The digital transformation that took mainframe computing to distributed client-server models and then the Internet is forming a third wave, once again changing how organizations operate. In this third wave, or what IDC calls the ‘third platform’, the economies of mass digitization and ubiquitous mobile connectivity are enabling mass automation, new means of communication, advanced data analytics and unlimited computing or storage capabilities. This profound connection of people and things revolutionizes how we go about our daily business, fundamentally altering how enterprises operate.

The third platform

The third platform will drive enterprises to embrace a more distributed approach to data centers, one that is more suited to colocation of multiple users under large, remote facilities operated by third parties. Economies of scale allow colocation multi-tenant data centers (MTDCs) to offer facilities and communications services unattainable by most enterprises. For example, many of the critical communications involved in machine-to-machine communications and automated processes require very low latency. This argues for distributing virtual functions to the edge of the network and processing data locally.

Performance is important but economics is equally critical. Demand for MTDC services has resulted in increasing construction and commercial colocation capabilities in more and more geographical locations. Meanwhile, the availability of dark fiber continues to increase in many metro markets, driven both by demand for business connectivity and construction of advanced mobile operator networks. Over 50 percent of US office buildings are now fiber-lit. At the same time, the number of MTDCs has increased by nearly a factor of five since 2008.

Enterprises that embrace these trends are taking advantage of shifting business models. The ready availability of inexpensive connectivity and processing resources argues against keeping them in-house. Using external colocation data centers reduces CAPEX and enables organizations to move faster and more flexibly. In an environment of rapid innovation, speed and flexibility may be the critical points for many enterprises adopting a colocation approach.

Security has often been cited as a reason to keep data centers under direct enterprise control. Encryption, authentication and intrusion detection mechanisms continue to become more sophisticated. These tools can support enterprise use of secure facilities leased from an MTDC while keeping data access and integrity in-house.

Private or shared network?

Once an enterprise decides to locate some or all of its data center resources in an MTDC, it needs to figure out how best to connect the pieces. There are multiple ways of doing this, including lease of managed services on a carrier shared network or operation of a dedicated private network. The traditional model was to do the former. As more services were needed or a new site was turned-up, the carrier added capacity or planned the move. This is usually slow and costly; not favorable for an organization faced with rapid change. For these reasons, private optical networks are often a better choice.

There are many variables to consider, but increased availability of dark fiber and MTDC proximity mean that many enterprises are going the private network route.

Building an enterprise private optical network does not mean that its continued operation must be held in-house. Some will choose to let systems integrators construct and operate the network for them. Others will work with a traditional carrier to provide their dedicated private network. Still others will lease dark fiber and operate the network internally.

Fortunately, enterprise optical transport equipment for private networks is much simpler than what service providers use. Private optical equipment disaggregates functions, such as wavelength transponding or optical amplification, into discreet devices. With a modest capital investment, enterprises can purchase only what they need, making it easier to configure, deploy and operate, without giving up scalability or security.

The combination of increased dark fiber availability and MTDC proximity in most metro areas is making enterprise private optical networks more attractive. This is not a “one size fits all” scenario but many enterprises will get immense value from the agility, control and economy offered by a private network, helping them leverage digital transformation in their quest for organizational excellence.

Chris Janson is senior product manager for Optical Products at Nokia