Ecosystem Proximity: The Advantages of Colocation Adjacency to Cloud Providers

Businesses are looking to connect seamlessly to their digital partners and larger data ecosystems

Catie Merrill
Ecosystem Proximity: The Advantages of Colocation Adjacency to Cloud Providers

Contributions by: Jason Lee, Global Solutions Architect at Equinix and Aivars Apsite, Healthcare Practice Manager at HPE

It is no secret that one of the known benefits of the public cloud is ease of transaction and the ability to offload data hosting and associated management tasks to a third party. Yet, as discussed in our last blog, many businesses are seeking alternatives for a more balanced solution that allows them to outsource their data centers, but not necessarily migrate entirely to the public cloud. In our view, the HPE GreenLake at Equinix solution addresses the hybrid-minded business by offering privately hosted, fully managed infrastructure solutions with low-latency connectivity via colocation facilities in high proximity to major hyperscale clouds such as AWS, Microsoft Azure, and Google Cloud. In this post, we take a deeper look into how colocation can be an ideal fit for HPE GreenLake deployments, not only due to the data center outsourcing aspects of colocation, but rather the interconnection capabilities vendors like Equinix provide. This is because in the colocation model, private interconnections, both physical and virtual, are essentially how ecosystems are formed as they allow customers to access cloud and IT service providers and connect their array of IaaS and SaaS offerings. As digital transformation proliferates and new horizontal and vertical ecosystems form, private connectivity will become increasingly valuable to customers.  Let’s break down two of the common benefits of colocation and its role in enabling digital ecosystems:

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  • Cloud-adjacency: For businesses with latency-sensitive workloads, in areas like gaming, payments, streaming and entertainment, a high-speed connection to various business partners and consortiums is especially important and often these businesses cannot afford to compromise on latency, a common risk when deploying workloads across multiple public clouds. As such, many customers will deploy HPE GreenLake inside their own data centers but placing HPE GreenLake at Equinix can unlock a number of opportunities customers cannot realize on-premises leveraging Equinix’s cloud on-ramps and network providers located inside Equinix at the edge. Location is an issue of strategic importance to enterprises: while public cloud provides fast access to large provider ecosystems, they don’t necessarily want to be locked into the cloud across all their business applications and infrastructure. Undertaking a hybrid strategy using colocation allows them to offload data in digital edge hubs while accessing ecosystems of over ten thousand partners, providers, and customers that Equinix has built with its global data centers.
  • Cost optimization: The concept of ecosystem proximity is particularly important when weighing the issue of cost; many organizations have underestimated the cost of processing data in the public cloud versus only storing it there as highlighted in a 2020 publication discussing NASA’s cloud migration. The agency had planned to move its Earth Science Data and Information system to AWS, but NASA had only assessed the cost to store data in the cloud while overlooking data retrieval costs. The result of NASA’s audit? A cloud bill with egress charges to the tune of $30 million annually by 2025. In many cases, organizations like NASA have become the rule rather than the exception, as in talks Technology Business Research, Inc. (TBR) has had with enterprise buyers, we find lack of cost transparency to be a leading pain point in public cloud adoption. Colocation provides an ideal alternative for customers, whether the use case is NASA’s data set or various IoT devices, autonomous cars, or branch offices in dispersed locations. In all these scenarios, massive amounts of data are being produced, and it becomes cheaper to process and retrieve this data closest to the source. With locations roughly 1-2 milliseconds from public cloud partners, working with a vendor like Equinix will allow customers to address different use cases, such as generating data at the edge and then porting to the public cloud for data analysis.

New ecosystems are forming: Horizontal and vertical use cases

Enterprise Resource Planning (ERP)

According to TBR’s 1H22 Cloud Applications Customer Research, 34% of respondents are running ERP workloads inside the data center, up from 28% in the previous six months. While this suggests ERP workloads are actively moving away from on-premises environments, we believe the customization and cost challenges often associated with public cloud have many customers seeking alternative ways to modernize ERP. The looming 2027 deadline to move to S/4 HANA is driving this activity, and hosted Infrastructure-as-a-Service (IaaS) solutions such as HPE GreenLake with Equinix can provide customers with a preferred way to run their SAP instances in the same location as other relevant SAP and SaaS applications, which improves overall application performance and reliability. In this model, customers may also benefit from lower data egress costs associated with moving data across environments and greater flexibility to customize their ERP deployments.

Electronic Health Records (EHR) in healthcare

Certain industries and workloads are particularly well-suited to realize the benefits of ecosystem proximity mentioned above, and perhaps the best example is that of the healthcare industry. While in general, healthcare has been slower to embrace technology-driven transformation, health systems appear to be at a turning point. Organizations are starting to see the need for high-performing connectivity and cloud-ready solutions to better connect the clinical, operational, and regulatory aspects of healthcare to transform patient experiences. However, to deliver that degree of change, EHR systems such as Epic must be designed to securely handle heavily regulated, secure sensitive patient data from a variety of sources, connecting to healthcare and business applications while enabling immediate patient access from anywhere. The combined HPE GreenLake with Equinix hosted IaaS consumption solution make sense for healthcare providers looking to re-architect their EHR while undertaking data center rationalization efforts to optimize costs, improve disaster recovery (DR) postures and repurpose valuable IT staff for other business critical activities.

A combination of ecosystem proximity and fully managed services moves customers out of the data center business, with the benefits of cloud  

For organizations that have workloads not well-suited for public clouds yet wish to move beyond the data center walls to scale their business, HPE GreenLake with Equinix is an ideal solution. The solution’s fully managed, secure, consumption-based functionality and metering capabilities enable customers to realign and focus on core business models.  Couple that with the benefits of leveraging a large global footprint of colocation facilities with private interconnections into local clouds, networks, SaaS providers and partner ecosystems allowing organizations to bridge the gap between new cloud-native assets and existing legacy assets. As HPE CIO Rashmi Kumar noted on the Oil and Gas Digital Doers podcast, “the need for technology…has amazingly accelerated during COVID [time]. And we can bring in solutions [so that] our customers don’t have to increase the number of [internal] people to manage or maintain infrastructure…they want their expensive resources, their SMEs, to be busy reinventing their business model versus [thinking about] ‘how do I do compute or memory or storage of data?’”

This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. ©Contact Technology Business Research, Inc. for permission to reproduce.


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Catie Merrill Guest Author: Senior Analyst with TBR
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