Need a Data Center? Call Your Phone Company

Arthur Cole

If you want telephone service, you call the telephone company. If you want data center services, you call … the telephone company.

Telecoms around the world are getting into the managed data center services business in a big way, leveraging cloud-based virtual architectures to provide low-cost data environments for Fortune 500 firms and SMBs alike.

According to a new report by MarketsandMarkets, the telecom managed services market will nearly double to $22.5 billion by 2022, representing compound annual growth of 13.7 percent. Data center services will represent the largest segment of this field, driven largely by the rise of smartphones and tablets in the enterprise and consumer segments. With all that data hitting the enterprise, the need for infrastructure is rising at a faster pace than most organizations can provision and deploy internal resources, leaving telecoms and their vast network and data facilities as the only viable option.

Activity is expected to be particularly hot in the APAC region where digital services firms are emerging at a rapid clip and the legacy of on-premises infrastructure is not as strong as in the west. China Telecom Global (CTG) recently teamed up with communications service provider Global Switch and data center operator Daily-Tech to deliver a wide range of data, network and integration services to enterprise clients. The deal also gives CTG and its clients a means to tap into international markets through Global Switch’s data center holdings in Europe and North America.


Competition for those markets is expected to be fierce, however, as companies like Verizon look to shore up managed services portfolios. The company is planning to build 24 data centers in the U.S. and another 18 overseas, says SDX Central’s Sue Marek, utilizing a mix of edge facilities and central infrastructure co-located in established network hubs. This will allow the Verizon Cloud Platform to support a wide range of Big Data and IoT applications, as well as virtual network services in support of enterprise cloud and hybrid architectures.

And although some industry watchers may have scratched their heads last fall when Verizon sold off its cloud hosting and data center business to Equinex, it turns out the deal was more of a financial move than a comment on the managed services market. The two companies recently announced a deal in which Verizon will resell Equinex co-location and interconnect services to provide integrated data center, security, networking and advanced communication services to enterprise customers. CRN’s Gina Narcisi says the partnership allows Verizon to offer data center services without owning the actual infrastructure, while Equinex gains access to Verizon’s sales teams and massive customer base.

Consuming infrastructure as a utility has long been the dream of many technology pundits, and now that actual utility providers are getting into the game it looks like the vision is finally becoming a reality.

Traditional enterprises will no doubt continue to utilize a mix of on-premises infrastructure and cloud-based managed services, but for a new generation of digital enterprises, the idea of owning a data center may soon seem as quaint as owning a power plant.

Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.


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