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What is a Hyperscaler?
The COVID-19 pandemic accelerated digital transformation. Today, more businesses are turning to cloud-enabled solutions to serve their clients better, and hyperscalers are a compelling option.
Are you exploring cloud computing, colocation, or data center services for your business? Please continue reading to learn more about hyperscalers and why they are growing in the cloud space.
What is a Hyperscaler?
A hyperscaler is a technology services company that operates on an enormous scale. They provide cloud computing services, storage, and other IT infrastructure services. A hyperscale data center is defined as a data center with at least 5,000 servers and 10,000 square feet of colocation space.
“Hyperscale” refers to the ability to quickly and easily scale up or down the infrastructure to meet changing customer demands. Traffic on a network could increase or decrease suddenly. With hyperscale computing, companies can be ready to adapt to sudden significant changes in their computing needs. Global hyperscale capacity reached 13,177 megawatts of power capacity in 2022.
Hyperscalers can provide services at a lower cost than traditional data centers due to economies of scale. There are approximately 24 hyperscale providers. Some examples of hyperscalers include Amazon Web Services (AWS), Microsoft Azure, Meta, Apple, Google Cloud, IBM Cloud, Alibaba, Tencent, and Oracle Cloud. Raking in 56 percent of all the revenue between September 2021 and September 2022, Amazon, Google, and Microsoft dominate the market.
Hyperscalers have built massive data centers worldwide, with thousands or even tens of thousands of servers. They offer cloud-based services, including computing, storage, databases, analytics, machine learning, and AI. They serve many customers, including startups, small and medium-sized businesses, and large enterprises across various industries.
The hyperscale industry continues to grow because of several factors, such as higher data generation and demand for digitization. Allied Market Research predicts the market will grow from $59 billion to $585 billion in 2030.
How Do Hyperscalers Function?
Customers want speed and agility in an operational expense (OPEX) purchasing model. Hyperscalers meet this demand by allowing clients to scale on demand both vertically and horizontally and pay as they grow.
Vertical scaling involves adding hardware to improve performance. For example, you can add more memory and processing power to servers. The capacity of the hardware is the limiting factor in this scaling method.
Horizontal scaling involves adding more servers to a network to share the extra load. Horizontal scaling is only limited by the number of servers deployed in the data center. Hyperscalers are a perfect fit for customers needing horizontal scale.
With horizontal scaling, servers are all linked to a load balancer. A load balancer is a kind of gatekeeper or traffic cop. The device controls network traffic by transferring demands between servers. The load balancer sends users’ inputs to the server most suited to perform the function at the time. The load balancer ensures optimal server and network performance. Through IaaS, cloud hyperscalers use load balancing and horizontal scaling to provide scalable data storage services.
More than ever, businesses are moving towards cloud computing to help store their data and run day-to-day operations. According to Markets and Markets, the cloud computing market will grow to $1,240.9 billion by 2027 from $545.8 million in 2022.
However, there are many cloud solutions, and they all have their advantages. Common comparisons in cloud computing are hyperscale vs. cloud and hyperscale vs. colocation. We have provided a summary breakdown of both comparisons below.
Private Cloud vs. Hyperscale
The main difference between private cloud and hyperscale is the scale and ownership of the cloud infrastructure.
A private cloud is a cloud computing environment dedicated to a single organization. The organization’s IT department or a public cloud service provider builds and manages it. The infrastructure is not shared with other organizations. Private clouds provide many of the same benefits as public clouds, including scalability, flexibility, and cost savings, but with additional security and control over the infrastructure.
On the other hand, hyperscalers deliver a public cloud solution that many users share. The cloud infrastructure is built to scale rapidly and efficiently to meet the demands of many users and applications. A hyperscale cloud infrastructure is typically owned and operated by a large technology company, such as Amazon, Microsoft, or Google, and is designed to handle massive amounts of data and traffic from users globally.
A private cloud or a hyperscaler could be right for you. There are several factors you should consider when choosing between the two. Here are some of them:
A private cloud is a dedicated storage and computing environment. It can be implemented to meet your organization’s specific security and compliance needs. A private cloud solution might be better if you have particular needs that public cloud providers do not easily meet.
The public cloud is shared. Additionally, public cloud providers build their solutions to meet the needs of many customers rather than your specific needs. A public cloud solution may not perfectly fit your security requirements.
Additionally, while public cloud providers use best practices and have dedicated security engineers, they operate on a shared responsibility model. You are typically still required to secure your cloud workloads and connectivity. You are also responsible for backing up your data. This means there is almost an equal security burden between the public and private clouds.
With a private solution, you purchase your bandwidth. You can then use this bandwidth to your maximum contracted capacity at no additional charge. This allows you to have predictable costs for connectivity.
Bandwidth is typically a variable cost with a public cloud service. Most public cloud providers charge little or nothing to put data in the cloud (ingress). They usually make much of their money when you want to pull data down from the cloud (egress).
It is essential to understand your cloud services contract and your traffic patterns. Egress bandwidth charges are one of the biggest surprises our customers see with the public cloud and one of the reasons that the private cloud is sometimes a more cost-effective option.
Company Size and Resources
Smaller companies may find managing a private cloud service challenging because they need IT engineers to deploy and maintain a private cloud. A lack of on-staff IT resources may make a public cloud solution delivered by a hyperscaler a more attractive option. There are also fully managed private cloud options that you can consider.
When building a private cloud solution, it is crucial to have an understanding of your capacity requirements. If you under-provision, you may have performance issues or be hit with additional capital expenditures. If you over-provision, you have wasted money on resources you do not need.
A hyperscale cloud solution allows you to scale up and down seamlessly. Hyperscale is perfect for clients with unknown or spikey demand. Remember that spikes in cloud utilization also lead to an increase in cost, so it is important to tie the rise in cloud spend to an increase in revenue.
Hyperscale vs. Colocation
A colocation facility (or colo) is a data center where multiple customers store their storage, servers, and network infrastructure. The data center is purpose-built for technology infrastructure to ensure reliability and security. A colocation facility is a perfect location to store your private cloud infrastructure.
Hyperscalers also rely on data centers. They typically build an entire facility for their needs and own and operate it themselves. Rather than shared facilities, these are dedicated to the hyperscaler. A few of the largest hyperscale data centers include:
- Microsoft’s 700,000-square-foot, 198-megawatt campus in Chicago built from 40-foot shipping containers.
- Apple’s Maiden, North Carolina facility with 505,000 square feet of data center space and 20 megawatts of power capacity.
- Google’s Lenoir, North Carolina site with 500,000 square feet of data center space and 20 megawatts of power capacity.
For a more detailed comparison between colocation and cloud services, check out our article “Colocation or Cloud Services: Which is Right For You?”
Looking for a Cloud Solution that Suits Your Business? Brightlio Can Help!
Choosing a cloud solution can be complicated. Brightlio is here to help. We partner with a network of the world’s best public and private cloud providers to deliver the optimal solution for your needs and budget. We also have access to data centers across global markets for your colocation and hyperscale needs.
Additionally, Brightlio offers connectivity, UCaaS, and advisory solutions. We can help with virtually everything you need to digitize your business and are committed to being your most trusted and responsive IT solutions provider.
Contact Brightlio today for a consultation or a quote!
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