Over the past few years, the focus has been on hyperscale and there has been an increased uptake in cloud usage, which has been further expedited by the pandemic and subsequent lockdowns.
There is no doubt that hyperscale has had an impact on co-location operators, but I believe this is both a challenge and an opportunity.
We work with clients in many different sectors and they are often at different stages of their digital journey. Some are well on their way with digital transformation while others are still wrestling with legacy IT and discovering what they have. It is often this, as well as the way companies are using or rely on their IT, that drives them towards a certain solution. For example, some of our clients in the Higher Education sector are involved in research and development projects that require high performance compute – and bleeding edge performance is the key focus and on-premise the solution of choice. Some are happy to put everything in the cloud and embrace the benefits of flexibility and agility which this provides.
Other organisations have bespoke applications or utilise legacy platforms that cannot be supported by the cloud, in its current form, or they may require a disparate estate for regional or customer reasons. And some organisations are simply not ready to make the jump and still have the need of highly available IT systems with the service wrap that a co-location operator can usually provide. These are often companies that are looking to move their on-premise IT to a specialist provider with the option of added services, before assessing which elements are suitable for the cloud.
One size doesn’t fit all
Let’s make no mistake, hyperscale continues to be an absolute game changer and occupiers of hyperscale facilities are often at the heart of the digitalisation transformation plans that we help implement and support. However, we are seeing some organisations that have discovered too late that the ‘cloud’ isn’t necessarily the best solution for them, certainly not on its own, or their ability to get there is much harder than first thought. Worse still, they have found themselves tied into long-term, ‘inclusive’ agreements that cannot be fully utilised as intended or do not support all of their requirements.
As a result, we are increasingly seeing that one size does not necessarily fit all, so we believe that there is a role for each and that increasingly clients are best served by a hybrid solution. Often this is the best way to find a balance between the technical and commercial considerations. Cost of course is a key consideration and some things are not economical to put in the cloud.
And of course, there are some opportunities for co-location providers and hyperscalers to work together. In order to maximise on the demand for cloud services, speed is often a key drive for a hyperscalers and a new build programme takes time. In many cases, regional co-location providers already have a presence and capacity that can be utilised, and they can benefit from long-term contracts. This can also benefit the other clients located there having ‘Express Routes’ or ‘Direct Connect’ into popular cloud services.
Down to the details
Before making any decisions, we would always recommend that organisations establish their requirement in detail. Without this they risk becoming aware of any issues once they are committed and when things quite simply can’t be moved. By then a contract is signed and IT service owners are keeping multiple environments operating to maintain service, probably those same environments which were dependent on closing and reducing cost for savings to be realised.
Companies can help to mitigate this risk with thorough due diligence of their existing and future IT requirements – from applications, hardware and supporting infrastructure, including site visits and stakeholder interviews to capture their requirements. During this process, dependencies and risks associated with the migration of a particular service can be established. This enables companies to define any enabling works which may need to take place or influence the sequence in which the migration is completed.
When deciding which elements of the IT are best suited to which service, there are other things to consider too. For example, some applications may be deemed business critical and therefore resilience is a key factor; for other less important applications, more cost-effective options may be considered.
By undertaking this deep dive upfront, organisations can focus on anything which may impact the target operating model or a quotation from a supplier and ensure that the goals and objectives are clear and consistent. It is at this stage that decisions should be taken about services that may not be suitable for the cloud and where they are in their operational lifecycle, which may influence how these are managed. This may involve hosting these on-premise or even replacing the service. It is also worth considering migrating these either first or last to further mitigate the risk. With significant cost at stake, it is details like these that don’t necessarily need a solution but do need to be built into the business case from the beginning.
In conclusion, I believe that whilst hyperscale has inevitably impacted the co-location market, there is definitely a role for each and a hybrid solution is increasingly attractive for end-users. Organisations have the opportunity to leverage the mix of available services and realise that the devil is in the detail, and the level of that detail will dictate the success of any changes and enable organisations to make truly informed decisions.
