Re-thinking Colocation in the Age of Cloud Computing

Keao Caindec is the Chief Marketing Officer for 365 Data Centers where he is responsible for marketing, communications and product management.

Cloud computing has swept through the IT infrastructure industry and made it easier for companies to use servers, storage and software applications on demand and “as-a-service.”

But what about the data center colocation industry? It has changed very little over the last eight years and remains as inflexible as ever with multi-year term agreements and big minimum space requirements.

Businesses want more flexibility to run temporary workloads, build private clouds and have a less risky path to migrating applications to a hybrid public-private cloud model. What can be done to make colocation easier and more “cloud-like?”

The future of cloud computing

Gartner has predicted that “this is the end of the beginning phase of cloud computing.” While this may be true for large enterprises and startup tech companies, the vast majority of applications still run on IT infrastructure dedicated to a single company and are housed either on premises or within a third-party colocation facility. In 2014, public cloud IaaS will be just one-third of 1 percent of the overall worldwide IT spending, according to Gartner.

Businesses, especially small and medium-sized businesses, will take small steps to migrate out of their own on-premise data center environments into more secure and reliable environments. The majority of businesses will run their applications across a hybrid cloud environment made up of dedicated infrastructure, private cloud and public cloud IaaS and Software-as-a-Service (SaaS).

To support a hybrid cloud environment, we need to re-think colocation. Colocation services need to be more flexible and cloud-like to better align with cloud consumption models.

Keeping up with the cloud

Here are five ways that colocation services need to change to keep up with the cloud.

1. Commitment-free contracts:  Contracting for colocation services typically requires a multi-year agreement and large minimum space requirements. In order to align with the on-demand nature of the cloud, colocation services agreements should have options for on-demand colocation with no minimum term commitments.
2. Online ordering: Pricing, terms and conditions for colocation services should be available online. In order to support temporary workloads and to scale private cloud deployments, organizations should be able to order colocation services online and expect fast fulfillment. Combining online ordering and commitment-free contracts will allow companies to realize the benefits of agility and scale in a secure dedicated colocation environment.
3. Direct connect: Colocation should have easy “direct connect” access to public cloud providers as well as local on-demand infrastructure. As much as possible, interconnection to cloud IaaS should be automated.
4. Managed services: With cloud IaaS, you’re able to deploy virtual servers, configure virtual firewalls and use cloud-based storage through automated web-based interfaces and application programming interfaces (APIs). In order to replicate this, colocation providers need to offer more than just remote hands. They need to offer basic managed services such as firewall management, server management, backup and recovery services as well as other managed IT operations services for the dedicated infrastructure of each client.
5. Customer service: Colocation customer service needs an overhaul. Today, most customers are treated like tenants, especially as colocation providers try to think more like real estate investment trusts      (REITs). Cloud users want easy access to information and the ability to speak with a knowledgeable customer service manager or technical support person.

If colocation services are altered in these five ways, the gap between the way businesses consume infrastructure and the way they have been buying colocation will quickly begin to shrink.  By changing colocation as we know it, businesses will realize true added value, especially as they seek to meet regulatory compliance requirements and/or create private or hybrid cloud environments.

Changing an entire industry’s way of doing business isn’t easy. However, for businesses to realize the value of colocation, change has to be a priority.

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