In recent years, Telecoms have bought huge tracks of data center space hoping to tap into the growing enterprise IT outsourcing market for colocation and hosting services; but in recent months, the tide seems to be turning.

A tough competitive environment dominated by the larger, more established Cloud Providers seems to be the key factor cited by industry analysts for the telecom industry’s exit from the data center. Yevgeniy Sverdlik of Data Center Knowledge writes “with the cloud giants’ race to lower the prices of their services, their scale, and their rapid releases of new features, it has become nearly impossible to compete in the space, and operating a global data center fleet is expensive business.” In a recent Forbes article regarding the Verizon sale, the magazine points out that enterprise customers have continued to seek out more sophisticated offerings at lower prices and the companies that have been able to meet those demands have been the larger, mainstay cloud providers. In the long run, telecoms may have lacked the appetite needed to continue to invest in a very capital heavy market to stay competitive.

Telecoms are working to focus back on their core business and areas of specialty. It will be interesting to see who will pick up these new data Centers in the coming weeks and months.