooling. In a managed hosting relationship, many issues of scalability, including power and cooling consumption, are decreased because the provider now bears the burden to expand based on the customers’ needs.

Lack of Qualified Personnel
As data center demand remains steady, many companies are seeking skilled staff and are having trouble finding qualified people. In a recent presentation at Data Center World, Richard Sawyer, a principal of HP’s Critical Facilities, noted that despite huge job losses, more than 2 million jobs remain unfilled in the United States. “These positions are valuable, and there’s no funnel to get trained workers into the data center industry,” says Sawyer. Training is a huge issue because of the specialized nature of data centers and the range of skills required to operate them. In a managed hosting environment, the staffing of personnel is left to the provider.

Managed hosting has many benefits for businesses across a variety of industries. Download our Managed Hosting Buyer’s Guide eBook to learn more.

*Tier One Research Group: Global Managed Hosting Market Overview 2011
**Strong Data Center Demand Seen for 2010, Data Center Knowledge

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Ansley Kilgore

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