Written by Tony Simonsen, Managing Director at Equinix Australia
The network lies at the heart of cloud computing. Unlike having a server in your office, cloud service providers may incorporate infrastructure and application services located a long distance for customers. The resulting service latency and its corresponding effect on the end user experience are extremely important considerations. A single cloud provider will service customers in many locations. To be successful they must pay close attention to optimising their cloud backbones and edge connectivity to their customers. For this reason, network connectivity and provider choice are hugely important to cloud service providers.
We have experienced a rapid growth of cloud services customers over the last few years. Simply put, cloud service providers want to be in our facilities – not just to connect to networks and customers, but also to connect to each other. As a result, cloud has become an important vertical, which now accounts for over 20 per cent of our annual revenues worldwide. And the company remains mindful that more investments may be needed to keep up with demand. A concept that is gaining positive momentum is the idea of a carrier-neutral “cloud services hub” where cloud providers can interconnect to form vertically-aligned solutions stacks.
The cloud is about flexibility and choice. At the same time, delivery of cloud services may span significant distances – especially when virtualised workloads can be anywhere. Aligning cloud benefits with user quality of experience (QoE) requires a distributed service delivery architecture. The result is lower network latency, fewer interconnections, and better SLAs. Due to the rich ecosystem of cloud providers in key hub locations, many providers can directly connect to each other resulting in significantly greater performance, improved security, and lower cost.
In the past year, we’ve seen most of the cloud engagements originate from the U.S. expanding into the APAC market. However this year we are seeing more APAC providers roll out cloud service portfolios based on their foundation in managed services. For example, we have helped two Australian managed IT providers roll out their cloud services within the first few months of 2012. We’re also seeing stronger customer relationships in adjacent verticals including finance, telco, and enterprise. This is because many of these vertical customers have also started migrating portions of their business to the cloud.