Many writers in the tech space buy into a narrative wherein the market for traditional forms of hosting are being eroded by the increasing popularity of cloud platforms and servers. What this zero-sum analysis fails to account for is the way that enterprises tend to go about cloud adoption.
While there are examples of companies that are interested in going all-in with public cloud technologies, for the vast majority, that isn’t an option. The public cloud is extremely powerful in specific scenarios: those where convenience, scaling, and cost are of paramount concern. But where other concerns are overriding — including complex regulatory issues, privacy concerns, and other situations where keeping data in-house is important — public cloud may not be seen as the best choice.
There is still considerable space in the market for dedicated server hosting, where a company can be absolutely certain that they have complete control over access to hardware and the data it stores.
Rather than indulging in the zero-sum narrative, smart corporate decision makers are analyzing the specific needs of their companies and building infrastructure from a range of components. That includes the public cloud, but it almost certainly also includes private cloud deployments, which may be a managed deployment from an enterprise private cloud hosting provider or a private cloud built on top of dedicated servers using technology like OpenStack and Hadoop.
Large enterprises have long been leery of the public cloud and most current growth at the top-end of the cloud market is being driven by investment in hybrid clouds, which allows businesses to leverage the benefits of cloud technology while apportioning their data between platforms according to technological incentives and perceived needs.
A recent survey from Infonetics Research showed that enterprise adoption of the hybrid cloud is likely to double by 2015. Infonetics analyst Cliff Grossner commented that:
“The transformation to the cloud is spelling disruption and opportunity for network equipment vendors, who would be wise to demonstrate how their offerings can be part of a hybrid cloud environment where interoperability between network management, server virtualization, and data center orchestration platforms are critical factors for success.”
For hosting providers to access the enterprise segment of the cloud services market, which is likely to be the fastest growing segment in the coming years, we need to provide a mix of services that includes the public cloud, but also private cloud platforms attuned to the needs of enterprises, and dedicated server hosting — all of which must be interoperable. We will also need to be able to add value to these platforms by offering consulting and advice services to help enterprises optimally leverage a diverse infrastructure portfolio.