Hybrid & Multi-Cloud are hurting data center real estate? We might disagree

The demand for new and faster technologies has made the data center landscape increasingly complex.


The migration of IT workloads into the cloud continues with great velocity, and, as a result, new physical and virtual technology stacks are being developed with greater intricacies that can sometimes bring unintended consequences. Without proper planning, this can lead to overly complex environments that are difficult to manage and scale, impacting the physical space that houses these technologies. Whether it is on-premise or as a contributing factor to the evolving dynamics of data center operations, how will new technologies impact current and future data center space requirements?

What are Hybrid Cloud and Multi-Cloud environments?

Demand for deployment in cloud environments continues to grow even when sales for enterprise cloud systems seem to decline. This trend is validated by the growing popularity of solutions such as Hybrid Cloud and Multi-Cloud environments that deliver the benefits of the cloud while delivering on superior security and compliance with on-premise solutions.

While Hybrid and Multi-Cloud are often used interchangeably, at their core they mean different things. According to most definitions, Multi-Cloud configurations always include public clouds but may or may not include on-premise infrastructure. Many corporations run several clouds, employing multiple architectures to address different applications and meet distinct purposes.

Hybrid Cloud configurations always include private and public clouds. Private clouds tend to be proprietary to the enterprise but can sometimes be hosted in a colocation facility. Public cloud infrastructure will often include combinations of solutions available from Amazon AWS, Microsoft Azure, Google Cloud or any other public cloud player. Services often are designed for different business tasks or projects, meet unique technical or business requirements and have varying cost structures.

In a hybrid environment the components are typically configured to work together in an orchestrated configuration. Multi-Cloud models, by comparison, involve different clouds for different tasks or applications and data and processing often remains in its ‘own’ cloud silo.

Whether it’s hybrid cloud or multi-cloud, how can real estate add value?

According to a Nutranix 2019 Cloud Index report, 85 percent of respondents selected Hybrid Cloud as their ideal IT operating model. IT professionals overwhelmingly believe the Hybrid Cloud to be the most secure, even over private clouds and traditional on-premise data centers, and most see their organizations benefitting from a hybrid infrastructure. However, they also say their current IT vendors do not provide the right solutions for building and managing a hybrid environment.

Infrastructure strategy dictates the priorities

In most instances a ‘lift and shift’ to the cloud does not often result in tremendous savings. Though on-premise provides higher security and peace of mind, a Hybrid Cloud strategy provides advantages such as flexibility, scalability and additional technologies such as hyperscale computing. Organizations like IBM, Dell Technologies, and Hewlett-Packard Enterprise aim to become the glue between Hybrid and Multi-Cloud deployments to harmonize the blend of private and public clouds as well as owned data centers.

But on-premise deployments are not going away anytime soon—a number of factors have slowed the migration of workloads to the cloud including increased costs and difficulties with regulatory compliance requirements. Many organizations have kept or repatriated cloud computing in-house employing a private cloud model, often to address security and governance concerns. In addition, IT teams are less likely to see the value of switching away from cost-effective IT expertise, highly familiar with in-house applications and able to rapidly tailor and adapt to an organization’s needs. Often, there is no compelling technical or economic business case to change.

There is no question that the tailwinds moving more and more IT workloads to the clouds are very strong. This, in turn, is releasing real estate from Enterprise portfolios in favour of the massive build in data centers for the cloud providers. Notwithstanding, Multi-Cloud and Hybrid configurations bring renewed consideration to on-premise solutions. How these factors affect the need for physical space in Enterprise and Cloud Solution Providers is exactly the strategic insights and data center advisory services that Cushman & Wakefield provides.

For more information on Cushman & Wakefield’s Global Data Center Advisory Group, contact the Cushman & Wakefield Data Center Advisory Group.

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