2016 was a year of growth for large IT solution builds in the cloud

In 2016 there were two major trends in the data centre industry that stand out. The first began in 2015 but gathered steam during 2016; large telcos divesting themselves of data centre operations. The second was increasing numbers of organisations moving towards cloud computing in a significantly major way, driven by the need for large amounts of capacity, yet also keen to make cost savings.

The move towards data centre asset divesting was a clear sign that some big telcos found it too expensive to maintain and upgrade data centres, given that they were not core elements of their business. You can argue that, by and large, these telcos struggled to compete with large cloud providers leading to the sale of what they consider their non-essential assets. 

Poor investments

While there has been a steady rise in enterprise demand for colocation services, the truth is that telcos are not specialised players. Some of the assets they bought were old, and significant upgrade investments were needed to bring them up to a good condition. 

Clearly at Cogeco Peer 1 we take notes of these shifting dynamics, but drawing directly from our own experience during 2016, we saw a lot more organisations moving to the cloud in a significant way. 

In ‘technology time’ cloud computing has been around for a long time, but generally speaking there has been a level of uncertainty and resistance on the part of organisations to move major operations into the cloud. This began to change during 2016.

Marked upswing

There has been a marked upswing in organisations buying large amounts of data centre space on a wholesale level so they can rapidly scale cloud-based operations and develop large solution builds. This is happening across the board from big data to IT services, network computing and web scale operations.

Of course, people are still buying small cloud services but this has been eclipsed to a degree by the large solution builds. And the motive is that cloud has been promising for some time: sheer scalability, flexibility, speed of response and good economics that deliver big cost savings.

Its true that CIO’s have been erring on the side of caution and often under buying infrastructure. Consequently, the organisation then needs to buy individual resources when they begin to run low. This leads to constant management of individual resources, reacting when necessary, and hoping that existing products don’t have end-of-life status.

Rolling out big data

These dynamics are now playing into cloud adoption as organisations seek to ensure they have enough capacity and infrastructure to, for example, roll out big data operations or move towards IT services delivery from the cloud. 

The theory of cloud benefits have been known for a long time; you don’t have to buy a lot of hardware upfront and accurately planning for three to five years’ worth of resource needs in environments such as big data and IT services is difficult to get right. In 2016, theory has started becoming practice. 

There’s also been a notable move towards hyperconvergence. It makes sense. Hyperconvergence essentially provides an entire virtual server infrastructure in a box. Customers can start small with one device and then add further similar units to scale the power and resilience without having to manage network, storage, server and the hypervisor independently. 

Hyperconvergence takes hold

Based on a modular setup that customers can add to as needs increase, it is an attractive proposition for some organisations. Hyperconverged infrastructure takes a bite-sized approach to data centre scalability. Customers no longer need to expand just one component or hardware rack at a time; they simply add another appliance-based node to a homogenous environment. 

In effect, the entire environment is a huge virtualised resource pool. Customers can expand this pool quickly and easily, as needs dictate and in a way that makes good economic sense. In summary, 2016 was a year in which organisations have begun to grasp the nettle as they aim to make big costs savings while ensuring ongoing capacity for large scale IT operations. 

Susan Bowen, VP & GM, EMEA, Cogeco Peer 1
Image source: Shutterstock/Omelchenko