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Technology will have an important role to play in supporting business growth opportunities as organisations begin to claw back the ground they lost during the coronavirus crisis.

It is likely that many technology-powered growth initiatives will rely on the flexibility of cloud computing, to enable organisations to deliver new products and services quickly, while maintaining a controllable and agile cost model that allows them to expand quickly as and when they need to.

But some applications, particularly those that have been designed as single tenanted, cannot shift easily to the cloud. They will major reworking, which is the main reason organisations continue to bear the costs associated with running their own datacentre facilities.

Colocation datacentre providers have carved a niche, helping organisations to lower the overheads associated with running their own datacentres. Multiple companies can rent server space in large facilities that offer all the necessary power, cooling and networking required to run their customers IT equipment.

Discussing how customer requirements for colocation are shifting, Jeff DeVerter, chief technology officer at Rackspace, says: A big change weve observed in colocation is the proliferation of smaller, closer to customer locations. We continue to see growth in private cloud deployments. They are being used in conjunction with public cloud resources or datasets creating a multicloud architecture. The lines between public and private are starting to become less visible which is a trend we expect to continue.

Deloittes latest technology, media and telecommunications predictions for 2021 estimate that cloud revenues will increase by 30% or more between 2021 and 2025. The coronavirus pandemic has forced businesses to look at new ways to grow.

As demand for public cloud services grows, colocation providers have carved a new niche for themselves as hybrid cloud specialists. They have needed to adapt due to shifts in the way enterprises want to deploy core business applications.

A Deloitte global survey of 50 CIOs, undertaken in April 2020, found that the proportion of total workloads done on-premise will fall to 35% in 2021 from 59% in 2019. According to the Deloitte study, CIOs expect public clouds share to grow from about a quarter to over a third (23% to 38%), with private cloud reaching 20% and hybrid cloud accounting for 7% of workload.

As a result, along with providing datacentre hosting for customers own systems, some colocation providers have expanded into managed services, where virtualised workloads are isolated in multi-tenanted server environments. While the public cloud is largely recognised as being the more secure and cheaper option for most enterprises, IT leaders are generally risk-averse and try to avoid being locked into the technical infrastructure of a single hyperscale provider.

This has led to an opportunity for colocation providers to evolve and rebrand themselves as multicloud and hybrid cloud providers, offering fast data connectivity to public clouds such as Amazon Web Services (AWS) and Microsoft Azure.

One of the first things that IT decision-makers need to work out is whether workloads are cheaper to run in the public cloud.

Some workloads are not so well suited to public cloud deployment. An application that does not require the elasticity needed to cope with peak usage can be more cost-effectively deployed in an environment that does not charge based on use. When using public cloud, public infrastructure as a service (IaaS) and platform as a service (PaaS) offerings, organisations are billed continuously as consumption occurs, instead of a one-time payment when they procure their datacentre capacity.

As analyst Gartner points out in a recent report, in cloud computing, organisations are confronted with the difficulty of creating accurate cost estimates. They are often hit by bills that they apparently cant explain and struggle to identify items that are responsible for spending. As a result, financial management is often overlooked until spending is out of control, warn Gartner senior director analysts Marco Meinardi and Traverse Clayton.

For multinational organisations and those companies with large branch networks, architecturally, the public cloud offers an elegant way to deploy a manageable IT environment. But it is not perfect.

Organisations need to consider latency in terms of how quickly data can be processed to deliver business insights. This is particularly relevant when data needs processing close to where it is generated or there are regulations that prevent data from being processed outside of the country where it is generated.

Edge devices in an industrial context, such as a wind farm, may each offer local processing in real time. Trend analysis may also need to be performed rapidly to manage unforeseen events, adapt to environmental changes and keep production optimal. To avoid latency and backhaul network congestion, it is largely accepted that such data processing needs to be run near the industrial facility, which has led some colocation providers to specialise in supporting edge computing. More advanced processing may require data being uploaded to the public cloud, such as for predictive analytics, which usually involves connectivity to the public cloud providers,

In its Datacentre and colocation market trends 2021 report, analyst Forrester describes the concept of data gravity, which introduces strategic decision points on expansion plans based on where data will be in the future.Careless enterprises can create data silos and make migrations, network access, and contracts costly, warns analyst Abhijit Sunil in the report.

Forrester urges IT leaders to consider a hybrid cloud model for deploying workloads. Here, critical applications are housed in a colocation datacentre and can have direct access to the cloud through gateways in the same datacentre.

According to ISG (Information Services Group), enterprises are embracing colocation in the datacentre market as a way to enable multicloud strategies and deal with concerns about data sovereignty, security and privacy regulations.

In an effort to save valuable time, money and space, many large enterprises will look to move in-house IT operations to managed colocation facilities or sell their datacentres and lease the space they need to operate, says Barry Matthews, partner and leader at ISG North Europe.

The 2020 ISG provider lens next-gen private/hybrid cloud datacentre services & solutions report for the UK notes that many enterprises in the country focus on colocation because it allows them to locate and manage data closer to their cloud, network and security functions. ISG reports that UK enterprises are increasingly viewing colocation providers as an extension of their business, with providers offering services such as tracking provisioning status, interacting with customer support and monitoring system health in real time.

In spite of Deloittes predictions of massive growth in public cloud services, ISGs research finds that about 60% of UK enterprise workloads still reside on-premise and many in private datacentres are operated by internal staff.

Among the reasons why businesses are choosing colocation, according to ISG, are the need for auditing data location, migrating software licences to the public cloud, hyper-converged systems capacity and affordability, and improved management tools.

With the UK facing the dual challenges of Brexit and the pandemic, the report sees UK enterprises moving cautiously with new IT projects. Due to Brexit, companies are not circulating large requests for proposals and requests for information, but at the same time, many are concerned about a potential shortage of niche tech skills. The perceived skills gap, along with continuous demand for innovation, could eventually lead to more IT outsourcing deals.

This skills gap was highlighted in a recent survey of 1,870 IT decision-makers for Rackspace Technologies. The survey revealed that more than a third (35%) of artificial intelligence (AI) research and development initiatives in the UK either fail or are abandoned, with a large proportion (48%) therefore outsourcing the tech support to trusted external partners due to a lack of internal resources.

The technical know-how to deploy hardware and software infrastructure for AI also exists in the area of high-performance computing (HPC). In Forrestersreport, analyst Sunil notes that almost all major IT providers now offer HPC infrastructure capabilities in varying degrees.

HPC workloads impose intensive physical requirements that include purpose-built, high-density datacentres that vendors provide directly or through partnerships with cloud companies, says Sunil. For instance, Cyxtera, Digital Realty and Equinix offer Nvidia DGX-ready datacentres for supporting AI-based deep learning applications.

It is largely recognised that hiring new datacentre staff is extremely difficult. The Uptime Institute recently reported that across Europe, the Middle East and Africa (EMEA), 81,500 new roles will be created for datacentre staff by 2025. This suggests a growing skills crisis, which the Uptime Institute believes will further drive enterprises to outsource at least part of their datacentre computing to public cloud or colocation providers.

While IT leaders are cognisant of the skills shortage in hot technology areas such as HPC and AI, the Uptime Institutes research shows that the skills crisis envelopes all areas of the datacentre. Enterprise facilities are currently the most numerous type of datacentre and are typically smaller than many colocation and almost all cloud facilities. According to the Uptime Institute, this often means there are fewer opportunities for economies of scale including for staff. For example, job roles such as IT hardware technicians and electricians are required in all datacentres, regardless of size.

Last year, in its Multi-tenant datacentre and services industry 2020 report, 451 Group described colocation as the obvious vehicle for connecting enterprises, service providers and cloud platforms.

UK enterprises frequently want to use more than one hyperscaler because each one has particular strengths related to vertical solutions, pricing and other factors. But as ISG points out, enterprises see some barriers to a multicloud setup, including orchestrating their workloads. This is one of the trends driving the expansion of colocation services. ISGs research found that many customers are turning to service providers to help them manage multicloud environments.

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How colocation fits alongside a cloud-native architecture - ComputerWeekly.com