Digital Infrastructure Strategy: Comparing on-premises with cloud and colocation


When it comes to digital infrastructure, deciding between utilising either ‘on-premises’ or cloud remains to be a divide amongst all business decision makers and both sides have their benefits, depending on which way you look at it.

Considering cloud for example, its often believed to be a runaway success. The UK Regulator Ofcom had produced a report into the domestic cloud service market and noted that the UK cloud infrastructure market is expanding, with overall revenues increasing from a rate of 35% to 40% annually.

Despite that, Synergy analysts have discovered that by 2027, enterprise data centres will still account for more than a quarter of data centre capacity. This year, there were 350 UK IT leaders involved in a 2024 research project, which recorded 93% of its respondents who have been involved with a cloud repatriation project in the last three years. Furthermore, 25% of those businesses have already migrated half or more of their cloud-based workloads back to an ‘on-premises’ infrastructure.

However, for many businesses, especially those experiencing growth, SMEs and medium-sized enterprises, the reality is there are two types of ‘on-premises’ infrastructures. Some businesses (usually within technology) will host their own data internally within their own data centre and there are others that will host their entire IT infrastructure within their own office.

The latter group of companies are often seeking solutions to manage their servers and treat it as a critical asset which they need to protect.

Migrating to serviced offices

Businesses that are experiencing growth or are already at a medium-sized level, tend to be already discussing their next steps. Usually driven by the increase in energy prices, higher borrowing, operational costs, and evolving work patterns, they tend to reassess their property portfolios. One focus has been the migration to serviced offices.

Lambert Smith Hampton, Commercial property specialist cites Mordor Intelligence forecasting: “that the UK market will grow by 8% per year during 2022-27.” There also been an ‘exceptional rise in demand’, for flexible offices in the UK, according to Savills reports. It also highlights that the increased demand has led to an increase in prices by 15% and enquiries are up by 17%.

Despite that, issues have begun to arise with serviced offices. With critical business technology being operated within a shared space, restrictions have emerged.

First off, serviced offices are rarely equipped with the necessary infrastructure and connectivity to host high-growth company needs. The power supply is shared throughout the entire building and can therefore be insufficient. Also, connectivity options and data management capabilities tend to be at a bare minimum.

Shared offices also lack the necessary physical and cyber security assets. With the demand in costs, a serviced office typically has less physical security than a data centre and on-site staff aren’t comprehensively trained in cyber-security. From a technological perspective, serviced offices are more vulnerable to cyber-attacks because they use less secure connections to keep the costs low.

Finally, serviced offices have limited space for businesses looking to grow. By having a limitation on room-size, this can restrict business attempts to scale their IT infrastructure, because their office operators need to prioritise space for furniture etc.

Colocation data centre

When it comes to digital infrastructure, serviced offices often bring challenges for high-growth businesses. It is difficult for them to operate their own, expensive property facility or carry their ever-expanding infrastructure with them. On the other hand, businesses can experience a lack of control over their own technologies, so are forced to reduce their control over systems, and key processes.

Then there is the case of growth not being a ‘one time deal’ for businesses. It goes beyond legacy on-site strategies, expansions and adapting their infrastructure with every opening of a new facility.

With a colocation centre, businesses can move their IT infrastructure, while focusing on their growth and agility.

Firstly, businesses can exploit a flexible office space to move, optimising their capital expenditure (CAPEX) investment and operational expenditure (OPEX), by acquiring the minimum they need. In context, this is often a complete migration to OPEX as businesses seek to release themselves of expensive liabilities.

The increased agility can fuel businesses to expand their operations. They also receive reassurance of greater security, and as they evolve, their colocation partner can also advocate a wider range of suppliers in connectivity, and ecosystems.

Business operations can become more resilient as the colocations provides managed connectivity, power and cooling issues which can assist their sustainability concerns.

The issue however for businesses, is finding the right colocation partner who are local to them, available for support across the UK and can deliver transparency at a reasonable price.  However, once a business finds a suitable colocation supplier, than they can benefit by splitting their IT infrastructure into a dedicated colocation space and benefit with the best of both worlds. They can gain an optimal operation focus with more control over costs and greater flexibility to grow.

Adopting an interconnected approach

To optimise any IT infrastructure migration, businesses need to clarify their approach within the decision-making process. They can do that in five simple steps:

  1. Establish what the data is going to be used for and thus, the primary attributes in successfully managing it. Is speed of access the top concern? Or security? Or real-time analysis? Consider scalability, business continuity and disaster recovery.
  2. Define the technologies that will most effectively serve these key purposes. Technically, this means assessing space, power, cooling, and connectivity requirements and accounting for data volume, bandwidth, and downtime.
  3. Find and connect with suppliers in those spaces that are prepared to become real partners. In a digital, data-driven age, the software and infrastructure a business is built on, matters. Tour facilities and develop service level agreements (SLAs).
  4. Develop a detailed migration plan that anticipates delays and establishes clear definitions of success. Install and configure hardware to achieve this, spanning routers, switches, firewalls, load balancers and virtualization platforms and hypervisors if applicable.
  5. Keep on eye on the future: embracing data and taking steps towards managing and optimising it, typically accelerates growth for a business. As such, businesses must ensure that any strategy to put the data in the right place now, does not mean it is in the wrong place tomorrow.