Today’s data center is no longer simply about providing rack space for network equipment and
power. It’s a place where a business can offload specific applications into a public, private or
hybrid data center hosted cloud environment.
A big driver in this new round of data center growth is the ongoing movement by businesses to
outsource various IT functions to a third party. According to a recent Gartner Research report,
worldwide spending for IT outsourcing services is forecast to reach $251.7 billion this year, up
2.1 percent from 2011.
The landscape of data center industry players is also changing. Traditionally led by specialist
players such as Equinix, traditional large telcos including CenturyLink (NYSE: CTL), Verizon
(NYSE: VZ), TDS (NYSE: TDS) and Windstream (Nasdaq: WIN) are establishing a place in the data
center and colocation domains via targeted acquisitions.
Fran Shammo, CFO of Verizon, said during the recent 15th Annual Oppenheimer Technology,
Internet and Communications Conference in Boston that more businesses are warming up to
the idea of putting their applications into their cloud as a way to reduce their IT costs.
“You’re not going to move everything to a cloud because there are certain things you want to
hold to the vest, but there are other things that are not strategic to your business that you can
get a 10-30 percent reduction in cost,” he said. “That’s the easy piece.”
While the scope and focus of the services these providers offer differ, traditional service
providers are seeing an opportunity to differentiate themselves by offer a host of data center,
cloud and managed services solutions that they can tailor to meet an individual business’
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