Towards the end of 2017, global cloud giant AWS (Amazon Web Services) announced a new service called ‘Bare Metal Instances’. This allows clients to run their applications directly on physical services that are live in Amazon’s data centres – without virtualisation, in other words not really in the cloud at all. Critics have been quick to frame the move as AWS coming down on the traditional colocation solution and dedicated server hosting market.
Data Center Dynamics have stated that AWS “could undermine one of the main selling points of colo providers”. Of course, it’s more complex than that.
To begin with, it supports the stance that many data centre professionals have held since day one of the cloud, which is that some applications simply aren’t meant to run of virtual machines rather than physical servers. This may be for reasons of software compatibility and licensing – which could be interpreted as an argument to upgrade but can also be because of either performance and security matters that aren’t as easily addressed or to overcome.
Either way, it shows how the case for cloud isn’t always as clear-cut as some would have us believe.
Also, this move reflects how hybrid IT is still on the rise and how there’s now demand for suppliers that can do more to ridge the gap between the physical servers and virtual machines. Almost three in five of the growing number of UK businesses that have adopted the cloud have done so as a part of a hybrid IT estate. This shows that cloud infrastructure is an adjunct, not a replacement to physical servers.
So, why do we still need the traditional colocation market? There are many obvious reasons for companies to favour true colocation over what essentially dedicated servers provisioned in a cloud like way. Cost management is one for example. True colocation allows firms to use their own hardware as opposed to renting someone else’s, minimising their exposure to the risks of subscription-based pricing such as sudden price increases and hidden costs.
Even when there’s an argument in the longer term to replace legacy infrastructure with applications and services that can be delivered from the cloud, colocation is still the most obvious way to maximise ROI on that certain infrastructure until it reaches its end of life. In general, colocation offers a level of hands on control and flexibility – this is very valuable to companies with very specific requirements from their hardware. Something that standard dedicated servers or bare metal instances will never be able to match.
Lastly, it’s worth pointing out how a common reason for companies to use hybrid IT is to improve diversity of their supplier base – whether for reasons of cost management or as a continuity measure. And it would be therefore a step backwards for them to consolidate all their infrastructure under one cloud provider. In this sense it's far more important for data centres to preserve traditional colocation at its core of services.
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