Cloud technology has enabled enterprises to scale their access to multiple applications and software services on a usage-based pricing model, and it’s led to exponential increases in the volume of data produced, both on-premises and in the cloud. So it makes perfect sense that cloud storage would be one of the next major growth markets. Mordor Intelligence predicts the global cloud storage market will reach $101.59 billion by 2023 at an annual growth rate of 22.49%.
Cloud storage takes much of the CAPEX and burden of housing large amounts of data out of the enterprise on-premises storage infrastructure and places (at least some of it) onto storage systems on one or more third-party cloud platforms. There are various ways in which you can put your data into the cloud (ingress) and take it out again (egress). Many companies present a tiered pricing model that prioritizes data by the frequency in which you access it, from the most regularly accessed data (“hot data”) to less active archival data (“cold data”). However, this can be a costly investment for companies with high data egress requirements, such as financial services or digital content companies. As a result, there is a growing number of cloud storage companies that offer a flat-rate, per gigabyte (GB) pricing model without additional egress charges.
Drivers of virtual storage
According to the Global Interconnection Index, the Interconnection Bandwidth capacity to privately exchange data between enterprises and cloud and IT service providers is expected to grow 160% annually between 2016 and 2020. This is spurring the rise of cloud storage. Some of the drivers of cloud storage demand include:
- Growing volumes of data generated by mobile, Internet of Things (IoT), artificial intelligence (AI), big data and real-time analytics technologies
- Increasing demand for low-cost data backup, storage and protection
- The rise of enterprise hybrid cloud storage requirements for disaster recovery and local data protection and compliance regulations
In addition, there are now a number of big players in the cloud storage market driving the supply side of this growing demand including: AWS, Dropbox, Google, IBM, Microsoft, Oracle, Rackspace and VMware.
The benefits of cloud storage vs. on-premises storage
There are multiple potential benefits to cloud storage over on-premises storage, including:
- Shifting from CAPEX to OPEX: Cloud storage helps you shift from more costly CAPEX to maintain on-premises storage devices, to a more economical OPEX usage-based pricing model where the cloud storage provider is managing the storage devices for you. This can provide you with unlimited storage capacity for less cost, depending on the type of cloud storage plan you choose.
- Time to value: The cloud storage consumption model provides a key metric to the business, which is time to value (from ideation to revenue). The faster your IT organization delivers on the business value, the faster you will capitalize on the opportunity or change course if the value is not realized. This methodology is standard nowadays for IT agility.
- Deploying hybrid cloud storage: Probably one of the most compelling reasons to go to cloud storage is the ability to create hybrid (private and public) cloud storage infrastructures to gain flexibility in where you put your storage. For example, you can leave more sensitive data that you don’t want globally accessed on-premises and still put data and applications in the cloud for greater accessibility by your employees, partners and customers.
- API Integration: Application programming interfaces (APIs) are a critical part of both technology and business ecosystems. IT organizations that master how to implement this capability will drive down costs, improve deployment efficiency, deliver on low-cost consumption and help the bottom line. Cloud storage enables this model and gives developers a new way to write one API call and integrate it with all of the cloud storage services for a fraction of the time and cost.
- Ensuring business continuity and disaster recovery: The ability to back up on-premises storage and recover it in the event of a system failure or natural disaster is another compelling reason to adopt a hybrid cloud storage strategy. Data replication and recovery in the cloud have access to unlimited scalability and can also be deployed between two cloud providers for additional business continuity and disaster recovery protection.
- Maintaining data protection and privacy compliance: Hybrid cloud storage also is a good choice for maintaining data protection and privacy compliance regulations by keeping protected data either locally on-premises or with a local cloud provider.
How private interconnection can help grow the cloud storage market
Private interconnection enables the direct and secure exchange of data between counterparties. This allows you to ensure that the data traveling between your on-premises systems, the cloud and your users is safe and secure from bad actors. In addition, you reduce your attack surface by storing data in the cloud at the digital edge, close to users, applications and real-time analytics, without backhauling it to a centralized data center. Putting data in private storage on-premises and in cloud storage at your digital edge also allows you to put in place the security policies and controls for data privacy and protection compliance where it is most needed.
High-speed, low-latency connections between data systems and clouds are critical to the success of cloud storage. By deploying storage close to your users at the digital edge, you will see faster data access and replication and recovery times than if the storage is stored centrally at a remote data center.
These are just a few ways private interconnection can help you deliver a more secure and high-performance storage infrastructure to your users and leverage the growing cloud storage market. For more best practices on how to deploy data storage in a hybrid on-premises and cloud environment, check out our Data Blueprint.