COLOCATION AND THE HYBRID CLOUD: DIVERSITY OF OPTIONS, DIVERSITY OF ADOPTIONS
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1 White Paper COLOCATION AND THE HYBRID CLOUD: DIVERSITY OF OPTIONS, DIVERSITY OF ADOPTIONS Sponsored by: NEXTDC Glen Duncan February 2015 IDC OPINION ICT decision-makers should view the hybrid cloud as a key component of their overall ICT transformation strategy in efforts to continually align and adapt ICT with the changing business landscape. Strategically, hybrid cloud may be viewed in diverse ways including as a transition point to full public cloud adoption. However, for many enterprises not all workloads can or will be virtualised. For others, latency, security and sovereignty concerns will mandate VPC environments. In these cases, the hybrid cloud model will be a strategic way of maintaining local ICT control whilst enjoying the elasticity/scalability and cost/pricing benefits of public cloud. As workloads shift, colocation will be an important option for non-virtualised and VPC environments because of the unique benefits it affords. Many CIOs and IT Managers are experiencing new challenges in their ICT environments as a result of the 3 rd Platform pillars of mobility, social, cloud and Big Data. The hybrid cloud model provides a solution for many of the problems being experienced whilst maintaining the flexibility necessary for unique enterprise environments. Each infrastructure option has the potential to be best-of-breed depending on specific ICT requirements. However, the important role of colocation in the hybrid cloud model is not fully understood. SITUATION OVERVIEW Hybrid cloud and colocation Hybrid cloud is a unified ICT environment encompassing public and private cloud resources. Virtual machines, cloud storage, dedicated hardware and workloads operate seamlessly across different types of IT environments private clouds residing in enterprise data centres, private clouds located in colocation facilities or hosted by service provider data centres, and external public clouds. However, hybrid clouds are more than just the middle ground between public and private. Hybrid clouds, when properly designed, integrate compute, storage, security, networking, applications and management into a common, highly orchestrated on-premise/off-premise "workspace" that enables IT operations and application developers to leverage the speed and agility of public cloud in concert with the existing tools, systems, and policies being used in the enterprise data centre. Colocation is an important element of the hybrid cloud story. Colocation services are defined as a customer's use of a third party's data centre facilities (i.e. physical floor/cage/rack space, network capacity and HVAC/power infrastructure) in which the customer operates their own servers/storage systems, network equipment and other types of infrastructure. February 2015, IDC # AU29015Z
2 The workloads housed in this way are still under customer control but have avoided some significant costs and are located closer to critical services like public cloud gateways for safe, easy and fast access to public cloud resources. The workload and hardware/software assets can also be contained within the enterprise security perimeter and managed as if they're all on-premises. In an ICT environment that is dominated by the 3rd Platform pillars, data centre and server rooms/closets are no longer just the places where organisations house their ICT infrastructure. An enterprise's data centre is the primary point of engagement and information exchange with its customers, employees and partners. For many customers the electronic access through the data centre may be the first time they interact with the company by virtually accessing applications, downloading audio or video files or obtaining information. The customer's first impression of a company can be directly influenced by the data centre's performance, so the quality of the experience needs to be such that it provides the best service. The Australian enterprise data centre market is evolving rapidly in response to these new stakeholder needs. Innovation in data centre technologies, both facilities and ICT related is changing the way that data centres are built and expanded. In parallel to this technological change is the beginning of a perceptual change amongst CIOs and IT managers towards the service offerings of colocation providers. Through an increased portfolio of services, colocation providers are now also able to provide improved ways of interacting with their customers. Enterprises are currently experiencing a set of business and technological pressures that are driving an aggressive wave of data centre rebuilds/remodels and new data centre construction on one hand, but also aggressive data centre consolidation and slow-downs in construction/remodels on the other. The factors shaping this build-out as well as the slowdown are: In this new universe, building and running data centres will no longer be a part-time job. The data centre is becoming the foundation for new business models in a growing set of industries where leveraging large volumes of data and highly elastic compute resources is key to delivering better insight. Global expansion: Businesses have to go where the new customers and the new markets are. They need data centres in multiple geographic regions, close to the customers to meet latency, security and governance requirements. New service creation/expansion: Organisations are anticipating an explosion in new 3 rd Platform services and new applications that take enterprise workloads to the next level. Data centre obsolescence: Many companies realise that the existing way of running data centres isn't keeping pace with new technologies such as converged systems, as well as changing expectations for better performance and lowered operating costs. Many IT organisations will acknowledge that data centre design, construction and ongoing expansion are exceeding their internal skill sets. The key to future success in the data centre will involve a greater dependence on tools such as advanced data centre infrastructure management solutions to simplify and automate planning for dynamic data centre environments, as well as an extension of software-defined networking efforts to speed access to bandwidth between internal and service provider data centres IDC Document # AU29015Z 2
3 Benefits of hybrid cloud Hybrid cloud implementations yield multiple business and IT benefits, including the following: Continued leverage of existing IT systems investments. Investments in equipment, software, personnel and data centre facilities cannot simply be written off in favour of "asset-lite" public cloud services. However, hybrid cloud provides self-service "stretch" resources that augment what's already in the enterprise data centre, delaying or even eliminating the need for additional capex via an opex approach. The biggest advantage of a combined hybrid and colocation approach is the ability to provide a best-of-fit deployment model for different workloads. Centralised governance, decentralised infrastructure. Public cloud can create "shadow IT" purchasing and deployment, resulting in fragmented enterprise IT environments as well as security and compliance risks. Hybrid clouds that tightly link the enterprise data centre with public cloud resources, along with well-defined policies and processes governing access and usage, ensure consistent IT governance while enabling location-agnostic flexibility. The right environment for the right workload at the right time. Hybrid cloud means a common architecture for both legacy and net new-cloud native applications, with the ability to mix and match deployment environments based on specific performance, security and compliance parameters, as well as scale-up/scale-out needs and requirements around dependency/tethering to on-premise systems. Bridging the divide between IT and line of business. Hybrid cloud helps give each group what it wants: security and control for IT operations and speed and agility for LOB operations. Flexibility. On-premises, colocation, public and private cloud each have unique advantages over the other. Hybrid cloud allows the enterprise to strategically utilise each option based on their relative strengths IDC Document # AU29015Z 3
4 Benefits of colocation Colocation providers offer a range of services and features which result in distinct benefits for the enterprise: Colocation is well suited to ICT environments where hardware and software assets are already owned but need to be housed in a more secure or available facility. Business continuity/disaster recovery. Avoiding downtime is critical for all organisations, and having a solid disaster recovery plan in place is crucial. Colocation solutions can offer peace of mind that when disaster strikes an enterprise s IT operations will remain online and not disrupted. Advanced IT skill set. The specialised, data centre-centric skill set inherent in the technical personnel within a colocation provider s organisation can offer a significant benefit in augmenting existing staff's knowledge. ICT infrastructure monitoring, management and analytics. Colocation providers can offer these on a subscription basis, thereby helping you avoid a significant capital expenditure to utilise these important tools. Network connectivity. Colocation providers offer their clients greater options for network connectivity than an organisation could obtain for their own internal data centres. This feature of colocation can greatly benefit enterprise workloads where latency is a critical issue. Scalability/on-demand resources. Organisations can work with colocation providers to rapidly scale-up capacity as demands increase, as well as to outsource specific projects and workloads. This offers significant benefit to enterprises whose internal resources (both man and machine) are already running at near-maximum capacity. Emphasis on opex versus capex. Colocation providers' offerings are appealing to many organisations because of the monthly recurring-charge billing model, which provides customers with predictable billing that can be incorporated into operational budgets. Power and cooling efficiencies. Efficiencies are built into the design of colocation data centre facilities which strive for a low PUE. Digital ecosystem of cloud and service providers. Some colocation providers have fostered a community of cloud and service providers within their facilities for customers to selectively source their preferred cloud and ICT services. Security (both physical and digital). The types of security utilised on the physical front include multiple layers of physical barriers (fences, doors and cages), anonymity, 24/7 security guards, continual identity checking and cameras. Digitally, colocation enables the enterprise to directly cross connect with the servers of other tenants including key partners, customers, suppliers, cloud providers and service providers. This connection eliminates the need for and security risk from data leaving the colocation facility via external networks IDC Document # AU29015Z 4
5 FUTURE OUTLOOK Businesses are demanding that their ICT environment deliver large and highly variable amounts of transaction, content serving, and analytic and archiving capacity on time and with no delay. Building and running data centres as well as managing IT assets at the edge can no longer be a part-time or occasional job. As a result, over the next five years many organisations will stop managing their own infrastructure and will also reduce or eliminate many of their own server rooms/closets and data centres. They will make greater use of on-premise and hosted managed services for existing assets. They will make greater use of dedicated and shared cloud offerings in service provider data centres for new services. Even in situations where organisations opt to retain ownership of their own data centres, many organisations will make the conscious decision to permit the aging of existing enterprise data centres. This decision will make it more difficult for many to take advantage of new technology options such as converged and software-defined data centre solutions within their own facilities. Capacity planning will be a continuous activity that is key to operational and business success. It will spur demand for tools such as advanced data centre infrastructure management solutions that can simplify and automate planning and diagnostic processes. There are several variations of hybrid cloud environments that combine elements of the three primary cloud dimensions: public/private, on-premises/offsite, and single/multi-tenant. Common implementations include: On-premises private cloud plus one or more offsite public clouds On-premises private cloud plus offsite, service provider-hosted private cloud Off-premises, customer-managed private cloud housed in a colocation facility plus one or more offsite public clouds Service provider-hosted private cloud plus public cloud Third-party cloud federation/brokerage The central role that colocation provides in the hybrid cloud environment is not always evident. Things to consider: VPHC private clouds hosted in a colocation facility Managed services hosted in a colocation facility Public cloud providers hosted in a colocation facility Traditional colocation remaining virtualised and VPC infrastructure housed in a colocation facility The evolution of cloud-based IT is not an either/or proposition. Both hybrid cloud and enterprise asset colocation may be viable options for any organisation looking to leverage rather than replace or abandon existing internal IT frameworks, tools, infrastructure and processes, because a combination of these elements can offer the essentials of on-demand access, self-service rapid provisioning and scalability. This means hybrid cloud can satisfy the resource requirements of lineof-business managers, application developers and IT operations personnel, while maintaining a secure, reliable and policy-driven IT infrastructure IDC Document # AU29015Z 5
6 About IDC International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1,100 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For 50 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. IDC Australia L11, 160 Sussex Street Sydney, NSW 2000 Australia idc-insights-community.com Copyright Notice This IDC research document was published as part of an IDC continuous intelligence service, providing written research, analyst interactions, telebriefings, and conferences. Visit to learn more about IDC subscription and consulting services. To view a list of IDC offices worldwide, visit Please contact the IDC Hotline at , ext (or ) or sales@idc.com for information on applying the price of this document toward the purchase of an IDC service or for information on additional copies or Web rights. Copyright 2015 IDC. Reproduction is forbidden unless authorized. All rights reserved.
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