For Cloud Services, Colocation and Managed Hosting is a Way to Go Global – Fast

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Over the past few years, public cloud services such as Microsoft Azure, Google App Engine, and Amazon Web Services have made it easier and less expensive to host many IT applications. These very same cloud service providers have also been engaging in a heated battle to outdo one another in terms of features and pricing, as well as building out new locations globally.

While these clouds provide organizations the IT resources they need to quickly deploy applications in different regions (while only paying for what they use), this isn’t the only way to deploy applications across different geographies and achieve cost efficiencies. And, depending on the application, it isn’t always the best way.

Many businesses are choosing colocation and managed hosting as a way of efficiently connecting remote compute assets to their enterprises. But it is also being used by many cutting-edge and growing cloud services who would rather chose the colocation model rather than use another company’s cloud service.

In the past month, CloudFlare and Digital Ocean have launched major international been expansions in partnership with interconnection and data center provider Equinix.

DigitalOcean, a fast-growing cloud hosting provider, expanded to an Equinix data center in London, which is the latest step in a worldwide expansion fueled by revenue and significant venture funding.

CloudFlare, which provides web content acceleration and online security, more than doubled its footprint within Equinix’s data centers in July, significantly expanding its points of presence across North America, Europe and Asia-Pacific. Providing cloud-based content delivery network and Distributed Denial of Service mitigation, CloudFlare’s network traffic grew 400 percent in the past year. Global expansion was essential to serving its growing customer base.

In an interview with The WHIR, Nikesh Kalra, who’s in charge of Global Cloud Services at Equinix, explained that organizations like CloudFlare and DigitalOcean are choosing colocation and managed hosting because this model’s best suited towards their technologies, business models, and global expansion ambitions.

Kalra says, “AWS has a good value proposition for getting started, but you see more and more that it makes more sense to deploy your own infrastructure – you have more control over it, the economics may be more favorable.”

He uses the analogy of renting vs. owning a car. If you use a car a few times a month, it might make sense to rent one, but if you use it every day it’s more efficient to buy a car. “There is always a tipping point at which you scale so large that it becomes less efficient to rent the utility than it is to build it yourself.”

Kalra also notes that public clouds, in some cases, are becoming competitors to cloud service providers that would otherwise be customers. A clear example of this would be that DigitalOcean, which offers a hosting solution comparable to Amazon’s EC2. Some of CloudFlare’s offerings also overlap with Amazon’s CloudFront.

In order to differentiate, these service providers have to offer something different. In the case of using Equinix, this might mean having more reliability and higher performance. With its 101 data centers located in the middle of major metropolitan areas, Kalra says that service providers can reach 95 percent of businesses and consumers in the developed world within 10 ms of latency.

“[CloudFlare] has realized that their customer base is highly distributed and because of that, they actually need to be in a lot of locations to get closer to their customer base. the idea is that the closer you are to the end customer, the better that their user experience will be and the higher value your service will be.”

Equinix also allows customers to start with as few a one location, and then branch out to new ones. “It’s much more cost effective these days than it ever was to go global,” Kalra says, explaining that clients can simply “ship off their servers to an Equinix facility and immediately have an international presence.”

With two-thirds of its customers in multiple regions (the Americas, Europe and Asia-Pacific), Kalra says, “We can become their platform for growing globally.”

Colocation is also useful in conjunction with other cloud services. “Direct connect” services allow a company’s colocated assets to connect directly to the cloud provider so they can create hybrid IT models. This allows applications to have the elasticity and scalability of public clouds, while keeping other resources private.

In a recent report from IT consultancy Gartner, analyst Bob Gill notes that direct connect provides “the benefit of hybrid cloud without the complexity of building a private cloud.”

Equinix offers direct connections to AWS and Microsoft Azure, as well as hundreds of members of the Equinix Cloud Exchange.

Kalra says this “blended” approach lets the customer “own the base; rent the spike.”

More early-stage startups are going global from day one, and they find it appealing to have their IT run from cutting-edge data centers and managed by specialists.

While the growth of cloud computing has been highly publicized, colocation has been becoming more economical and, in many cases, a more robust solution that provides new options and more control, especially when used in conjunction with cloud services.

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