The Customers Have Spoken: Colocation Providers Can't Ignore Sustainability Demands

The topic of sustainability isn't new to the colocation industry. Many companies are declaring net-zero targets, going public with carbon footprint goals and generally being responsive to the sustainability trend. 

By 2025, it is projected that more than 80% of businesses will transition from traditional data centers to cloud-based or third-party colocation data centers, which allow more convenient and secure access to data in a virtual environment. 

For colocation providers, however, a sustainability trend they may not be anticipating looms large.

“Their customers are also evolving their businesses to meet their own specific sustainability goals,” Schneider Electric Senior Vice President of EcoStruxure Solutions Kevin Brown said. “This development will have a knock-on effect on the colocation providers.”

Most companies operate a hybrid IT architecture, and chief information officers now depend on distributed sites and edge data centers, in the cloud and in colocation facilities. As chief information officers grapple to understand the expanding carbon footprint and energy consumption of these sites, new challenges will emerge that demand more data and more insights.

Strong evidence exists that CIOs are already choosing their providers based on sustainability. Schneider Electric, a global specialist in digital automation and energy management, commissioned a study from Forrester Consulting in which more than 75% of colocation providers surveyed reported they lost business or investments because they didn’t have a sustainability plan in action. Additionally, 83% said they used a sustainability model as a way to attract new business and retain employees. 

But there are more long-term implications that colocation providers will have to anticipate, according to Brown. 

“CIOs will require resilient, secure and sustainable hybrid IT infrastructure, and that will require the CIOs to have more insight into the colocation provider’s operations to meet their own goals,” Brown said.  

For example, tenants may not accept self-reported data on emissions and energy use. Brown said they will likely demand to know where the energy is coming from, how much they actually consumed and what the variances were in the emissions factor during the day. And these demands won’t necessarily be limited to sustainability topics. 

“Reliability and availability remain the primary priority for a data center and a CIO,” Brown said. “However, the historic service level agreement, or SLA arrangement, may become obsolete as tenants dig deeper to understand a colocation facility’s real performance.” 

Along with sustainability metrics, tenants may demand greater proof that their colocation provider is running their operation following best practices in cybersecurity, he said. Solid business practices have to be in place to avoid unplanned downtime.

Data center infrastructure management software has historically been used to manage the infrastructure and processes inside the colocation white space — the area where IT equipment, including racks, servers and power consumption units, are placed. However, the challenges outlined above have led many to demand a new generation of DCIM, what some are calling DCIM 3.0.  

Schneider Electric is one DCIM vendor addressing these challenges with its EcoStruxure IT software solution for colocation providers.

“We are investing in and evolving EcoStruxure IT to meet the new challenges colocation providers will be facing,” Brown said. “We believe colo tenants are going to require more transparency and more granular data from their providers to meet their own security, resiliency and sustainability goals.”

There is precedent for this type of change, according to Brown. He said it is similar to how ISO 9001 required companies to demonstrate that they followed quality management processes. 

“We believe the trend is for colocation tenants to require more transparency on the tools, systems and processes the colo provider uses to demonstrate they can meet their obligations to their clients,” Brown said.

This would necessitate an overhaul of DCIM products, Brown added. While DCIM has historically been a rigid and isolated tool, this future vision will require a more flexible, integrated and customizable solution that is vendor-neutral.  

With EcoStruxure IT, Schneider Electric has developed an open-ended, vendor-neutral approach because the company realized it is part of an ecosystem. By modernizing EcoStruxure IT, integrations become simpler for customers, Brown said. And Schneider Electric has a custom solutions team of engineers performing integrations to help customers maximize their return on investment.  

“This is a complex time, but there is so much we can do to help,” Brown said. “Colocation providers will face new requirements and challenges when it comes to achieving their business goals. We are fully committed to helping them meet these challenges with EcoStruxure IT.”

This article was produced in collaboration between Studio B and Schneider Electric. Bisnow news staff was not involved in the production of this content. 

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