Demand for Colocation Services up in Germany, as Enterprises Seek Help With Complex Data Centers

ISG Provider Lens report sees German companies interested in hyperconverged systems and hybrid clouds

FRANKFURT, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Enterprises in Germany are looking to colocation providers to help them manage their data center needs and improve connectivity to their networks, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.

The 2020 ISG Provider Lens Next-Gen Private/Hybrid Cloud – Data Center Services & Solutions Report for Germany finds demand for colocation services increasing in the country, with enterprises’ own data centers no longer able to keep up with the upgrades and improved connectivity companies need.

The high cost of regulatory compliance and upgrades to existing company-owned data centers is driving the expansion of the colocation market, the report says. Colocation providers also can offer better security and high availability, and can set up networking services on short notice.

“The growth rate in the colocation industry in Germany is gigantic,” said Andrea Spiegelhoff, partner at ISG DACH. “Hardly a month goes by without a new data center announced or opened.”

Colocation providers also can offer enterprises savings on energy costs, even as electricity costs in Germany are among the highest in Europe, the report says. Data center operators are increasingly focused on being more energy efficient.

Large colocation providers also provide space for enterprise data centers to grow, the report notes. While data centers built in the past were in the 3,000- to 4,000-square-meter range, new data centers are often 10,000 square meters or larger.

With the growing demand in colocation services, new providers, including some from outside the country, are entering the German market, the report says.

The report also sees a growing demand for hyperconverged systems among German companies. Enterprises are embracing “cloud-in-a-box” hyperconverged product lines, and providers focused on storage and data management are partnering with providers of network virtualization and other services to offer hyperconverged systems. In addition, IT leaders continue to be concerned about where their applications will be hosted and maintained.