The pivot of many enterprises toward hybrid cloud architectures has upended all corners of the colocation market. In an era when workloads routinely span public cloud environments and colocation facilities, colocation providers large and small face ever-increasing pressure to deliver more than just data center space.
But compared with large colocation providers with a global presence, small colos are responding in somewhat different ways to the explosive growth of hybrid cloud. They also face different types of pressures when it comes to the hybrid cloud market.
Building in part on our series of interviews with colocation providers about their hybrid cloud strategies, this article compares the responses of large and small colocation providers with hybrid cloud.
Hybrid Cloud’s Impact on Colocation
There is much to say about the ways in which hybrid cloud (and hybrid IT more generally) is impacting the colocation market. But it can be summed up as follows: As more and more businesses adopt hybrid cloud architectures that blend workloads hosted in public clouds with those running inside colocation facilities, colocation providers face much greater pressure to provide more than just data center real estate.
If data center space is the only thing colos can provide, businesses may choose to move their workloads wholesale into the public cloud. That’s especially true in situations where organizations use hybrid cloud frameworks like AWS Outposts or Azure Stack to manage their IT estates. Because these frameworks extend public cloud services – along with public cloud vendors’ management tools – into private data centers, they make it very easy to migrate workloads out of data centers and fully into the public cloud without having to reconfigure services or even change management tooling.
That’s the basic challenge that colos of all types face. Now, let’s look at how large and small colos, respectively, are responding.
Big Colos and Hybrid Cloud
For big colos, a key part of the response to hybrid cloud pressures appears to be leveraging global data center networks that offer customers more options than public clouds when it comes to where workloads are located.
That makes sense, especially in an age where edge computing is in vogue. Whereas the big public clouds offer just a handful of data centers in most major regions, large colocation providers may offer dozens of data centers in each country. What’s more, colocation facilities tend to be closer to large population centers than public cloud data centers. If you need to cut latency down to mere milliseconds or set up redundant hosting in different local areas, colocation offers an advantage that public cloud alone can’t deliver.
The large colos have also invested extensively in interconnect services targeted at hybrid workloads. CyrusOne Chief Operating Officer John Hatem told Data Center Knowledge, “The biggest thing we offer for hybrid cloud is interconnect.” Digital Realty Chief Technology Officer Chris Sharp expressed similar sentiment, saying that “interconnection is foundational” for his company’s hybrid cloud strategy.
Here again, this makes sense. The large colos can afford high-performance interconnect services that provide a level of connectivity that at least matches, if not exceeds, the direct-connect services from public cloud providers.
Small Colos and Hybrid Cloud
Small colocation providers – those that operate a relatively small number of data centers, usually within just one or two regions – are managing the hybrid cloud challenge in a different way.
By and large, their strategy focuses mostly on management services. By providing hands-on services to help plan, support, monitor and/or secure colocated workloads, small colos can provide management solutions that public clouds don’t. Some of the large colos, such as Rackspace and Equinix, are also investing in the managed services market, but in general they offer fewer managed services – and services that are less extensive in terms of the support they include – than smaller colos.
At the same time, small colos may be able to benefit from a hyperlocal presence that neither public cloud providers nor large colos can match. A regional colo that offers multiple data centers in the same city can place workloads very, very close to end users – provided those end users are located in that city, of course. Large colos that operate just one data center in a given city, and public cloud providers whose closest data center may be across the state, can’t compete in this respect.
The big challenge for small colos is that not all customers need either managed services or hyperlocal data centers. Large enterprises may prefer to manage their workloads themselves, and businesses with a global user base won’t care much about having multiple data centers in the same local region.
In short, while large and small colos face the same sorts of pressures from hybrid cloud adoption, they are handling the challenge in different ways. For large colos, the answer to hybrid cloud seems to lie in providing as many data center and connectivity options as possible. For small colos, managed services and hyperlocal infrastructure are the key.