Are Cloud Providers Pushing Clients Back to Colocation?

Originally Published on on August 26, 2014, Updated: December 17, 2017
By WHG Staff

When it comes to networking capabilities, knowledge truly is power. Those companies that rely heavily on their networks for the storing and sharing of business information know that without a strong working knowledge of their IT infrastructures, they risk encountering significant obstacles in recovering whenever those networks experience issues. Yet not every company has the knowledge needed to establish their own servers with enough bandwidth to meet their online needs, nor do they have the resources needed to bring on personnel to create and manage such a server for them. This leaves many smaller companies unable to compete with larger competitors who employ in-house support staffs.

Help Through Managed Hosting

Fortunately, these companies have other resources that they can turn to in order to meet their server demands. Data colocation providers allow them the opportunity to establish their own reliable server networks without having to maintain those networks themselves. Instead, their servers are housed in a dedicated colocation center, where they have immediate access to power reserves and support staffs to help avoid network downtime, as well as the bandwidth needed to support their online traffic. Whether they’re storing their own server within a center or simply renting space on an existing server, this managed hosting service allows these companies to enjoy the same level of network reliability as their competitors.

Yet that’s not to say that there aren’t drawbacks in working with a colocation provider. The glaring concern that those who rely on data centers typically have is network availability. With one’s entire infrastructure routed through a single server at a single location, concerns about the server environment are inevitable. The center itself can knock a server out and make it unavailable until those issues are resolved, and while colocation providers have safeguards in place to deal with such issues, try as they might, no provider can guarantee 100% operational efficiency.

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The Cloud

Such concerns have led many to turn to the newest craze in server technology: the cloud. Cloud providers establish a virtual server network through a single host server, meaning that the space clients are renting is in a virtual space as opposed to a physical one. These virtual servers offer a number of advantages over their physical counterparts, namely:

Scalability: A physical server can only offer so much server space. That means that if a client’s server space hits capacity during peak times, he or she can no longer handle any more traffic. In the cloud, extra server resources can be allotted to a client whenever they’re needed, meaning that his or her network can accommodate any level of traffic volume.
Costs: In order to protect themselves from constantly stressing their server capacity, many colocation provider clients will aim high in determining how much space they need to rent. While this protects them against crashes during high-volume periods, it also means that they’re often paying for space that’s not being used. In contrast, cloud server clients only pay for what they use. When any of the aforementioned additional resources are needed to support heavy online traffic, the client pays extra for them. Yet once that traffic dies down, he or she is back to paying only for the space currently being used. This also holds true for periods of low traffic volumes.
Set-up: Setting up a space on a cloud server is essentially like enrolling in a subscription service. Because the space itself is virtual, there’s no need to wait and see if a provider has physical space on which they can place one’s server. Thus, set-up is often as easy as applying for space with a provider and immediately being given a fully-functioning IP address.
Availability: When issues at a data center affect server performance, clients often have to wait until those issues are resolved to have their network access restored. Those issues are nearly eliminated in the virtual environment. Because a cloud service provider has so many servers at his or her disposal, he or she can route an individual client’s resources to another server should any issues arise.

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For all of the benefits that cloud servers offer, they also have their disadvantages. Cloud services often offer little extended monitoring, meaning that clients typically are only notified of issues happening on their own host server. Thus, they only learn of issues on the server network when their own servers go down. Network security in the virtual space is also a concern, as the lack of physical monitoring of cloud networks makes them prone to attack.

Can Cloud and Colocation Coexist?

Many of the more-established cloud service providers have developed methods to combat these issues. For those providers on the rise, they’re left with the difficult decision of having to either use their competitor’s services or risk exposing themselves to problems. Recently, however, many of these new providers have come up with a third option: a return to managed hosting. That’s right; many cloud providers themselves have recently chosen to follow the colocation model in establishing their host servers. While bucking the trend established by their predecessors, these providers are discovering that working with managed hosting services offers a number of benefits. These include:

Server management: The task of maintaining production workloads across multiple virtual networks falls to the colocation provider, who also assumes the job of monitoring the cloud environment.
Security: Colocation providers use the same security methods to protect their virtual servers as they do with their physical ones, namely:

1. VLANs
2. Firewalls

Hybridization: Some applications can’t meet their performance needs on the virtual server and thus need the bandwidth available from a physical one. A hybridized model allows these new cloud providers to offer their clients many of the best benefits of both the cloud and colocation worlds.

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There are some who feel as though by relying on the colocation model, these new cloud providers may be pushing clients back to it altogether. If many of the benefits thought to be unique to the cloud are supported by managed hosting, what’s to stop clients from devaluing those benefits in favor of the safety and stability offered in the managed environment?

Can cloud service providers survive relying on managed hosting services? Only time and client response to their services will tell. In the meantime, those up-and-coming cloud providers looking to gain a firm foothold in the virtual space may find that outsourcing their management to a colocation provider will make it easier for them deliver the security and stability needed to lure in those potential clients who are looking for such benefits in the cloud environment.

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