“Cloud adoption is on the rise.” Can you remember the first time you heard this? You’ve probably heard it many times over the last decade. The latest statistics show the same thing: cloud adoption is on the rise.
But there’s another industry on the rise: colocation. And its rise is forecast to be substantial in the next decade:
Image via Allied Market Research
A more than 15% CAGR is impressive—and pretty much in line with cloud’s growth in the past decade. Does this mean that the growth of cloud will be stopped by that of colocation? Is this another instance of video killing the radio star?
Allow me to explain.
Where’s My Cloud? A Primer on Cloud Versus Colocation
Let’s take a quick trip down memory lane to the dawn of data storage. As businesses began generating more data, the more space they needed to host it. Once upon a time, a computer would take up an entire room. As technology advanced and storage capacities increased, computers shrank.
But there came a time when a hard drive (even a modern, 10+TB one) was no longer enough to store all the data a business generated and needed to access. Plus, the omnipresence of internet connections birthed the need for fast data transfers.
When you need fast, reliable access to tons of data you actually need two things: a place to store all that data and a way to transfer it. And, a key point here—both of these things need to be secure.
Businesses used to have to store and maintain this infrastructure on site. But now, data storage is mostly done outside of individual businesses, and there are two major options: cloud and colocation.
Cloud storage was enterprises’ sweetheart for more than a decade. Despite its security and safety concerns, it was somewhat reliable and somewhat affordable. Although it’s important to note that cloud costs are most often higher than they seem.
The deal is simple: sign up for a cloud provider’s services and you’ll get the storage space you need and only pay for what you use. It’s usually set up as a monthly fee—no more huge capital expenses for servers.
Poetic as it may sound, your data isn’t actually in a literal cloud. I’m sure I’m not breaking any news here.
But where is it?
Without on-prem storage, data needs to be hosted somewhere. Invisible bits and bytes still need a metal home. It may be out of (your) sight, but it has to live somewhere.
This is where things get murky: you buy your cloud storage in the U.S. from a U.S. company, but you rarely know where your data lives. Where are the servers holding your data? Typically, they’re a few thousand miles away, on a completely different continent with more affordable commercial real estate prices.
But that’s another story for another time.
So, your puffy cloud needs a physical home. Care to guess what that might be?
Yes, it’s a data center. And it might even be a colocation facility. Colocation is quite a literal term: it refers to a data center where companies can colocate their hardware (servers containing their bits and bytes of data) along with their peers. You pay for the rack space you use and you can scale up or down any time. Sometimes, cloud providers themselves resort to colocation instead of building their own data centers.
This is how cloud and colocation can grow shoulder to shoulder.
However, this is not all there is to the story. Cloud storage was sold in shiny packages with alluring promises by big companies, leading businesses to leave behind on-prem for distributed cloud hosting. As businesses spend more time in the cloud, however, they’re discovering the pitfalls and a more direct route to accomplish the same goals. You guessed it, colocation.
Who’s Leaving the Cloud Behind?
We have historic precedence here: 10 years ago, early adopters were moving to the cloud. Laggards were still holding tight to their on-prem hosting.
Those early adopters from 10 years ago have started to see the limitations of cloud storage: it’s unreliable, it has a lot of security issues, comes with an inherent lack of control, and is often more expensive than it looks.
But most enterprises aren’t rushing back to on-premise hosting (excluding those building their dedicated data centers). They are looking at colocation strategies instead.
The most recent Amazon Web Services outage happened less than a month ago, leaving thousands of businesses in the dark. This was yet another push for colocation. If you choose to store your data in a mission-critical facility that’s close to your HQ, you have no such worries.
Your data is a drive away anytime, no matter what happens—even in the case of natural disasters. You get all the benefits of on-premise storage, without the hassle and the huge costs of running your own facility, all at a predictable cost with flexibility to scale as needed.
Ironically enough, as the cloud industry matures, its shortcomings are becoming more evident. So it’s not just early adopters that move to colocation facilities. It’s everyone that realizes migrating certain digital assets out of the cloud gives them a best-of-both-worlds options.
Even your typical late adopters are ready to skip the cloud phase and move straight from on-premise hosting to colocation. It’s more reliable, more secure, more scalable, and more affordable (once you cut through the pricing used for marketing).
Is Colocation the Perfect Solution for Everyone?
It’s not. Despite all the skin we have in the game, we could never claim that. And we would urge you to steer clear of any seller (of anything!) that claims what they’re selling is everyone’s silver bullet.
Nothing is a one-size-fits-all solution when it comes to data storage. A lot of businesses in Iowa have had tremendous growth supported by their colocation strategy—we’ve had front row seats to it. But for others, the cloud is ideal. For many, however, a hybrid approach is proving optimal—mission-critical systems and data backups in a colo facility with other digital assets in the cloud.
If you’re planning a major data migration endeavor soon, be sure to talk your options through with storage and connectivity experts before you take the plunge.
At HTDC, we are always ready to advise you on your best options. Schedule your virtual facility tour or a free consultation call with one of our experts.