Hybrid cloud is the most fertile ground for colocation providers to deliver new types of value.
In a world where the vast majority of businesses are already using public cloud services, the ability to extend public cloud resources into private infrastructure is highly valuable. It means businesses can keep the workloads they already have running in public clouds, but without the compliance and cost headaches that can arise from having to host workloads on public cloud infrastructure.
Building and Managing Hybrid Cloud Computing Systems
At the same time, however, building and managing a hybrid cloud computing system is a difficult proposition, even if customers use public cloud vendors’ own frameworks. Fully managed solutions like AWS Outposts are quite costly. Alternatives like Azure Arc and Google Anthos require users to acquire, provision, and manage their own hardware, which may be especially challenging for businesses that are no longer accustomed to doing so because they have become dependent on the public cloud.
For colocation providers, then, there is tremendous opportunity in offering support services that help their customers manage hybrid cloud infrastructure inside colocation data centers. Those services could be the help that many businesses need to make the jump from using the public cloud alone to going hybrid — or from having a poorly integrated IT strategy that involves private infrastructure and public cloud resources running side-by-side, with no unified control plane.
The hardware side of hybrid cloud computing, too, is an area where businesses are likely to need help. Finding servers that work with a company’s hybrid cloud framework of choice, then provisioning them and connecting them to the hybrid cloud control plane, is a service that colo providers could offer.
And it’s not just the industry giants that are in a position to help provide hardware for colocated hybrid clouds. Secondary market equipment vendors, who help repurpose server hardware from hyperscale companies for use in smaller data centers know that colo providers are increasingly looking to establish and grow incremental revenue streams beyond power, space, and interconnects.
Growing Demand for Colocated Hybrid Cloud
These types of solutions are likely to become more central to the colocation industry going forward for two reasons. One is the general momentum surrounding multi-cloud and hybrid cloud computing, which are becoming the focus of more enterprise cloud strategies. It’s a safe bet that demand for hybrid architectures is likely to grow, especially as public cloud vendors continue to develop their own hybrid cloud frameworks.
The second is that, unlike managed services that cater primarily to colocation customers who haven’t yet moved to the cloud at all (or are only using a private cloud), hybrid cloud computing services can help colo providers win back the business — or at least part of it — of companies that have already moved to the public cloud. This is especially true given that cost pressures and compliance challenges are pushing more and more companies to “repatriate” their cloud workloads. If colo providers can make it easy to repatriate those workloads into a colocated hybrid cloud, rather than on-premises, they stand to become winners of the cloud repatriation movement.
There are a variety of ways in which colocation providers can remain competitive in an era when rack space alone is no longer worth very much. Some of the greatest opportunity, however, lies in building out hybrid cloud deployment and management services, which are a great way for colo providers to attract more businesses to their facilities, even if those companies previously invested in public cloud.