Evoque Takes Hybrid-First Approach to the Colocation Business

If you were launching a colocation company today, what would your business model look like? In particular, how would you build a data center business that helps you compete against public cloud vendors who want your customers to move wholesale to the public cloud?

Those are questions that Evoque, a mid-size data center provider that entered the market in 2018, is answering by building a colocation business strategy that centers in large part on optimizing for hybrid cloud use cases. Here’s a look at Evoque’s plans and what they say about the intersection between hybrid cloud and colocation in general.

Breathing New Life into AT&T Data Centers

As data center companies go, Evoque’s story is a bit unusual. The company entered the market in December 2018, when it purchased a collection of data centers that had previously belonged to AT&T. The 1,100 or so customers who had been using those data centers at the time of the purchase became Evoque customers as part of the deal.

Today, Evoque operates 31 colocation data centers spread across four continents. Its customers span a range of industries and verticals, although “our sweet spot is in mid-market retail,” according to Donna Henderson, the company’s CMO.

Colocation for the Cloud Age

Evoque’s history sets it apart from most other colocation providers, who began operations long before data center providers faced so much competition from public cloud vendors. It has enjoyed the luxury of being able to invent a business strategy from scratch that positions it for success in the age of the cloud.

Related:Why Hybrid Cloud Is Central to the Colocation Industry’s Future

In building that strategy, Evoque has sought to differentiate itself from the rest of the colo market, as well as public cloud companies, in a couple of key ways.

For one, it wants to position itself as a provider not just of data center space, but of managed services as well. "We've changed our position from being a colo provider to being a solutions provider,” said Steve Friedberg, director of competitive intelligence at Evoque.

That’s not a totally new idea of course. Big colocation providers like Rackspace have also invested heavily in coupling managed services with data center real estate. But if nothing else, Evoque’s position in this regard suggests that services will be key to colocation providers’ success in the future, especially if they want to court customers looking for the same seamless experience that they can get from managed services in the public cloud.

Helping customers plan their data center architectures and optimize their total infrastructure spend is another pillar of Evoque’s strategy. Henderson said the company works with a cloud consulting firm to balance customers’ hybrid workloads. It is also working closely with a cloud cost optimization partner to build out services that will allow Evoque customers to plan the most cost-effective hybrid cloud architectures.

Related:What Colocation Users Should Know About AWS’s and Its Rivals’ Hybrid Cloud Solutions

It’s easy to see how a service like this would give a colo company a leg up over public clouds. Public cloud vendors have made it easy to build hybrid clouds using platforms like AWS Outposts and Azure Stack, but they haven’t made it cheap. By helping customers figure out how to leverage colocation data centers in ways that lower their total costs while still taking advantage of public clouds where it makes sense, Evoque puts itself in a position to highlight the financial benefits of pairing colocation with the public cloud.

For now, Henderson said, the cost-optimization service remains in development, but Evoque expects to have more concrete plans by the end of the quarter.

A Hybrid-First Approach to Colocation

All in all, Evoque appears to be building a colocation business strategy that assumes customers want hybrid clouds first and foremost. In doing so, it’s avoiding a head-on all-or-nothing battle with public cloud vendors for customers’ workloads.

“We know the world's moving to cloud, and hybrid cloud in particular,” Henderson said. “We want to have all the puzzle pieces in place so a customer can do either on-prem, colo, or colo-and-cloud solutions."
Established colocation vendors like Equinix have spent hundreds of millions of dollars to get to that place. Evoque is in an enviable position in that it gets to build a hybrid-friendly offering out of the gate. The only question that remains to be answered is just how important integrated cloud management and planning services will be in building a colocation offering that is optimized for hybrid cloud use cases.