No matter where you look in the world, the competition is heating up regarding data colocation.

On top of that, giants like Google and Amazon Web Services and smaller companies are competing for the same growing market by offering cloud computing services.

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 Michigan's colocation is no different, with 44 data colocation centers (spread across eight areas) located in the state and rising. The highest concentration is in Detroit, with 24 colocation centers. But are these data centers in decline?

Searching around the web may give you the impression that colocation centers face competition from cloud service providers. But the truth is the opposite (even though Mad Money’s Jim Cramer claimed it was a dying industry). The colocation is booming globally, and the demand is expected to double and triple over the coming years.

Regarding Michigan colocation, the state is a safe bet to store your information. The state has a naturally cool climate (free cooling for most of the year) and is located at an extremely low peak ground acceleration point, making it a low-risk earthquake zone. Further, although it’s located in the Midwest, it has a significantly lower risk of damage from hurricanes and tornadoes.  

Cloud Computing in Michigan

Cloud-based computing has become quite complicated over the years; even the government has gotten involved these days.

Recently, the Michigan Court of Claims determined that remotely accessed software was not subject to tax in the state. So that makes cloud computing transactions free of sales and use tax. As a result, services can become cheaper as companies servicing Michigan review what transactions are being taxed at present.

The many variables that affect placement and pricing around the state will keep evolving to suit the customer’s needs best. Although moving to the cloud might become cheaper, Michigan colocation is expected to continue to grow.

Cloud and Colocation Are Intertwined

This year has seen a trend of enterprise data colocation centers and cloud services all becoming intertwined. Companies are moving many of their IT workloads onto the cloud, reducing their potential expenses at their data centers. As a result, the growth of the cloud is driven by the growth of colocation. This puts colocation in a peculiar but interesting middle ground.

Regarding retail colocation, the money is generated by several content providers and service providers (cloud and IT). The country is currently split into 60% service providers and 40% enterprise. As a result, all these variables drive the consolidation of data centers to expand a firm’s regional footprint and to obtain complementary cloud and service options.

Although cloud service providers are expanding their global footprint, it hasn’t affected Michigan colocation or colocation in any specific area. A lot of companies prefer to keep their data close by making the impact of Google and AWS insignificant. The giant clouds are growing, but not at the expense of local and private clouds. They will continue to do this through VARs, systems integrators, and service providers.

Also, see Are Michigan Data Centers Contending with Market Oversupply?

Has your company just transitioned to a cloud? Let us know about your experience in the Comments box below.

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