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Microsoft Corp.’s opening of two data centres in Canada are expected to fuel an uptick in adoption of its cloud services, such as Office 365 and Azure, in part because it addresses the erstwhile concern many enterprises have: data residency.

But there are other benefits for its customers, as well as its partners, and reflects broader trends in the data centre landscape.

DMTI Spatial provides high-precision location intelligence to sectors such as insurance, mortgage, the government and others. Vice president and general manager Paul Franc said the company is moving to a pure cloud model for delivering its applications and has chosen Microsoft’s cloud as the platform on which to develop. The company has been “pleasantly surprised” by how accommodating Microsoft has been its support of research and development, he said, as well as building best practices as it grows in Canada.

Franc said Microsoft’s presence just expands the market for DMTI Spatial to provide cloud enabled applications and services. “It’s easier for us to sell, because of the credibility Azure brings to the table.” Another benefit of being closer to customers is performance and speeds, he said. With bigger data sets, it allows the company get to customer desktops faster. “End users are measuring performance in sub-seconds.”

It’s significant that Microsoft has set up not just one, but two data centres in Canada, Franc added. “The problem is when you have single location, where do you back up?” DMTI Spatial can replicate data in two data centres and have both in Canada. In addition, the “sensitive” industry verticals it’s targeting – insurance, financial, banking, telecom and government – are also embracing Azure, which supports rapid application deployment.

Rob Daleman, vice president of corporate marketing for DMTI Spatial, said it already had Canadian customers who are comfortable with their data being outside the country’s borders, and as a recent Intel Security survey found, the cloud is becoming a pervasive delivery model in the government and private sector, Microsoft’s physical presence supports its product strategy.

Being able to leverage the cloud has helped advance GIS tools a great deal in the past three or four years, said Daleman, and being able to offer the option of keeping customer data in Canada helps to allay fears around cloud and raises the level of trust. He noted that only 13 per cent of enterprises trust the public cloud, according to Intel Security.

Mark Schrutt, research vice president for services and enterprise applications at IDC Canada, said Microsoft’s Canadian data centres gives enterprises more choice and the confidence their data remains in in the country. “You’ll see more partners who had not got their feet wet around Azure become more interested in what Azure offers.”

The data centre market is more than cloud computing, Schrutt said, and the U.S. players such as Microsoft and Amazon setting up shop in Canada are not providing services such as colocation. He said the impact of Microsoft’s new facilities will be on their own customers looking to do more with Azure, but overall it’s hard to break out what it means for the overall data centre market.

One trend that is certain, said Schrutt, is that corporate data centres getting older and more costly to manage due to complexity, so CIOs are looking to get out the data centre business. In Canada, there are about 200 commercial data centres supporting a broad range of infrastructure. While there will also be new data centres being built in corporate Canada, he expects that number to go down while the number of commercial data centres grown. “There’s just much more data. IoT is creating more data.”

Microsoft’s entry to the Canadian market, as well as Amazon’s and IBM’s, is helping to get more awareness for cloud services. “The big boys are coming to town,” he said. “That is driving mindshare in the C-suite.”

For CentriLogic, it’s time to grow. Following its acquisition of Advanced Knowledge Networks in November, it just announced further expansion in the Western Canadian market with the leasing of a new facility in Vancouver, extending its footprint beyond Ontario, where the firm currently owns and operates four data centres throughout the Greater Toronto Area.

While data residency is often a requirement for the company’s customers due to regulations, said President end CEO Robert Offley, for some it’s more about perception of keeping data in Canada. The new facility was driven by customer demand in part because CentriLogic customers were seeking geography diversity to support disaster recovery-as-a-service (DRaaS). “This isn’t ‘build it and they will come’.”

In addition, Offley said, British Columbia is one of the only provinces where if you’re doing government work you have to host within the province.

One of the realities CentriLogic is dealing with, he said, is that the infrastructure layer is becoming more of a commodity. “Infrastructure will just become a delivery mechanism over time.” It is looking to move up the stack, he said, offering more managed services and outsourcing than just pure colocation. This includes getting involved with ecommerce and application hosting, including the Azure platform within their faculties.

Offley said there is a lot of opportunities and customers are looking for more than one answer to solve their business challenges, whether it’s colocation or public cloud. “Amazon isn’t going to solve everything.”



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