New Business Models and Product Offerings for Colos, Multi-Tenant and Hosting Data Centers

The demand for colos, MTDCs and hosting data centers is set to increase over the next few years as more and more Enterprise IT is outsourced or obtained through cloud services or infrastructure as a service. As space and power have been commoditized, being able to differentiate with new business and financial models, as well as a well-defined product and service portfolio, will be a crucial success factor.  Data center providers need to be able to differentiate through value-added services if they are going to gain any share of this growth in a fiercely competitive market. Anticipating demand and, more importantly, how to ensure you can exploit demand with the right products and services more effectively than the competition, can mean the difference between success and failure. Gartner Analyst David Cappuccio summarized this as following “Change the perception of the data centerentre to a provider that delivers services – not just iron.”

From a customer’s perspective, value is determined by the service quality and associated delivery parameters as well as a clear presentation of the options available (i.e. available variants – such as space, power, storage, connectivity, 3rd party services, hybrid options, version of IP, access, security, remote hands, back-up, etc.), performance parameters, contractual terms and pricing. The MTDC and hosting provider must be able to deliver these services and products with a standardized level of quality, at clearly defined prices, and with defined service levels in order to win in a tough competitive environment. We will see a product-orientated approach overtake the traditional project focused response – and see more providers using product catalogs to present the services that are available and can be delivered to the customer.

A strong focus in terms of the market potential of new products in particular is on data center intra- and inter-connectivity services. The connectivity offerings have become the decisive differentiation criterion in the tough competition environment and the purchasing argument for many customers. Network managers, infrastructure managers and product managers in data center providers are facing two main challenges. The structure of processes in operation must be changed through the introduction of new connectivity products. At the same time, the complexity in service delivery will increase.

Intra- and inter-connectivity services must be efficiently managed from an operational point of view. This is about the management of the physical resources (cable management, switching jobs, cross connections, MMR cabling, etc.), but also the connections at the logical level through the network (WDM, SDH, IP / MPLS). This means that the highest quality has to be provided at the lowest possible costs, the provisioning times have to be minimized, and fast reaction times (fault analysis) must be ensured in the event of an incident.


In the future, typical tasks from communication service providers will become more and more relevant for high-quality data center services. Process automation with appropriate software support is indispensable. In addition, data center providers’ products and service portfolios are becoming more and more extensive due to the market requirements and the need for competition differentiation. This dynamic in the portfolio as well as the need for change must be managed.

In addition to the current issues in connectivity management of data centers, there are also new challenges in classical data center topics, since the requirements and expectations of customers have changed dramatically. The trend of customers’ expectations is leaning towards increased transparency in the providers’ infrastructure. Indicators and data on operating conditions (such as temperature values, power consumption, etc.) have to be provided in real-time or at well-defined dates based on customer portals and information platforms. Based on these, customer platforms provisioned and actual power used can be compared. In order to provide such customer information platforms, all used systems have to be optimally interlinked to measure the data points and to provide a consolidated overview of all relevant key indicators of the customer-related infrastructure. All data must be provided and consolidated in a central database from the underlying infrastructure systems and should be placed in relation to the customer contracts, agreements and service levels.

The ColoCONNECT Days are the local meeting points for the MTDC and hosting provider industry, offering expert lectures and networking among industry peers with a focus on the topic:

“Managing the Expanded Product Portfolio – Opportunities and Challenges in Realization and Operation.”

Share This