Hostway Services’ Emil Sayegh: How are Cloud Providers Playing with Traditional Data Centers?

DALLAS, TX – Hybrid IT is all the rage. But it’s far from a homogeneous trend. That’s why panels about enterprise end-users are a staple at CapRE’s Data Center Summits. And these discussions are never quite the same as before, since this topic is so dynamic. CapRE’s Dallas Data Center Summit in August was no different, and that’s why we invited Emil Sayegh, CEO of Hostway Services, Inc to present an opening keynote presentation, titled The Future of Data Centers: How the Cloud Providers are Playing with Traditional Data Centers.

“We’re going to talk about how Cloud providers are coexisting with colo providers, with data centers and all the rest of the players and where our world is going,” began Sayegh. “I’ve been doing this for a long time. I started in the Cloud business at RackSpace. So I’ve seen it from all angles over the last 12 years. Let’s talk about the use case. I’m here to talk about end users, use cases, and how those are evolving and how they are enabling these different scenarios, whether it’s dedicated services or colo and how that plays with data centers.”

data center summitSayegh then rewound the clock a bit. “So in 2007-2008, this was the standard architecture for applications,” he recalled. “You had a bunch of servers behind a firewall and it was called a classic two-tiered architecture. And usually those things were in a single data center. People would start out their applications on an architecture like that. If there was very quickly some growth and more traffic going to their website, what do you do? You add more servers. That was standard, in two weeks you can get more servers up. This was before all the craziness of social media and where applications would go viral and grow very quickly.”

“Then things started to spike up. These applications started to see instant workloads,” continued Sayegh. “And again, what people did in that era was add more hardware, add more storage, add more compute, add more databases, and maybe spread them out in other data centers. you could get redundancy and a global footprint, and you could access your data from different areas of the globe. The traffic would keep going up and then all of a sudden you end up with a mess because you haven’t architected it very well. Then you start having supply chain issues and one data center you might have a mismatch of hardware, with different versions of hardware, and then you end up with a mess.”

Sayegh then fast-forwarded to the present. “Now the pundits nowadays will tell you that the answer to all of this is the Cloud. Go to the Cloud, put it all in the Cloud, it will scale in the Cloud. Right?” he asked the room, rhetorically. “Every one of those applications will work just fine, just like you would call an Uber that will meet you here in ten minutes. All of this will work fine in the Cloud.”


According to Sayegh, however, the problem is that IT is not a single application. “There are databases, there are CRMs, there are websites, blogs, there is streaming video, crypto, and every one of those applications is very different than the prototypical example of the application we just talked about, which works great in the Cloud and just scales, and if it becomes popular I will do it instantly,” he explained.

Furthermore, regulatory compliance is another layer to keep in mind. “Guess what, each one of those applications can have hundreds of requirements – from HIPAA in healthcare to PCI in fintech to FISMA in government to GDPR,” he mused. “GDPR just came up…we have regulations coming right, left, and center.”

Added Sayegh, “They’re making things super hard for people developing applications and people trying to run applications because they have to jump through all of these hoops and be cost effective and get to market quickly and so and so forth.”

“Undoubtedly, all of us are in this room because of this trend – companies that used to own all of their assets and now outsourcing them. Moving from a CapEx model to more of an OpEx model. Instead of running their own data centers internally, they are going to a colocation provider. A hosting provider. A Cloud provider,” Sayegh shared, about to conclude the introduction of his remarks. “The trend is undoubtedly going this way. Where you’re paying on a monthly basis, or some regular basis, for those assets…”

Stay tuned to previous CapRE Insider Reports for more remarks by Sayegh.