As cloud services continue to evolve and form a large part of UK IT spending, it comes as no surprise that virtualization is set to enjoy a successful 2016.
A recent study by the Cloud Industry Forum (CIF) found that four in five UK organizations formally adopted at least one cloud service in 2015, whilst seeing a year-on-year rise in the uptake in cloud services from 48 percent in 2010 to 84 percent in 2015. These figures show the ability for virtual servers to address two key factors in IT strategy: reducing carbon footprint and providing high power solutions. Both these factors are fueling the migration towards virtual services for organizations. In light of these moves there have been concerns that this could lead to data centers becoming redundant. This is simply not the case.
Essentially, data centers address a simple factor that virtualizing servers cannot -- providing a physical location for data storage. Many organizations still prefer knowing where their data is located and have instant access to their data should they need to. With 2015 being plagued by a plethora of distributed denial-of-service (DDoS) attacks, organizations will continue to see the benefit in splitting their resources between both cloud applications and data centre solutions, to avoid the risk of having all their assets stored in one place.
A combined approach between both cloud-based platforms and data centers will continue to gain momentum as industries including managed services, gaming, and tier two financial services drive adoption.
Both cloud and data centre providers are beginning to tap into the potential of a combined approach for its end-users, acknowledging that data centers located closer to the virtual server can experience enhanced connectivity, boosting speed of operations and reliability. Location of colocated data centers thus provides a key consideration point in 2016.
A good sign for colocated data centers is its continued growth particularly in tier two cities. With the "dog fight" of property rent in London, many data centre providers alongside its end-users are adjusting to the idea of having their data centers located on the outskirts of major cites, capitalizing on cheaper rent. In a growing market and with fierce competition from cloud-based providers, data centers are in the unique position of being far more aggressive on pricing. Rent was between 30-40 percent cheaper in 2015, and with prices set to stay at this low rate, it provides a more cost-effective model, particularly beneficial for SMEs and start-ups.
Aside from the financial benefits of lower rent, the debate between capital expenditure (CAPEX) and operational expenditure (OPEX) also comes into contention. The rise in colocation data centers has seen a shift in traditional IT infrastructure management with organizations quickly realizing the benefit of an OPEX model, and its flexible and refreshing approach to existing legacy IT systems.
Figures by 451 Research revealed that data centre space occupied by colocation providers is up 11 percent on 2014, and forecast to maintain this level of growth through to 2018, as organizations look to outsource more of their IT. CAPEX expenditure has become increasingly difficult to gain approval from the boardroom whilst the OPEX model provides a viable solution to prevent the additional costs incurred from overheads and staff. The more flexible contracts offered by data centers as well as having dedicated management of an organization’s data will allow them to invest their time and money into other business matters.
Perhaps the largest obstacle for data centers is the growing insurgence of the Internet of Things (IoT), which will prove to be a huge market for online activity. Gartner predicted that there would be close to 21 billion connected devices by 2020, creating an even larger demand on power consumption.
2015 saw longer durations in online gaming sessions, significant e-commerce activity fueled by events such as Black Friday, and the growing user base of streaming media such as Netflix and Amazon Prime. The boost in these activities will result in more devices being connected on a daily basis and thus the requirement for more data centers to meet the demands of increased power consumption.
Ultimately, the rise of the virtual servers will continue to thrive in the year ahead, yet the importance of data centers should not be underestimated. It’s not simply a question of which service to choose, but an understanding and appreciation of both. The combined approach of virtual servers and colocated data centers rewards its end-users with increased efficiency of operations whilst keeping costs to a minimum. The beauty of this relationship is that both can effectively co-exist and should be seen as a collaborative project rather than separate IT entities.
Greg McCulloch, CEO, Aegis Data.
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