Do Private Data Centers Make Sense Anymore?

Hybrid architectures have been a popular choice for enterprise organizations for years, but a mainstay of such infrastructure might be facing its sunset.

While the rational for a split public/private infrastructure may still exist, the logic behind doing so is dwindling thanks to new service models offered through public cloud service providers (CSPs). Let’s look at reasons why enterprises still choose to operate private data centers in 2021, the downside of going this route, and why new edge computing solutions may signal the end of the private data center.

Credit: Arjuna Kodisinghe via Adobe Stock

Why Do Enterprises Own/Operate Private Data Centers in 2021?

Years ago, IT decision makers steered away from public clouds for a variety of reasons. This often included concerns about data security, high availability, performance, lack of legacy/homegrown application support, and unexpected costs incurred when public clouds are not properly managed.

Over time, most of those concerns were either debunked or addressed by public cloud providers. For example, most IT professionals today consider public cloud infrastructures to be as secure as private data center alternatives, if not moreso. Additionally, public clouds have grown far more resilient and flexible when it comes to legacy/homegrown application support. Finally, cloud management tools have gotten increasingly better when it comes to estimating monthly service costs and automating processes to minimize out of control spend.

For most, the singular private data center benefit we’re left with centers on application performance. Applications that require large amounts of bandwidth or low latency transport often do not fair well when deployed inside traditional public clouds. This is especially true when end users are directly connected to their local LAN, which also houses the organization’s private data center. Both throughput and latency are likely to be superior on the local LAN and public clouds will always struggle with applications that require high levels of network performance. The primary reason for this relates to geographic distances between application users and the public cloud data centers that a CSP operates.

Traditional public clouds that are housed hundreds or thousands of miles away simply will not work For many latency-sensitive applications -- even with dedicated or direct-connect WAN connectivity between the customer and public cloud.

How Public Providers Address Private Data Center Performance Benefits

Because application performance is the last true benefit of the private data center, public CSP’s and many telecommunications providers are building-out micro clouds or metropolitan edge infrastructures to bring traditional cloud computing services much closer to end users. These edge services are highly scalable and can be deployed in geographic locations where most end users reside. For businesses that have embraced a work from home (WFH) or hybrid workplace model, metropolitan edge architectures are a great way to maintain low-latency performance times without massive private infrastructure buildout costs.

Alternatively, larger cloud providers now offer the ability for enterprise customers to extend their public cloud infrastructure buildouts in an on-premises corporate LAN or colocation. Examples include AWS Outposts and Azure Edge Stack. The benefit of this local edge service model is that the CSP is still responsible for the management and security of the on-premises hardware and software. Meanwhile the customer manages applications, data and services using the exact same tools and processes that exist within their traditional cloud deployment.

A Public Edge/Traditional Cloud Model May Signal the End for Private Data Centers

As metropolitan edge and micro cloud deployments continue to pop up around the globe, it highlights the fact that application performance is truly the last major hurdle that needs to be overcome in terms of enterprise organizations that need to own and operate private data centers. While there will certainly be businesses that continue to hang on to existing data centers for the time being, understand that justifying future budget dollars to upgrade such  private data centers will become an increasingly uphill battle.

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