International Journal of Academic Research in Business and Social Sciences

Vol. 9 , No. 6, June, 2019, E-ISSN: 2 22 2 -6990 © 2019 HRMARS

Data Centre Colocation: Challenges and Opportunities in

Private, Public and Hybrid Cloud for Businesses
Nurul Fadhlin Mohd Nazim, Siti Noor Hidayah Senapi, Saiful Farik Mat Yatin,
Nurussobah Hussin, Nor Hasliza Ngah @ Muhammad, Norazam Abd Manan
To Link this Article: http://dx.doi.org/10.6007/IJARBSS/v9-i6/5977 DOI: 10.6007/IJARBSS/v9-i6/5977

Received: 11 April 2019, Revised: 15 May 2019, Accepted: 09 June 2019

Published Online: 29 June 2019

In-Text Citation: (Nazim et al., 2019)

To Cite this Article: Nazim, N. F. M., Senapi, S. N. H., Yatin, S. F. M., Hussin, N., Muhammad, N. H. N. @, & Manan,
N. A. (2019). Data Centre Colocation: Challenges and Opportunities in Private, Public and Hybrid Cloud for
Businesses. International Journal of Academic Research in Business and Social Sciences, 9(6), 624–639.

Copyright: © 2019 The Author(s)

Published by Human Resource Management Academic Research Society (www.hrmars.com)
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Data Centre Colocation: Challenges and

Opportunities in Private, Public and Hybrid
Cloud for Businesses

1
Nurul Fadhlin Mohd Nazim, 1Siti Noor Hidayah Senapi, 1,2Saiful
Farik Mat Yatin, 1Nurussobah Hussin, 1Nor Hasliza Ngah @
Muhammad, 1Norazam Abd Manan
1Faculty of Information Management, Universiti Teknologi MARA (UiTM) Selangor, Malaysia
2Members of Advanced Analytics Engineering Center (AAEC), UiTM

Email: [email protected]

Abstract: Data center colocation service offers businesses rental space infrastructure for
equipment rack, network servers, cooling, power, physical security and internet bandwidth; with
24/7 technical supervision for close to 100% uptime promise. Enterprise in-house data centres are
getting increasingly expensive to build and maintain. Many colocation providers also provide
managed hosting services and Business Process Outsourcing among other services. Data centre
operators face challenges from public cloud providers, and suggestions are being explored for
opportunities. This paper presents 3 cloud deployment models; namely private cloud, public cloud
and hybrid cloud. The three-layer model of cloud computing; namely Infrastructure as a Service
(IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS) is also introduced and briefly
discussed. Colocation players with a global footprint are seeing the benefits of offering business
platform which can adapt to customer demand and making the most out of the cloud deployment
a model.
Keywords: Data Centre, Colocation, Hybrid Cloud, Business Process Outsourcing, Disaster
Recovery

Introduction
Data centre colocation is a method through which an organisation can lease a sizeable office space,
network or Internet bandwidth and other resources within an active data centre instead of building
its own data centre. It facilitates the sharing of existing pool of data centre real estate to be used for
arrangement and hosting data centre services for external or retail customers/organisations. Data
centre colocation is primarily provided by data centre or IT service providers. Typically, data centre
colocation is arranged within a data centre colocation facility. Such a feature is useful to a data centre
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having ample, unused floor space available for rental. The owner of the data centre colocation facility
provides the floor space, cooling, power and physical security whereas the consumer brings in its own
servers, storage and/or applications. Data centre colocation primarily enables organisations to
arrange a data centre facility without the need to buy or manage it.
Frost and Sullivan (2017) mentions that data center colocation players in Asia Pacific include market
leaders such as NTT Communications (Japan), China Telecom (China), Singtel (Singapore), and Telstra
(Australia). Closer to the Malaysia market, companies such as AIMS, VADS, and Exabytes are pretty
much dominating vendors in this sector.

Challenges to Modern Colocation Business

Regardless of industry or business sector, CIOs and technology leaders face many challenges when it
comes to IT infrastructure management. They have to constantly develop suitable strategies and
implement appropriate solutions to overcome a myriad of company-wide demands.

Physical Space
The requirement for physical space is particularly important to corporations, especially to those
collecting significant amount of data. The scale of big data calls for exponential growth of storage
solution and queries. It is becoming increasingly challenging to fulfil this demand of physical space.

Power and Cooling Efficiency

The huge data centres operated by global corporations today utilise enormous amounts of power.
The need to invest in additional power solution is growing in importance to accommodate the
growing demands in data centre infrastructure. The requirement for more redundant power sources,
Uninterruptible Power Supplies (UPS) and backup generators is enigma to the business. And since
equipment in the data centre must be kept cool, provisioning adequate cooling facilities is also a
challenge in this business.

Reliability
In order to maintain the degree of reliability of the critical applications and services, the business
must deliver as close as 100% of uptime. However, in order to achieve that, building an in-house,
purpose-built data centre that has all the required infrastructure to afford such uptime, is getting
prohibitively expensive.

Scalability and Future Proofing

It is increasingly difficult for in-house data centre to allow for scalability and guarantee future-
proofing. When businesses grow, the data centre must be able to deal with varying volumes, need
for speed and multiplicities of big data requests. Future requirements need to be considered while
implementing any infrastructure.

Performance
In order to stay ahead in this relentless era, businesses want innovative and highly adaptive solutions.
The demands for high performance data centre is increasing, in-line with the increasing network
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bandwidth, volumes and server workload from year to year. Businesses need to empower their
employee in order to expect higher efficiency and productivity using the latest virtualization
technologies and installing higher-density racks,

Compliance and Security

Modern data center has to comply industry standard to stay on top of security, physically and
virtually. Data center facilities has to be constantly locked, guarded and monitored by surveillance
equipment. The organizations must follow the latest protocols and security techniques to ensure data
remains protected and its reliability is kept intact.

To Buy or to Build?
Colocation solutions does not only drive real business value and improve efficiency and productivity
within each business unit but also do so as cost-effectively as possible. When CIOs think to expand
their data center operation, more businesses are expressing a preference for third-party colocation
solutions instead of building their own data center. This one-sided decision is not surprising due to
the need to keep everything relatively low cost, agile, secure and dynamic.

A Shift to Colocation
Recent studies by various technology market research firms shows that respondents said they were
more likely to shift to a colocation solution as their business grows in the future. In the study,
respondents who are currently using both colocation and managed hosting are more likely to move
towards further colocation than managed hosting. Unsurprisingly, cost still remains an important
factor in any decision, higher than level of service or performance.

Quality of Product and Service More Important than Price

Quality of colocation services is gaining in importance when considering an external IT service. Cost
have less of an effect on the decision making when growth of business and quality of support
becomes more prevalent to the data centre needs offered to the organisation. It shows that the
future for colocation service industry remains positive.

Business Process Outsourcing (Bpo)

The broad definition of Business Process Outsourcing (BPO) is often described as a subsection
of outsourcing that entails the hiring out of the processes and functions of a certain professional
process to a third-party service provider. Kimmel (2015) says that BPO is generally classified
into back-office outsourcing (internal business functions such as finance and accounting or Human
resources), and front office outsourcing, (customer-related services such as contact centre services.

Business processes that are normally outsourced are information technology-based, referred to
as ITES-BPO, where ITES stands for Information Technology Enabled Service. Business process
outsourcing helps boosts the flexibility of a company in several aspects:
- it helps a company to be more adaptable in reacting to transformations
- the company can concentrate on its primary capabilities
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- increasing the pace of business activities

- keep growth while getting around bottlenecks

Following are the typical Business Process Outsourcing services that can be found in a collocated data
centre.

Contact Centre Services

Contact Centre Services for BPO is a typical service that unifies multi-channel customer information
within a common queue. This service enables customers to connect and participate via the channel
of their choice. Customer interactions are managed & optimized seamlessly throughout every stage
of consumer journey and touch points by our flexible Customer Service Solutions. Customer service
interactions via are managed by a sustainable, fully / partially outsourced model. The process can be
customized according to the client’s expectations, ensuring that they foster long-term relationships
with expertise in customer experience management.

Social Media Engagement

BPO Social Media services allows clients to engage and oversee interactions through various social
media platforms. Social Media Engagement among others assists in shrinking customer service
expenditure, soliciting feedback on products and services and enhancing public opinion of a product
or business offering

24/7 Technical Support

BPO Technical Support services normally delivers Level 1 and Level 2 Technical Support services 24
hours a day, 7 days a week. They offer quick deployment leveraging on organised operational
processes, technology and facilities, often by fully trained and experience professionals.

Consultancy and Training

BPO services also often offer Consultancy and Training services that can be done at the colocation
or at client’s premises. For example, Lean Six Sigma consultancy assists clients to reduce wastage due
to overproduction, underutilisation, defects and redundancies. This will eventually lead to cost
optimization, improved quality and value creation. By integrating the tools and processes for Lean Six
Sigma, a powerful engine is created to improve quality efficiency and speed in every aspect of
business.

Learning and Development Services

BPO services also deliver training programmes that can develop client’s contact centre staff’s skills.
The training may include customer management, coaching skills, certification programmes and other
training through structured learning and development initiatives. The specialized contact centre
training aim to help attendees to achieve their excellence in contact centre environment. In the
training, the objective is to assist the team achieve their individual goals, group goals, and ultimately
the company goals.

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Analytics Services
BPO Business Analytics & Insights services aid clients in predicting, managing and mitigating risk in a
customer-centric and cost-effective manner that will make the difference between success and
failure. Dashboard Reporting offers insights into the critical practices and technologies that are
transforming businesses into more informed decision making and better results. Social media
analytics facilitates the practice of gathering data and analysing those data to translate into business
decisions.

The Business Benefits of Colocation

More and more companies are moving their operations from in-house server rooms to colocation
facilities. This is due to the fact that colocation offers enterprises the ability to meet business
demands at a reduced expenditure. While there were factors supporting the original benefit of
running their own server rooms, many are finding the advantages of a colocation solution, especially
the savings and higher resilience of a collocated data center. Colocation not only enhance overall IT
service levels, but also reduces the expenditure and intricacies of IT management. Colocation
providers can be trusted to build, manage and support data centers with accompanying IT
infrastructure that many businesses may not be able to groom in-house. This facilitate the
organizations to maximize their full potential, across the board, within each business unit.

Secure, Fast, Global Network Connectivity

By creating network infrastructure internally is often involve high cost. Colocation data centers are
certainly connected to multiple providers and utilize extremely large bandwidth pipes so that global
connectivity is achieved quickly, securely and cost-effectively. It also can reduce the businesses cost
to get the better solution.

Access to Technical Expertise and Support

In-house Network Operations Centre (NOC) with help of remote hands service 24/7/365, allows IT
administrators to call for assistance from experts in the data centre. It provides the peace of mind,
and also serve to help IT departments realize and considerable savings in budget, time and resources.
With this service internal members of staff don’t have to physically visit the data centre to take the
appropriate action. The colocation provider’s will closely monitor and control all network activity to
afford absolute availability.

All Security Provisioning Satisfied

Colocation providers always boast an extensive range of security measures to prevent unauthorized
access on a physical level with cabinet locks and constant surveillance by CCTV cameras. This security
solution that is most likely better than what could be achieved with an in-house server room. The
buildings are built to withstand fires and feature secondary security features designed to prohibit
unauthorized access to the data centre.

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Better Disaster Recovery and Business Continuity

Every business needs to have an effective disaster recovery (DR) plan to protect against unforeseen
events that can cripple the IT infrastructure which modern businesses rely on. The critical mission is
to safe the hardware from the effects of natural and human-made disasters is crucial. The whole
point of a disaster recovery plan is returning business operations to normal after a disaster.
Colocation facilities provide better business continuity and disaster recovery services to businesses

Cooling and Power Redundancy

The goal of any efficient data center is to meet the cooling needs of the computing equipment and
facility, by maintaining a constant temperature and ensuring that humidity levels are regulated.
Accordance with ASHRAE guidelines, the suitable HVAC systems is used to maintaining an
environment. Colocation facilities, boast more power-per-square foot ratios than private data
centers. Colocation provider not only utilize uninterruptible power supplies and back them up with
diesel-powered generators, to creates total redundancy and allows an organization to benefit from
100% powered uptime.

Reliability and Uptime

Colocation facilities consent businesses to realize increased uptime and total network reliability.
redundant power solutions and constant on-site monitoring is costly to maintain in house. Businesses
can have their network switched over redundancy internet connection. Reliability and uptime keep
an organization on the cutting edge of innovation and competitiveness.

Scalability and Room for Growth

Colocation providers built their facilities to accommodate their customers as their businesses grow.
IT infrastructure expansion is a continuous process, so that the decisions need to be made with future
planning firmly in mind. That not only physical space but also network bandwidth requirements. The
capability to add or remove bandwidth in-house is difficult to achieve and takes time but in colocation
solutions the facilitate bandwidth changes in hours by paying for the service is another significant
benefit of utilizing a colocation solution.

Quickly Become Compliant

The certifications enable data centres to keep up with the quick and ever-changing trends in
technology. As new or innovative technology enters the market, new legislation, codes of conduct,
and more competition urges data centre owners and operators to make sure they have data centres
that is in compliance. Colocation providers must renew these certifications annually to remain
complaint and ensure their internal controls remain at the highest levels of regulatory standards

Closer to Markets
To optimize networking capabilities and data storage solutions, customers or target prospects will
choose a colocation facility that is located close to their organisation. While physical distance does
not have the latency effects, by staying closer to the customer its will reduce network costs and
complexity of data transfer across boundaries.
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Reduced Costs Overall

By reducing infrastructure deployment, management and maintenance costs that the biggest
contributing factor to this is the economies of scale that a business can leverage by using a colocation
facility. The overall cost saving can be channel e elsewhere to complement core business activities.
It’s because of colocation service already provided full power redundancy and adequate cooling that
is highly cost to the business. The business only pays for the services they use means there is no
money wasted on unnecessary products and services.

Buying Criteria and Vetting Process

The decision in choosing a colocation provider, the organization need to conduct a diligence and
compiling a definitive list of buying criteria beforehand it is very importance. To ensure that
organization get the colocation solution that is right for their business, deciding exactly what is the
top-level business goals for a colocation strategy are very important before having a conversation or
discussion with the provider.

Geography/Proximity
Data centres might be local, but applications are inherently global. Some of the customer choose to
have the colocation facilities close to their business. Furthermore, locating colocation infrastructure
closer to the customers allows you to scale your IT objectives to departmental business goals more
easily in the future. For disaster recovery and business continuity purposes, a colocation facility
further away from the organisation’s headquarters is often a sensible option. No matter how, many
organisations often choose a colocation facility that is close by.

Regulatory/Governance Requirements
The governance legal and regulatory compliance challenges have become a universal issue.
Businesses need to understand any regulatory considerations associated with a data centre located
in a specific geographic region. Business have to do some research in term in terms of the political
stability of in a specific geographic region when choosing a colocation facility.

Audits
There are a number of data centre certification standards and best practices that colocation
customers should understand in order to ensure the ideal performance of their data centre
facility. Colocation facility provider be able to display that it is in adherence to these industry-wide
certifications, SSAE 16, CSAE 3416, and ISAE 3402 standards as a minimum. Colocation facility
provider must have independent annual audits to ensure ongoing compliance.

Technical Support
Technical support requires dedicated and experienced team who will work round the clock to deliver
higher value to customers which require resources and expertise to maintain in-house. Some
colocation providers offer remote hands, which can be used when there is a requirement to quickly
reboot a server, to implement a migration plan or to handle queries and its supported by a qualified
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team. Remote hands remove the necessity to travel to the colocation facility, that shall save time and
money.

Security
Colocation facility, security system with 24/7 monitoring and anti-passback that has been installed in
the data centre that affords a certain level of contentment. The building also boasts a constant
security presence and utilises video surveillance with monitor the 360-degree data centre
environment. Colocation facility has been equipped with fire safety and protection systems in place
to prevent any equipment being damaged either as the result of an accident or a malicious.

Power Density Capabilities

Power system in data center facilities has become a critical requirement. The power consumption
has risen and will increase from time to time. A high power density will greatly complement your
organization’s expanding needs and ensure that your infrastructure gets the right amount of power
to perform at an optimum level. Colocation facility must have backup. Diesel-powered generators
may seem superfluous, but your entire IT stack could end up depending on them if the worst came
to the worst.

Service Level Agreements

Colocation providers have to support their service claims in an official Service Level Agreement (SLA)
document. Furthermore, it’s not just a 100% network uptime SLA, but also a 100% power SLA that
provides businesses with the greatest solution. Identify exactly what the provider says they are
responsible for, in terms of infrastructure and their associated response times for any failures.

Connectivity
Organisations want to benefit from superior network speed, resiliency and connectivity, at the best
possible price. The diversity of a facility could impact the cost passed onto its customers and so
understanding the full connectivity setup and associated costs beforehand is a must.

Interconnectivity
The capability to connect to different types of environments and other facilities from their colocation
site is importance to the business. A colocation provider that allows secure, efficient and affordable
interconnectivity via managed ‘meet-me-rooms’ or other solutions, could allow organizational
business to realize more benefits overall.

Amenities
Data centre colocation providers often differentiate themselves by offering value-added services. The
best solutions provide several on-site amenities. It is important to assess the amenities available and
understand how they can be used by organizational members of staff. These amenities include offices
and work stations, conference rooms and access to phones, copy machines, and fax machines.

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Data Centre Services Market Forecast

Frost and Sullivan (2017) estimates the Asia-Pacific data center services market to grow at a
compound annual growth rate (CAGR) of 14.7% from 2015-2022 to reach USD$31.95 billion at the
end of 2022.

The main focus driving growth across Asia-Pacific is the explosive digital needs of emerging
economies with huge populations. Enterprises are encouraged to look into adopting third-party data
centre services, brought about by increasing complexities within the IT infrastructure due to
virtualization and consolidation, coupled with various cost constraints. This fact is stimulating the
strong growth of managed hosting, especially across emerging economies. Colocation services
continue to dominate data centre services revenue currently, even when there is a bigger adoption
of managed hosting services. These are clients who require stringent data confidentiality and
comprehensive management control of their operations; especially large enterprises and highly
regulated vertical markets, e.g. Banking, Financial Services, and Insurance (BFSI). Furthermore, cloud
service providers are also creating new demand for colocation as they opt for third-party facilities to
host their infrastructure for providing services to customers.
However, some enterprises have chosen to bypass management of their IT operations straight to
cloud services such as Infrastructure-as-a-Service (IaaS). This causes an adverse outcome to the
outsourced hosting market, which resulting in many service providers expanding their data centre
service offerings to include cloud-based offerings as well.

The Asia-Pacific data centre services scene is dominated by telecommunications companies/carriers

such as NTT Communications (Japan), China Telecom (China), Singtel (Singapore), and Telstra
(Australia). They own the core network infrastructure, which lets them to have full control over their
services – from an IT service delivery as well as from a connectivity viewpoint. This enables them to
benefit from the capacity to offer an end-to-end proposition to clients comprising data centre
services, connectivity, cloud offerings, and value-added services such as managed security and
disaster recovery, among others. The data centre landscape is also highly fragmented in some
countries, as increasing data sovereignty concerns have given rise to dominating vendors. These
vendors include Telkomsigma (Indonesia), AIMS (Malaysia), VADS (Malaysia), and Telin (Indonesia).

Challenges to Colocation Providers from Public Cloud

Enterprises are seen moving from in-house data centers to outsourced data centers in order to save
costs and consolidate their IT operations. In the immediate future, large data-centre providers will
benefit from demand for co-location space from public-cloud providers. However, it can be seen that
data-centre supply is exceeding demand in mature markets like Hong Kong, Singapore and Malaysia.
Smaller retail co-location players may find this a battle in the wake of oversupply. Rising public-cloud
adoption in these markets may favour large co-location players with direct connectivity to multiple
cloud providers. Enterprises want private connections to public cloud for security, performance, and
cost reasons. Large co-location providers have the ability to connect enterprises to multiple cloud
providers on-demand and simultaneously. A single cloud provider will not be able to provide all the
necessary services.
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Telco based co-location and private-cloud businesses in the US are reported to be exploring leaving
the data-centre business entirely. There are three key concerns for Telcos:

1. Operating a co-location business regularly conflicts with their private-cloud business. Many co-
location clients prefer access to the public-cloud services while the operator continue to push
their own private-cloud services.
2. Operating a data-centre business is costly and Telcos are often committed to paying out high
dividends to their shareholders. Selling off the data-centre business may assist maintain some
needed cashflow. Funds freed from data centre operations can diverted to enable cloud services
or be invested in high-growth areas such as Big Data analytics.
3. Large businesses prefer to use a single data centre provider globally and many telcos are lacking
this factor due to their limited geographical presence.

Three Cloud Deployment Models

Equinix Inc. (2016) define are 3 basic definitions of deployment models for cloud computing:
 Public cloud – IT capacity provided in a multi-tenant platform by a service provider and consumed
as a service
 Private cloud – IT capacity operating on owned, dedicated systems (either enterprise or
collocated) and accessible via a cloud interface
 Hybrid cloud – a blend of public and private clouds, with the platform to move workloads from
one type of cloud to the other

Characteristics of Public Cloud

The attractiveness of on-demand capacity consumption is obvious. Application developers can
change to a just-in-time consumption model instead of capital-intensive infrastructure that takes long
lead times for planning and construction. However, this route present itself with several challenges:
• Long-term Expenditure – Total reliance on of public cloud can be very costly.
• Restricted Flexibility – Public cloud players tend to offer pre-defined virtual machine sizes and
service offerings that may not perfectly meets your actual needs.
• Opaque Technology – Generally public cloud players do not impart the details of the underlying
technology they utilise, which can cause alarm to both developers and auditors.
• Shared Security – In essence, multi-tenant environs pose bigger conceivable risk than private
deployments.

Characteristics of Private Clouds

Similar to public cloud, collocated private cloud computing presents simplified consumption and
better flexibility compared to in-premise pure hardware-based deployment. However, it runs on
dedicated systems that are owned and managed by a single corporation. Private clouds operate a
cloud software stack that encapsulates the hardware into pools of virtual resources. The benefits of
private cloud include:

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• Financial Savings – As previously mentioned, public cloud can be very costly for long-term steady-
state workloads. When capacity needs are well recognized, it is more cost-effective to run at least
the base load portion in a private cloud.
• Increased Flexibility – Owners of a private cloud environs are free to plan virtual systems in any
way they desire.
• Technology Clarity – A private cloud owner has complete control and clear knowledge of
component hardware and software.
• Better Security – Simply, private clouds are single-owner environments.

Hybrid Cloud — The Combination of Public and Private Cloud

The blended use of both public and private clouds is often labelled as “hybrid cloud.” There is no
common characterization of hybrid cloud computing, because every environment is distinctive. For
different organisations, it may involve operating certain workloads in a dedicated, private cloud and
other operations in a public cloud. Some companies may use Cloud Bursting approach, using their
private cloud to supply cost-effective base capabilities and bursting into the public cloud for high load
or unusual demand conditions. Amongst others, companies may deploy a layered cloud design,
operating some portions of a single application stack on physical hardware and others in the public
cloud. The ultimate aims of hybrid cloud are to balance control, cost and performance for effective
service, whichever approach is chosen.

The Need for Remote-Based Computing Services

With the advancement of technology and businesses expanding every and each year, owning a
private data centre becoming harder to address. These factors have led to the increase of technology
cost, staff and process overheads.

To add to the situation, the uncertainties of current economic situation also change business model
and how IT technical support units cope with the transformations. IT department is inherently under
pressure to create and develop standardised processes, reduce costs and flexibility, all whilst
increasing service levels. These factors influence company transformation and the approach IT
infrastructure is operated, consumed and built. IT managers are now looking to build SPI (SaaS, PaaS,
IaaS) delivery models and adopt the hybrid cloud computing. The SPI model helps IT departments
bring the scalability and flexibility to their business needs.

More companies nowadays are eager to introduce remote services as a part of their offering because
it’s been proven to be effective and less cost involvement. For starters, cloud-based remote services
make the company more appealing to a wider pool of talented people.

Cloud Computing Model for Enhanced Productivity

Using the cloud for productivity gives the company the full control over what they want their people
to work on and view. Segmenting it into dedicated teams that work together will reduce unnecessary
tasking and channel noise while increasing the work output. Cloud computing offer the end user the
infrastructure, applications and services to be consumed and charged them at somewhat reasonable
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and affordable price with the complete cloud service management without any need for the users to
manage the cloud themselves.

Infrastructure-as- a-Service (IaaS)

By setting the technology base on infrastructure as a service is an advantage for the company. Some
mid-sized companies are trying to compete with larger company on customer service but still unable
to afford the necessary on-site IT infrastructure (Claranet white paper, 2016). Infrastructures as a
Service (IaaS) are also known as Cloud infrastructure services. IaaS is fully self-service for accessing
and monitoring storage, server, networking resource and other service. (Stephen Watts, 2017). It also
allows user to purchase resource on demand as needed instead of to buy the hardware outright. IaaS
used Virtual Machines (VMs) to house data instead of physical servers

Platform-as-a-Service (PaaS)
Platform as a Service (PaaS), they can develop they own application using programming language,
makes the development, testing, and deployment of applications simple, cost-effective and quick.
With this technology, the third-party provider, can manage servers, storage, networking and the PaaS
software itself. Developers, however, only manage the applications (Fujitsu ,2011). PaaS platform did
not authorize user to control or manage the servers, operating system, storage space and other
component, its limit only adjustment related to software transfer and configuration setting.

Software-as-a-Service (SaaS)
Software as a Service (SaaS) represent the largest cloud in the market and its growing rapidly. The
advantage of the SaaS, is that the user doesn’t have to purchase the hardware and also, they don’t
have to invest in high viability or security solutions. All infrastructure and performance requirements
that related with the cloud infrastructure provider, whose business and core expertise are the
delivery of software services are defined in the service level agreement or SLA (Fujitsu, 2011). The
third-party vendor used the web to deliver the application to the clients and the client can accessed
the web browser without any installations required, although some of it require plugins.

Growth of Cloud Computing Services

As time goes by and with the growth in cloud computing, infrastructure service eventually will
become software services. Then the boundary between software, infrastructure and platform does
not matter to the customer anymore as it is only a service. Cloud computing will dominate the
modern market by providing the disparate approaches and company can access the infrastructure
and resource on demand as a service. Its allow user to focus on their core business without hassle
rather than manage the infrastructure.

By empowering and speed up the processing power, memory networking, security and storage, more
third-party company will look for the solution in cloud computing with trust. Cloud computing
simplified IT management and IT infrastructure, remote access affectively anywhere with the cost
efficiency that cloud computing brings about.

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Companies now start to realize the benefit of the cloud computing and investment. We predict that
in the next few years, there shall be an increase in adoption of cloud computing services years when
the majority of large and medium scaled organization implement the cloud computing strategies
within their business.

Security issues have quickly risen to become major concerns for many companies. 50% of small and
midsized organizations reported suffering at least one cyber-attack in the last 12 months (Continuity
Centres, 2018)

The trend now is to reduce the hardware on premise but there are some users who believe they need
some of infrastructure in their current environment, mainly to control the implementation, data and
security.

Somehow User still need the effective solution form of prevention and encryption, by putting the
data in the cloud user is in the right direction. The data is store on the specially designed facility with
a protection by the latest firewall and anti-malware and cloud provider guarantees security of your
data. With all these features data become harder for hacker to break it. The necessity to secure the
data is still in user hand, they have to secure their own network and other device while connect to
the data.

Outlook into Interconnected Business Ecosystem

In the colocation data center, the interconnection of multiple clouds, service providers, customers
and/or network service providers presents an opportunity for easier integration of services and
business processes. Taken as such, interconnection can be a key element of enterprise IT strategy,
yet the options and approaches are not always clearly understood.

Enterprises of all kinds continue to move toward consumption of IT in an on-demand model, whether
from public or private cloud, or a combination of both. The network is a critical element of this
computing paradigm in terms of performance, availability and security. Trends in the adoption of
cloud computing and the types of applications being moved to the cloud are already having an impact
on network performance; the current surge of interest in microservices and container technology will
only serve to increase network traffic further.

There is an evolving set of solutions for network connectivity into and within the data center
environment that can help address these networking issues. Some enterprises, for instance, are in
the early stages of using cloud-exchange services or a direct-connect service to move their data to
and from cloud providers without going over the public internet. However, many enterprises do not
yet understand how to adapt their network architectures to the hybrid cloud era.

The data center will be the place where the physical meets the virtual, where clouds and customers
connect via networks. We believe interconnection, peering, and 'cloud' networking strategies in the
data center will become integral to the overall enterprise IT architecture. As applications – or whole
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business functions – are migrated to cloud, enterprises will use multiple cloud services and
environments, often in 'hybrid cloud' configurations, where multiple clouds are integrated to deliver
a single application or user experience.

The value of an interconnection ‘ecosystem’ is growing and is already very large for companies in
particular sectors, e.g., where groups of companies need to share large data sets (oil and gas, movie
production, pharmaceuticals and genomics), or need to trade information (financial services trading
ecosystems). As more firms start to compute and share large data sets, demand for these communal
meeting points (data centers) will continue to grow.

Conclusion
Hybrid cloud is seeing growth better than public clouds. Several businesses that have current private-
cloud infrastructure have been using public cloud for newer applications and projects. These
companies enjoy the cost savings and flexibility of public-cloud services, nevertheless they continue
to keep their most sensitive operations on their private-cloud platforms. The shift is a progression,
with private cloud platforms continuing to be strategic components of enterprise IT systems due to
various reasons including regulatory issue and autonomy.

Private-cloud providers are adopting third-party cloud management services in preparation for
hybrid cloud. In the face of slower growth in private cloud, cloud-service players are now seeking to
benefit from the growth in managed third-party cloud services. Clients who now is already
subscribing to private-cloud services from these providers shall be able to buy public-cloud services
by simply expanding their remaining service agreements.

Global retail co-location providers offer cloud players with a global footprint to expand their ventures
and effortless approach to many enterprises that co-locate on these data centers. Many global
companies would rather to use a single global co-location provider to serve different regions. Global
co-location providers are gaining from this virtuous loop through which cloud players and enterprise
players can work together on a single platform.

Hybrid clouds do however, create a number of challenges for enterprises. The private cloud needs to
network and move data within multiple public clouds systems. These transmissions must be secure
and encrypted. The companies need to put in place policies to control sensitive pieces of data that
should not be transferred from private clouds. Likewise, matters such as data integrity and access
rights for data must be monitored. In addition, costs relating to operating hybrid clouds will become
more complex, with a mix of public cloud and private utilization.

Acknowledgement
This paper was partially funded by:
1. Conference Support Fund, Institute of Graduate Studies (IPSis, UiTM)
2. Management Fund, Faculty of Information Management, UiTM

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Corresponding Author: Saiful Farik Mat Yatin. Faculty of Information Management, Universiti
Teknologi MARA (UiTM) Selangor, Malaysia

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