Partners see growth in maturing on-premises cloud technology

Channel partners and their customers have been investing in the public cloud for a number of well-documented reasons, but it’s not the best option for everyone.

Some customers have applications that are too sensitive or expensive to move to the cloud. Instead of giving up on all the advantages the cloud can offer, companies have sought ways to bring the cloud on premises, and partners and cloud providers are working with them to make that happen.

Chris Weis

An on-premises cloud, often referred to as a private cloud, isn’t a new concept.

“But the technical resources and the business needs required to make a private cloud happen …  have rapidly accelerated — beyond where they were even one or two years ago,” said Chris Weis, director of private and hybrid cloud solutions at World Wide Technology (WWT).

Paul WilkinsonPaul Wilkinson

Channel partners should care about on-premises cloud opportunities because not every customer is going to move every workload to a public cloud such as AWS, Google or Microsoft Azure, said Paul Wilkinson, chief growth officer at 1901 Group, an MSP in Reston, Va., and a Leidos company.  “So, there is going to remain a need for on-premises capabilities or private clouds to meet customers’ needs.”

Technologies, consumption models mature

The technology offerings, combined with service-delivery automation practices available in the private-cloud market, are at a point where enterprises can build and operate on-premises clouds for internal customers, clients and partners, Weis said. “Software-defined data center technologies, the maturation of platform and DevOps practices, and new hardware and software consumption models are all enabling this.”

But the technical resources and the business needs required to make a private cloud happen … have rapidly accelerated — beyond where they were even one or two years ago.
Chris WeisDirector of private and hybrid cloud solutions, World Wide Technology

With an on-premises data center, companies tend to overbuy infrastructure, whereas in the public cloud they pay only for what they use, said Kent Christensen, practice director for the Cloud and Data Center Transformation organization at Insight Enterprises, a solutions integrator in Chandler, Ariz. In the public cloud, “you don’t have to deal with Capex,” he noted.

Kent ChristensenKent Christensen

That said, “public cloud is not always cheaper and sometimes is more expensive,” Christensen said. This opens an opportunity for private clouds.

“On-premises cloud is growing hundreds of percent a year for us,” Christensen said. “The number of clients is blowing up and they’re trying to get their hands on it.”

Security, networking and as-a-service are Insight’s top three offerings, he added.

Colocation extends on-premises clouds

Wilkinson believes the big trend right now is to move workloads into the public cloud. On-premises or private clouds are usually geared to one tenant, with that cloud residing in a customer’s data center or colocation facility, he said.

Colocation is often used to extend a customer’s on-premises cloud when there is a need for underlying physical core infrastructure for bandwidth or disaster recovery services, Wilkinson said.

“We’re seeing customers moving out of legacy data centers into a colo and then they’re starting to use those [facilities] to support their on-prem cloud and connecting that into public cloud,” he said.

WWT views colocation simply as a different location to build and operate a private cloud — although who does the building and operating varies greatly by customer client and colocation provider, Weis said.  

“We see good alignment between the colocation providers and the MSPs — and sometimes they’re the same entity,” he said. “Some customers’ clients may want to build and operate their private clouds housed in colocation facilities. Others may choose to only operate them but let the colocation provider manage the builds.”

Many customers’ clients are looking for a fully managed offering of build and operate so they can focus exclusively on consumption, Weis added. “This sounds a lot like public cloud, and, in many ways, it is — which is why it resonates well within the industry.”

“Ultimately for enterprises, it’s a tradeoff between complexity, cost and flexibility,” Weis said. “The MSP, plus colocation model, offers a wide range of individualization.”

Other private cloud options

Also trending right now is for cloud services providers to extend their capabilities into a customer’s on-premises environment. For example, AWS has a service called Outposts, which provides its infrastructure and services on-premises. Similarly, Microsoft offers Azure Stack.

“Essentially, they’re providing you with what they’d provide [in the public cloud] but packing it up and moving it into your environment,” Wilkinson said. “So it’s a reverse move.”

For customers that have legacy apps and don’t want to use a public cloud environment, data-center-as-a-service gives them the ability to lease or rent what they consume in an on-premises model, Wilkinson said. “It allows you to provide an on-prem private cloud in a way that’s paying for consumption without having to buy capital equipment,” he said.

The downside is that the public cloud has been providing capacity, infrastructure, storage and compute on demand at scale, “so as-a-service data centers will struggle to keep up with that momentum,” he said. “The use case for as-a-service data centers will probably shrink over time because they’re competing” against the major cloud providers, and it’s hard to achieve economies of scale.

But Wilkinson noted that there will always be companies that don’t want to put data in the public cloud.

Partners can help customers restructure their on-premises data centers to more closely resemble cloud environments, creating services that map to their needs and growth strategy at a potentially lower cost, Christensen said.

Wilkinson agreed that partners must understand the customer’s needs so they can provide the right offering. This requires knowledge of a customers’ apps, security and environment, he said.