Insight and analysis on the data center space from industry thought leaders.

Colocation for the Changing Cloud

Carrier-neutral data centers are ideal locations to meet the demands of cloud computing. They have the ability to provide critical and necessary requirements: scalability, power, connectivity and security.

6 Min Read
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Kevin Dean, Senior Vice President of Marketing and Chief Marketing Officer, is responsible for Interxion's pan-European marketing and business development strategy and implementation.

Kevin Dean



Cloud computing is widely acknowledged as the major force driving IT into the future. International Data Corporation (IDC) has predicted that spending on cloud services is set to increase from $16.2 billion in 2008 to $42 billion by 2012. (1) But as the cloud revolution continues, companies need to consider how they’re going to update their IT infrastructures to prepare for this growth.

Several companies have already realized the benefits of colocating to a carrier-neutral data center to meet these needs. The environment found in such data centers is ideal for cloud services because it provides the opportunity to scale to match fluctuating demand, as well as the power, connectivity and secure processes needed to ensure reliable performance and continuous availability. It also provides significant economies of scale, which helps keep costs to a minimum at this critical stage in the development of cloud services. An additional benefit is the drastic cost savings in CapEx and OpEx, which can quickly and easily reach $25 million for the data center build alone.

With this in mind, there are several key factors for having an ideal environment within which cloud computing services can grow and prosper:

1.Limitless Scalability

Cloud computing demands higher levels of faster scalability than previous delivery models. Bandwidth and processing power need to be instantly available for surges in demand, with the added ability to reduce resources when peaks in traffic have passed. By outsourcing to a large data center, companies do not have to worry about over-provisioning for spikes in demand, therefore avoiding issues of under-utilization. Using a third-party data center also prevents the risk of running out of capacity for such heightened demands.

2.Physical and Virtual Security

Although there are many benefits of moving to the cloud, there are also some risks. The Ethernet-based cloud is not impenetrable or fail-safe and is certainly not immune to data loss. Organizations must identify operational and security risks associated with the cloud, namely data security, integrity and privacy, so as to better choose a solution that addresses these concerns.

Large data center environments are ideally suited to secure delivery of cloud applications, such as Storage-as-a-Service and Software-as-a-Service. This is due to the robust nature of the data center’s infrastructure and the inherent need for high-quality, efficient and up-to-the-minute technologies and hardware. Larger facilities excel in both physical and data security, with multiple security layers and fail-safes, as well as back-up and recovery systems that protect against data loss.

3.High-density Power

While most corporate servers average 15 percent utilization, virtualized servers can run at 60 to 80 percent. As a result, high-density power has become a near necessity. High-density power availability enables cloud service providers to deploy the very latest and most efficient equipment while minimizing the space required and, therefore, the cost to the business.

4.Broad Connectivity Choices

As virtualized infrastructures and the demand for “anywhere, anytime” access continue to increase, connectivity has become as important as processing power for users, meaning a company’s implementation of cloud computing will succeed or fail based on the quality of the end-user connection. Maximum bandwidths and multiple connectivity options will drive adoption of the pay-per-use model, and anything less will have the reverse effect. A carrier-neutral data center can provide the widest possible range of connectivity options, and with increased choice, comes more opportunities for lower costs.

5.Low Cloud Costs

Having economies of scale is the greatest benefit of scaling up the infrastructure supporting the cloud. Large data centers drive down the cost of hosting cloud computing infrastructures, multiplying the economies generated by the cloud delivery model and protecting profit margins for customers.

A recent University of California study showed that, when looking at storage, networking and processing costs, very large data centers reduce costs by five to seven times. (2) Additionally, the build-out cost per square-foot reduces data center capital costs by up to 60 percent, according to Tier 1 Research. (3)

Outsourcing cloud services also helps companies that cannot afford to build or continue to expand their own data center(s), thereby reducing their CapEx and OpEx. Facility costs are growing rapidly, and according to the Uptime Institute, the true costs of running a server are often four to five times the cost of the server alone over a five-to-10-year lifetime. (4) Using a third-party data center equates to great savings in both cost and administration for the business.

6.Dedicated Community

Moving the capabilities beyond simple colocation, some data center providers have built up specific "cloud communities" – or communities of interest – of organizations that benefit from colocating in close proximity to markets and within the same colocation services provider. For instance, a data center community built within the financial services sector, where speed of trading between businesses is crucial, will help companies gain the benefits of speed to market and proximity to financial markets.

Additionally, organizations within such communities gain direct access to financial exchanges, brokers, market data suppliers, and a large range of managed services providers and ISVs, many of which connect and use a common infrastructure and/or applications. This type of community approach also applies to substantial areas of interest among digital media and service providers, carriers and Internet exchange and enterprise sectors.

The Maturing Cloud

Ultimately, what will be vital to the success of cloud computing, and to those wanting to take full advantage of its benefits, is a reliable infrastructure that can scale, while simultaneously providing the required connectivity and security.

Colocation data centers are growing because they satisfy the basic need to access useful information, quickly, at lowest cost and minimal risk. More and more companies are realizing the benefits of having a portion of their data processing, storage and networking needs in a third-party facility to help ensure their operations can continue free of disruption.

Cloud computing is still an evolving paradigm that will take many years to fully mature. However, with improvements in understanding and awareness of security, infrastructure and regulatory procedures, and with solid infrastructure foundations in place, the cloud looks set to continue its path of growth and adoption.

End Notes: Back to Top

1. Worldwide IT Cloud Services Spending 2008-12. IDC, Oct 2008.
2. Above the Clouds: A Berkeley View of Cloud Computing. EECS Department University of California at Berkeley, Feb 2009.
3. Data Center Selection, Tier 1, Spring 2009.
4. A Simple Model for Determining True Total Cost of Ownership for Data Centers, 2007, Uptime Institute.

Industry Perspectives is a content channel at Data Center Knowledge highlighting thought leadership in the data center arena. See our guidelines and submission process for information on participating. View previously published Industry Perspectives in our Knowledge Library.

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