Oracle is reportedly investing $10 billion to expand its data center capacity. Microsoft plans to double its data center footprint. And Amazon will reportedly spend $150 billion on data centers over 15 years.

It’s all due to the rise of generative AI, which is expected to double total data center capacity between now and 2030, according to Newmark’s U.S. Data Center Market report.

Colossal investments might be table stakes for prominent Silicon Valley and Seattle tech vendors. But for most other organizations, there will be pressure to add capacity wisely and gradually, keeping costs down without compromising performance. For these companies, partnering with a versatile colocation service provider can offer the strategic support needed to compete in today’s digital economy.

Here are 5 ways that colocation providers will improve your data center capacity planning:

1. Making Data Centers More Flexible: Today’s IT teams are pressured to do more with less, quickly adapting to shifting business objectives. On-premises infrastructure, built with legacy technology and burdened by limited capacity, often struggles to keep pace. At the same time, adding new services or connecting to providers can take weeks or even months, stalling business opportunities.
   
   Enter colocation data centers. These facilities offer unmatched flexibility, allowing companies to provision new services and connect to providers in days or even hours. This agility lets IT leaders focus on strategic goals rather than being hamstrung by outdated infrastructure.

2. Planning for Explosive Growth: Growing businesses rapidly outpace their initial IT setups. On-premises solutions can’t scale quickly, especially with the added challenges of power and cooling demands. In volatile markets, heavy investment in new infrastructure is a risky gamble.
   
   Colocation centers are not just about efficiency, they are about security and stability as well. By shifting IT spending from CapEx (capital expenditure) to OpEx (operational expenditure), companies can scale their tech capacity seamlessly, without the risk of heavy investment in new infrastructure. These facilities handle power and cooling, simplifying the addition of new servers. Plus, access to cloud services enables hybrid environments that scale with ease, aligning IT capabilities with business needs, and instilling confidence in your data center capacity planning.

3. Ensuring Transparency: Without quality data, communicating technical details to decision-makers can be a nightmare. On-premises solutions often lack robust monitoring tools, making it difficult to present a clear picture of infrastructure status and performance.
   
   Sophisticated monitoring from colocation providers changes the game. With better visibility into asset performance, IT managers can easily gather and share data, connecting capacity, costs, and capabilities. This transparency enhances day-to-day management and strategic planning.

4. Improving Uptime: Unexpected downtime is every IT team’s worst fear, disrupting customer experiences and productivity while hammering bottom lines. The Uptime Institute says costs for 70% of data center outages can exceed $100,000, while about a quarter of outages will end up at more than $1 million. Every leader knows these situations are unacceptable, but on-premises setups often fall short of redundancy. Even top cloud providers only promise 99.99% uptime, which translates to minutes of monthly downtime.
   
   Migrating mission-critical data and applications to colocation facilities can help ensure critical data and applications will remain available. Modern data centers boast high availability practices, disaster recovery, and business continuity services, safeguarding against disruptions and ensuring smooth operations.

5. Providing Stellar Support: IT departments today must balance maintaining existing infrastructure with innovating new services. Focusing too much on legacy systems hampers growth and digital transformation.
   
   A strong colocation partner shifts the balance. With comprehensive support, IT teams can direct more energy towards innovation and less on maintenance. This partnership fuels digital transformation, driving businesses forward.

As high-tech companies make massive strides in expanding their data capacities, the message is clear: scalable, efficient data management is the future. While not every enterprise can invest billions, and not all data centers are created equal, it’s worthwhile for IT leaders to find a trusted colocation provider who can help deliver effective solutions to stay in the game and ensure they can meet the demands of an AI-hungry world.