A recent report, Customer Insight: Future-Proofing Your Colocation Business by 451 Research, found that global operational square footage hosting cloud infrastructure will expand by a 16% compound annual growth rate from 2017 to 2020.

Despite this, the amount of on-premises enterprise data centre capacity will drop four percentage points, from 77% to 73% in the same time period.

The report found that 62% of respondents said they changed applications from colocation to the public cloud in the past couple of years, but over the same period, 41% revealed to moving applications from the public cloud back to colocation facilities.

Out of all survey participants, 47% said they had faced latency or performance issues, 45% said colocation was less expensive, 39% said they wanted more predictable costs, 37% said it was because of security concerns, 34% said a change from app DevOps test to production, and 13% said regulatory compliance.

For those who moved to the cloud, 63% said the public cloud was cheaper, 59% said it increased functionality of cloud-based software, 39% said capacity requirements are unpredictable, and 32% said it enhanced backup options, according to Network World.

The report said: “These repatriation trends, and the reasons behind them, underscore the relative immaturity of the shift underway to hybrid IT and datacentre environments.

“At 451 Research, we talk about the ‘best execution venue’ (BEV), which is specific to the individual organisation, use case and business needs – rather than a simple ‘best’ option for data centre capacity.

“The challenge for colocation providers is to understand the ‘mega trends’ driving BEV decisions and to effectively meet customers’ key colocation needs – cost-effectively and over the long term.”

Written by Leah Alger