According to Aberdeen Group and Ventana Research, one out of four enterprises surveyed expect their data to grow by more than 30 percent in the next year. In order to cope with the explosive increase in data, we can anticipate that the number of enterprises migrating to the cloud will continue to rise at a blistering pace. This will be the year when even the most conservative CIO and IT manager will shift their attitude toward cloud adoption from, “Let me think about that,” to cloud being perceived as a mission-critical business requirement.
A driving force in this transformation is the need to get out from under the burden of aging infrastructure, which is causing many enterprises to look at alternatives to traditional On-Premises data center approaches—namely, colocation services. With colocation solutions offering flexible, scalable, and high-performance environments, businesses can optimize their digital transformation efforts while maintaining control over their infrastructure.
Make no mistake, cloud-based applications and services increase organizational efficiency, reduce CapEx expenditures, are ideal for businesses with growing or fluctuating bandwidth demands, eliminate the high cost of hardware, and increase workforce collaboration and productivity across globally dispersed offices and employees. The cloud is even good for the planet. When a company’s cloud needs fluctuate, server capacity can be scaled up or down to match demand, thereby saving energy and reducing an organization’s carbon footprint.
Modern colocation facilities have evolved into hyper-connected digital hubs, allowing enterprises to seamlessly integrate hybrid and multi-cloud strategies while benefiting from a resilient, high-performance environment. Advanced colocation ecosystems offer direct connections to leading cloud service providers, ensuring lower latency, enhanced security, and increased compliance with industry regulations.
Cloud and colocation offer companies comparable benefits, but each is best suited to satisfy different scenarios. For example, both help reduce costs through the use of shared facilities. However, the choice of one versus the other should be based on an organization’s specific requirements.
Not All Clouds Have a Silver Lining
For companies in certain sectors, not all clouds have a silver lining. For instance, the healthcare industry has been generating large volumes of data due to the rapid digitalization of manual patient records, spurred by legislative regulations and the need to provide better patient care at lower costs. For enterprises in the healthcare, banking, and insurance sectors that deal with sensitive information, the cloud may not offer the necessary security to meet regulatory and compliance requirements.
The emergence of sovereign cloud solutions and dedicated private cloud environments within colocation facilities has provided an alternative for businesses needing greater control over their data while leveraging the benefits of cloud-like agility. Compliance frameworks such as HIPAA, PCI DSS, and GDPR have further emphasized the need for enterprises to ensure that their colocation and cloud service providers uphold stringent security and governance measures.
Colocation: A Primer
The colocation data center market is expected to surpass $100 billion in the coming years, driven by the increasing need for scalable, interconnected infrastructure. With colocation, companies own, use, and maintain their own equipment but share the cost of power, cooling, communications, and data center floor space with other tenants. Colocation is a good choice for an enterprise that needs complete control over its equipment while benefiting from cost efficiencies and enhanced connectivity.
Another reason to use colocation is to address the limitations of an existing data center. One industry survey found that 36 percent of data center facilities will run out of space, power, or cooling capacity in the near future. If that dire prediction becomes true, the logic is that, rather than building a new data center, an enterprise can cost-effectively augment its current facility by using space in a colocation facility. Additionally, many enterprises use colocation to have a secondary site for disaster recovery purposes, avoiding the need to build a second data center.
To further support businesses, modern colocation providers offer on-demand connectivity solutions, high-performance network access, and built-in security frameworks that help organizations manage their digital ecosystems more efficiently. Many colocation providers also offer managed services, ensuring businesses can focus on their core operations while their infrastructure is continuously monitored and optimized.
Why the Cloud, Anyway?
There are some distinct differences with a cloud-based infrastructure service. Like colocation, cloud-based infrastructure services offer cost savings through the use of a shared facility. But there, the resemblance ends. With cloud services, the cloud provider supplies and manages the enterprise’s full hardware infrastructure, including servers, storage, and network elements. This eliminates CapEx costs and reduces OpEx costs since the provider’s staff, not enterprise IT staff, are responsible for day-to-day administration, routine maintenance, troubleshooting, and problem resolution.
The growing trend toward hybrid cloud solutions has made colocation an integral part of enterprise digital strategies. Organizations now use colocation as a bridge between private and public clouds, enabling greater data mobility, improved security, and optimized performance through direct connections to leading cloud platforms.
So, Colocation or Migrate to the Cloud?
Colocation and cloud services offer companies alternatives to traditional in-house data center approaches. Based on the specific requirements of an enterprise’s particular deployment, each offers unique benefits and has its own criteria to consider. A company will want to examine its compliance and privacy needs, its need for direct control, as well as the need for always-on availability and uptime when deciding between colocation and cloud.
The major caveat to keep in mind is that whether a company is choosing colocation in a data center or migrating to the cloud, it’s likely its IT staff will lack the necessary expertise to execute either alternative. Some companies will need colocation and access to cloud Service Providers such as Microsoft Azure, Amazon Web Services (AWS), and Google Cloud. But a lot of enterprises won’t know how to connect the dots. They’ll need the right connectivity to reach the cloud or other specialty hosting applications.
Today’s colocation facilities provide direct on-ramps to major cloud providers, making it easier for businesses to integrate hybrid and multi-cloud strategies. Secure, high-speed interconnectivity solutions allow companies to optimize their IT environments while maintaining control over mission-critical applications and data. With the rise of digital transformation, colocation is increasingly becoming the strategic nexus between enterprise IT and cloud services, enabling businesses to innovate and scale without compromising security or performance.
As Katie Broderick, a Director at 451 Research, has stated, “Colocation is quickly becoming the nexus of both cloud and enterprise IT. The colocation market is serving as a ‘data center arms dealer’ to both enterprises and the cloud. In this process, colocation is often becoming the strategic connection point between the two.”
Whether an enterprise is considering migrating to the cloud, hosting its data in a colocation facility, or some hybrid solution, selecting a colocation provider with a strong global network, managed services, and security expertise is the best bet to ensure its cloud or colocation strategies align with its business requirements and strategic objectives.
By Gary Bernstein