Beyond Cloud First: The Rise of Sovereign and Hybrid Data Centres
The growing challenges with cloud
For years public cloud has been hailed as the future, with flexible, low cost, global scale. Almost infinite resources at your command, able to be turned on and off like a tap. In a major twist, organisations are now re-evaluating cloud strategies and exploring sovereign cloud and hybrid DC architectures. This appears to be in response to the reality of a new landscape where cost, control and resilience is overtaking the “cloud first” agenda.
Cloud costs have spiralled and what promised to slash CapEx has become a challenge of less predictable OpEx, with CFOs and IT leaders more focussed than ever on their monthly invoices. The complexity of managing cloud estates, including AI workloads, has left some feeling trapped. FinOps is no longer optional - cloud’s flexibility has become a financial challenge as organisations struggle to control spend and accurately forecast budgets. There’s more than just a financial play here though.
Sovereign Data Centres
Sovereign DCs are a concept gaining traction as enterprises look to mitigate risks of data jurisdiction and compliance. Data sovereignty can be a legal and reputational minefield. Organisations need to think hard about where their data lives and who can access it, or who “could” access it. Sovereign and “local cloud” promise control within national borders. The return to on-premises and sovereign cloud solutions are part of the solution to ensuring control of organisational data within borders.
Resilience and Security
Recent high-profile outages and security breaches have dented the myth of cloud being “always on”. Single points of failure can bring entire operations to a standstill. For regulated industries and critical infrastructure, the risk is very real. Cloud proponents will say you need to build for failure and assume outages, but there is no denying that hybrid infrastructure with an on-premises component offers a safety net.
AI Impacts
Training and running large models in the cloud can rack up eye-watering bills. FinOps teams are driving infrastructure decisions, weighing the cost of cloud versus on-premises resources. Will we see enterprises bringing AI workloads back in-house, seeking predictability and control over their costs? The interest in hyperscaler sovereign solutions and hybrid options seems to indicate we will.
The rise of the Co-Lo
Not every organisation wants to be managing its own data centre, and many have spent the last decade explicitly closing their in-house facilities. We see that managed co-location (co-lo) services can offer a middle path, the control and sovereignty of on-premises, with the managed support typical of the cloud. Providers are offering everything from bare metal to fully managed stacks.
Over the last twelve months there has been a marked increase in co-lo and DC migration providers actively promoting their services to enable moves to hybrid models at scale. In response, the hyperscalers are rolling out “sovereign cloud” offerings in an attempt to stem the repatriation of cloud services. There are no clear winners yet, but there is a definite shift towards greater control of costs, data and resilience.
Conclusion
The days of “cloud first” may well be coming to an end, with leaders demanding more control, resilience, and economic certainty. Sovereign data centres and hybrid models are a response to an evolving world where data compliance and risk matter. Being a master of your own destiny is appealing, and hybrid options are a serious consideration. CFOs want certainty of cost and CISOs want to know where their data is. Hyperscalers are quickly working to address these requirements with sovereign offerings of their own. Whether or not this will allay the concerns around unpredictable costs and resilience is to be seen. Public cloud isn’t going away in the near-term, but the “all-in” approach appears to be shifting – this might be the perfect time to refresh your strategy.