Movement of Co-location Facilities to The IaaS Cloud Services Business (Part 2 of 3)

Mark Hill

By: Mark Hill - Chairman, BlueLock, and Managing Partner of Collina Ventures

Category: Technology

As server technology becomes more and more important to the health of a company, we are seeing a shift to moving a company’s servers to outside buildings designed specifically to house servers. These are known as co-location facilities. These facilities have security, power, cooling and Internet access to keep them safe, secure, and running at high availability.

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Co-location facilities are evolving and many businesses are offering additional services such as changing backup tapes, shared firewalls and routers, and operating system patching. By providing these managed services, co-location facilities offer more value to customers.

It is natural for the successful co-location businesses to continue to improve their service offerings and offer more value to their customers. Co-location companies are moving to owning their servers and renting out access to compute power and data storage. The key to the change in the co-location business is that they manage these compute and data storage resources for a large number of customers. As the number of customers increases, the management of servers becomes dramatically more efficient due to the scale and centralization of expertise.

The service of renting out compute power and data storage is known as Infrastructure-as-a-Service, or IaaS. It is part of the “Cloud” phenomenon that we hear about today. Even the traditional computing players such as HP, IBM, Microsoft, and VMware have initiatives around cloud computing, evidence that the market is at the front of a major shift.

IaaS also offers the promise of proper allocation of resources to manage peak loads and disaster recovery. Many companies need to over-allocate resources to ensure peak load performance and then replicate the expense off-site for disaster recovery. This can make the cost of the compute and data resources four times more expensive than what would be typically needed under normal operating conditions. IaaS can also lower the total cost of infrastructure by centralizing the expertise of managing increasingly complex systems.

Where IaaS shifts to what we now call “cloud” is where standardization and virtualization converge. I’ll talk about that convergence in my final post (part 3) coming shortly.

Next Thursday, check back for Mark's third article titled Impact of Virtualization on Cloud Computing Standardization

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