Why multi-tenant data centres have become essential for today’s enterprise

28 February 2023

 In the same way that many business meetings have moved from boardrooms and conferences to Zoom and other video meeting platforms, the data and apps that enterprises rely on can be accessed in the most efficient place: the multi-tenant data centre (MTDC).

What is a multi-tenant data centre?

Multi-tenant data centres (MTDCs), also known as colocation data centres, are large data centre facilities that are shared by numerous organisations and highly interconnected with telecommunications, cloud computing providers and other service providers. They have become the new centres for data exchange in the rapidly evolving global digital economy. In turn, traditional in-house data centres are becoming less relevant and effective in supporting enterprises’ needs and competitiveness.

But what’s driving this change and why should those organisations that still have most of their applications and data hosted within their own data centres consider making a change? To answer these questions, we need to examine how data is changing, how technology infrastructure and networks are changing, and the way doing business has evolved.

Drivers of change

Firstly, the volume of data that organisations are seeking to manage is exploding with the evolution of traditional enterprise systems and the introduction of mobile phone apps, Internet of Things sensors and other innovations. This growth is only going to accelerate as further advances become mainstream, including artificial intelligence, machine learning, augmented reality, autonomous vehicles, 3D printing, and new social media platforms.

Our own research recently found that enterprise applications in Irish enterprises are expected to grow by greater than 10% in the next 12 months.

This growth in raw data has created significant opportunities for enterprises to analyse this information to improve customer experiences, develop new digital products and services, and grow sales. However, the sheer volume of data can lead to the problem of Data Gravity, where there is so much, or it’s so stuck in silos, that it becomes difficult to manage.

At the same time, regulators in Europe, the United States, and elsewhere have introduced rules to control how and where organisations can use and store the data they now hold. All these forces are leading many organisations to seek ways to decentralise the storage and analysis of data, to make it easier to handle and to avoid breaking regulations.

The second shift has been the rise of cloud computing and software-as-a-service solutions, providing services like storage, analytics, CRM, and everything in between. This has seen enterprises look beyond their own in-house data centres with cloud, multi-cloud, and hybrid IT strategies aimed at expanding the power and scalability of their IT infrastructures. For these strategies to work, it is critical that organisations can connect to these third parties in fast, secure and flexible ways.

The third key driver is the digitalisation of business itself. Just as meetings are becoming virtual, many commercial transactions continue to move from the physical realm of shops, offices, and factories to websites and other online platforms. In turn, organisations need to ensure that all parties enjoy a high-quality experience while interacting in the virtual realm.

The new role for multi-tenant data centres

MTDCs solve a range of challenges for organisations grappling with these trends and seeking to leverage them for their advantage. They do this by acting as neutral, technology-agnostic meeting places that allow organisations to change how they handle data while establishing faster and more secure connections with suppliers and partners.

MTDCs also support the foundational elements of a company’s critical IT infrastructure, by providing innovative power and cooling solutions, in house expertise and support, and a highly secure environment, allowing the customer to focus on their core business.   

Let’s look at a few specific examples.

Digital Realty’s recent Drivers and Challenges of Ireland’s IT landscape research report, which surveyed more than 150 senior IT and business decision makers, found that, in Ireland, we will continue to see an increase in the move of workloads to the public cloud in the next two years (+23%). Within the same time period the findings indicate that the use of colocation will approximately double (+111%).  

MTDCs allow organisations to achieve these goals by enabling them to access data centre resources where they need them on a cost-effective basis. The alternative would be for those organisations to build their own dedicated facilities and have operational staff in every desired location.

When an organisation moves its data and apps to a shared data centre, it will typically be able to connect to those other critical suppliers quickly and securely within the facility. Digital Realty has extended this concept by supporting fast, secure virtual private network connections across its data centres and beyond with solutions including ServiceFabricTM.

The following diagram captures this new architectural vision.


Enterprises can also find other organisations they wish to work with located within MTDCs. For example, a business could find it’s more easily able to connect with a key cybersecurity supplier, a product distributor, and a major social media platform with direct access to end customers, simply by sharing space in the same data centre.

Managing Director for Ireland, Séamus Dunne recently commented “Organisations seeking to effectively utilise a hybrid IT environment and move away from their own server rooms and the public internet, need to consider colocation an integral part of their digital transformation strategies. In a world where no one is bound by location and companies are undergoing international growth, knowing that you can make sensitive data available in locations where it will be geographically relevant, secure and also easily accessed by team members is critical to improving your organisation’s performance. Enterprise grade network dense colocation facilities can play a central role in supporting this.”

Opportunities to connect don’t happen by chance - Digital Realty brings companies, technologies and data together across its multi-tenant data centres on PlatformDIGITAL©. By enabling these connected data communities, Digital Realty provides the safe and open meeting place for companies of all sizes, from all types of industries to come together. This ensures that customers gain the traditional benefits of locating their IT within an MTDC – including cost, scalability, and environmental sustainability – with the network effects that come with being positioned alongside other key players in the digital marketplace.

To learn more about how a multi-tenant data centre can benefit your business, get in touch.