January 23, 2025

Andy Bastick, Senior Director of Global Partner & Product Marketing, Digital Realty

Transition from on premises or to a new colocation provider

Summary of key points:

Digital transformation, Hybrid IT, and artificial intelligence (AI) initiatives are driving enterprises to shift from on-premises data centers to colocation.
The increase in IT workload management complexities strain legacy data centers with elevated power density and connectivity requirements.
Colocation is a smart option to leverage high-performance AI and machine learning (ML) workloads.
The benefits of colocation include fast scaling, improved uptime, regulatory-compliant infrastructure, and enhanced power and cooling.

AI’s growth is a critical factor in the evolution of the physical infrastructure requirements of data center facilities. Workload management, power constraints, and record demand versus low supply are all factors causing IT leaders to turn to colocation.

Colocation offers the best of cloud and on-premises infrastructure without the resources needed for data center management. Plus, enterprises with their eyes on international expansion readily adopt hybrid cloud network infrastructure to facilitate scaled growth.

In fact, the market for U.S.-based colocation data centers has doubled since 2020.¹ A 30% uptick in occupancy signals that this is a viable solution for many enterprises.

Additionally, enterprises have spent $300 billion on capital expenditures (CapEx) infrastructure projects to support AI applications.¹ This is why IT leaders consider data center migration a top priority when developing a strong digital infrastructure.

What is data center migration and why is it an increasing solution for enterprises?

Data center migration involves moving an enterprise’s applications, hardware, and data to another physical or digital location.

Many companies choose this route to:

Streamline digital infrastructure operations
Implement cost-cutting strategies
Boost overall performance of networks and systems
Comply with data sovereignty regulations governing where they store their data

Enterprises also migrate from on premises for other reasons specific to their IT strategies. According to a recent study by CBRE, large corporations face increasing difficulty securing on-premises capacity due to low supply, construction delays, and power density challenges. AI is a driving force behind the record data center demand, but power constraints inhibit data center growth.²

Considering this, IT leaders must take a proactive approach to forecasting their capacity requirements. Migrating colocation is an optimal solution to meet the power density and supply challenges of technologies like AI.

What are the types of data center migrations?

Cloud migrations

Moving from one cloud service provider (CSP) to another can shift the same workload challenges to a different platform. While challenges are inevitable, if not managed effectively, they can cost companies far more than the migration itself.

In turn, the most efficient and successful migration away from a platform happens during the onboarding planning stages onto said platform. This approach puts the workload at the center of decision-making when developing digital infrastructure that works for each company’s unique needs.

Data center consolidations

For the modern enterprise, data center consolidations lead to centralized management and a reduction of servers needed for structured business operations.

Colocation migrations

Depending on the colocation provider, a migration to a multi-tenant data center partner can involve the entire tech stack of a company. This could include:

Moving physical infrastructure, such as servers, routers, and cables, from on premises to colocation
Transferring virtual machines to a colocation facility for lower latency
Shifting from hardware to virtual infrastructure

Creative management of workload allocation could see a combination of all or some of these digital infrastructure configurations.

Shifting from CapEx to OpEx, mitigating hybrid cloud solutions and other benefits of colocation

Chief among the data center migration decisions for leading enterprises is positioning IT infrastructure for future IT demands. At the heart of these decisions should be a flexible, comprehensive financial strategy. This plan should enable AI and hybrid cloud deployment while managing CapEx and operational expenditures (OpEx).

A cloud-first or cloud-only digital infrastructure can cost companies more than the systems designed around workloads. IT leaders should conduct breakdowns for each option based on migration costs in both directions. Meaning, they should calculate the cost of onboarding and offboarding when evaluating the best home for their workloads.

For some, the cloud does make sense when companies take a measured approach to cost estimation. Still, some customers have found that when leveraging the cloud, the safest option is to partner with a colocation provider that offers direct connections to their preferred CSPs. Digital Realty, for example, offers Direct Connections via ServiceFabric™ to Oracle Cloud Infrastructure, Microsoft Azure, Google Cloud, AWS, and other major CSPs.

The biggest advantages of these direct connections are lower latency than using public internet and optimized performance of these connections for growth-focused enterprises.

Why migrate your data center to colocation?

The expansion of AI and ML workloads continues to drive leading companies to leverage colocation data centers. AI workloads, especially, have prompted colocation data center providers to increase power density availability. High-density colocation, provided by Digital Realty as an example, can operate between 50 to 150 kilowatts.

For enterprises choosing to migrate their on-premises data centers to colocation, AI has given them a smart way to test and roll out AI-intensive use cases, models, and applications.

Other advantages include:

Ability to scale quickly and flexibly to OpEx
Improved uptime with an SLA of 99.999%
Quick access to more power, cooling, and connectivity
Industry-specific and data sovereignty regulations compliance
Low latency and dedicated access to a global ecosystem of connectivity solutions
Top-line critical infrastructure management

6 success factors to consider when planning your data center migration to colocation strategy

Before relocating to a colocation data center, identify the risks and challenges associated that could impact your organization.

For many enterprises, concerns around these issues are top of mind and avoidable through a strategic data center migration approach and effective planning. Businesses can mitigate risks and achieve a smooth transition by leveraging a well-defined data center migration plan that considers:

Data security

Address this issue by rolling out end-to-end encryption for all data in transit. Commit to access control protocols and audit the colocation provider’s physical security.

Uptime during changeover

Include system redundancy, creative scheduling, and hardening of your company’s disaster recovery resources and backup systems.

Cost management

Develop and review budgets regularly in partnership with your finance resources and the colocation data center provider.

System compatibility

Appoint an internal migration lead to check the details for connections, hardware, cabling, and cage security.

Regulatory compliance

Ask providers about their global footprint, keeping in mind your product roadmap and plans for expansion into new markets. Even if an enterprise isn’t in a highly regulated industry, data sovereignty laws are a key consideration when migrating to a colocation data center. A colocation data center partner in your preferred markets can help you meet data sovereignty compliance needs.

Control and system monitoring

Implement data center infrastructure management tools to monitor performance in one, central resource. The colocation provider may even offer an internal tool for infrastructure monitoring. Access controls for who has permission to enter your area of the data center remains a critical piece of a successful colocation data center migration.

Lean on an experienced colocation data center partner

The complex landscape of digital transformation driven by technological advancements and market demands continues to become more nuanced. Enterprises that develop a clear strategy for colocation data center migration lay the foundation for operational optimization, smart cost management, and capacity to test and implement the latest advances in tech.

A solid data center migration strategy includes:

A thorough cost analysis of each option for migration to colocation
Optimization of workload performance and management at the center of decision-making
Alignment of colocation infrastructure with future growth plans

Migration can be easy if you work with a partner who understands your needs and has the right experience.

Digital Realty is an industry leader with world-class data centers and high-density colocation solutions. Colocation on PlatformDIGITAL® helps enterprises build a future-proofed digital footprint at a center of data exchange while minimizing CapEx, assuring uptime, reducing latency, ensuring compliance, and more.

Want to know how a data center migration partnership with Digital Realty would take shape at your organization? Contact our expert team for a personalized migration strategy that ensures a smooth transition and sets your enterprise up for future success.

FAQs

How long does data center migration take?

Data center migration can take anywhere from a few weeks to several months, depending on the size and complexity of the data center and the amount of data moved.

What is involved in a data center migration?

A data center migration typically involves planning, assessment and discovery, design and architecture, testing, implementation, and post-migration support.

What is data center relocation?

Data center relocation refers to the physical movement of a data center from one location to another. This involves moving servers, storage devices, networking equipment, and other infrastructure components.

¹JLL, U.S. Data Center Report - Midyear 2024, August, 2024.

²CBRE, Global Data Center Trends 2024, June, 2024.

Digital Realty Introduces High-Density Colocation Offering To Address Data and AI Growth Challenges