On-premise data center use is in slow but steady decline as companies shift workloads to the cloud. But businesses are realizing the cloud is far from a one-stop shop, creating opportunities for colocation data centers.
More than three-quarters of IT leaders reported moving business intelligence, data analytics and data warehouses from public cloud platforms to colocation centers, according to a CoreSite survey released in July.
Repatriation after a cloud migration is not a widespread trend, analysts say. But there are instances in which it might be beneficial for businesses to reconsider where their workloads fit best.
“I think colocations are especially useful when you don’t have multiple sites for whatever reason,” said Jeremy Roberts, research director of cloud and core infrastructure at Info-Tech Research Group. “A school district or a municipality probably has multiple suitable places for a premises-based data center. A marketing agency that rents space in an office building might not have the same access to resources and could benefit from a well-maintained site.”
Many analysts refer to a hybrid cloud model as an inevitable operating model.
But despite cloud’s benefits, many businesses struggle to contain costs and deliver the expected upsides of migration. Colocation centers offer businesses ownership of hardware, more options to guardrail costs and geographic advantages.
More than half of IT leaders cited stability, redundancy and uptime advantages as the biggest drivers of moving to colocation, according to the report from CoreSite.
However, Roberts said that in his day-to-day interactions with clients he doesn’t see a major move towards colocation services.
“Many do have resources deployed in colocations, but, if anything, they’re moving towards the cloud, or the colocation providers themselves are moving towards the cloud, positioning themselves as cloud providers with value-added services beyond basic hosting,” Roberts said.
Aligning workloads and business goals
In 2020, Gartner predicted that by 2025, more than four in five infrastructure strategies will integrate on-premises, colocation, cloud and edge delivery options, up from one in five in 2020.
Businesses with hybrid models rarely plan a complete migration reversal, according to Gartner findings. With that in mind, cost has become a huge barrier for businesses successfully migrating entire workloads.
When costs become “prohibitively expensive” businesses look to other options such as a data center modernization or a consolidation program, according to Matthew Brisse, research VP at Gartner.
“They're also moving from the big data centers to microdata centers, and even edge facilities,” Brisse said. “And they're absolutely moving to [colocation] for the connectivity, for the diversity and for the services that they offer.”
Traditionally, colocation centers were viewed as the stepping stones to cloud migration, according to Cyndi Tackett, SVP of marketing at Flexera.
“As IT estates continue to be hybrid, colocation centers will play an important role,” Tackett said. “Colocation centers eliminate the need to administer the physical data center; they offer a private connection between dedicated infrastructure and public cloud providers.”
Ultimately, the move really depends on enterprise goals and priorities. In 2021, nearly three-quarters of companies required repatriation for performance, cost or both, according to a survey commissioned by Virtana.
“It’s more about whether you have the resources/space to manage something on your own premises and a general desire for more complete control over the infrastructure stack than would be provided in the cloud,” Roberts said.
