Hyperscalers: How Do They Operate and What Benefits Do They Offer?

Technologies such as cloud computing, edge computing, the Internet of Things (IoT), and artificial intelligence (AI) have ushered in the era of hyperscalers. You’ve probably heard the term in the tech space quite often, especially when people refer to Big Tech. That’s because hyperscalers provide the bulk of the cloud computing services in the world. 

Before such companies took over the majority of market share, enterprises often had on-premise data centers to support their operations and applications. However, with cloud migration, on-premise infrastructure has reduced significantly. More and more enterprises today from various industries are choosing hyperscalers to support their business. 

This article explains how hyperscalers work, their benefits, and if it’s still worth having a data center on your premises. 

What Are Hyperscalers? 

The term hyperscaler is derived from hyperscale computing, where data processing can be scaled quickly and easily to meet the increase in demand. 

A hyperscaler is a large company that provides cloud, networking, and storage services at scale. These providers typically have large data centers worldwide, equipped with thousands of servers and other critical equipment, to cater to the infrastructure needs of other enterprises (infrastructure as a service or IaaS). 

Although no global standard defines a hyperscaler, the consensus is that large companies, such as Google, Amazon, Microsoft, Meta, and IBM, fit the category. These giant corporations have built massive data center facilities throughout various regions to cater to their operations and offer infrastructure to other companies.

How Does It Work?

As enterprise applications require flexibility in terms of infrastructure for computing and storage, the large data centers paired with cloud computing can provide large amounts of resources. These data centers run tens of thousands of virtual machines over thousands of physical servers, efficiently allocating resources as needed. 

Hyperscalers today have leveraged white box equipment and virtualization to make the most of the infrastructure they hold. As a result, they can offer a wide range of IaaS offerings for medium to large enterprises. From public departments to financial institutes, many big corporations today rely on the infrastructure provided by hyperscalers. 

Hyperscalers offer both public and private cloud platforms. However, the majority of their clients use the former. 

Furthermore, these companies have placed large facilities in almost every major region, distributing infrastructure services geographically. This allows them to offer easy scaling and the choice of location so that enterprises can base their applications as near as possible. 

Why Choose a Hyperscaler? 

There are over 12 large hyperscalers globally, mostly from the US. Enterprises choose hyperscalers because of the sheer size of their data centers and the scalability that comes with them. As data demands have gone through the roof, many businesses have a lot of data to process and store. So a provider with massive facilities can provide the infrastructure to handle all that data. 

But it’s not just the scalability that makes hyperscalers attractive for businesses. There are several other advantages. 

Benefits of Hyperscalers

There’s a reason why companies such as Google, AWS, and IBM are some of the largest cloud service providers. Over the years, their customer base has grown significantly, indicating that businesses are moving to the cloud. Here are the benefits of hyperscalers besides easy scalability:

• No on-premise infrastructure: The most obvious benefit of migrating to the cloud is that you don’t need a data center on-site. This is one of the reasons existing and new businesses base their infrastructure on hyperscalers, and they don’t have to source, manage, and maintain physical assets, such as servers, storage, cooling systems, etc. 
  
  
• Increased availability and reliability: With their large infrastructure, hyperscalers can offer higher availability of resources as and when needed. Enterprises can ensure that their employees or customers can access the applications and data they need. In other words, hyperscalers have proven to be reliable. 
  
  
• Global footprint: Another advantage of hyperscalers is that their data centers are located globally. This is an important consideration for multinational companies as they need their infrastructure in multiple locations. Rather than constructing data centers in every region, they can simply rely on the locations of the hyperscalers using the same systems. 

Challenges With Hyperscalers

While hyperscalers have solidified their position in the cloud computing market, many businesses choose to host their data centers or use colocation providers. 

Hyperscalers may offer scalability and reliable performance, but they don’t offer ownership of the physical infrastructure. And that can be a deal breaker in certain situations. For instance, enterprises that handle sensitive data may not want to use the public cloud. 

Although hyperscalers invest heavily in security, data breaches are still a problem. In 2022, 45% of businesses faced a cloud-based data breach or failed audit. 

Similarly, choosing a hyperscaler doesn’t free you up from configuration and management of the infrastructure. You must set up, configure, and maintain virtual servers and applications unless you use managed services. 

Hyperscalers vs. On-Premise Data Center: Which Is Better?

Hyperscalers arguably offer many advantages, and enterprises are leveraging those benefits. This is evident by the massive growth of such companies on the back of their IaaS offerings. People are buying what they are selling. 

Is it better than on-premise? For most large enterprises, yes. That said, on-premise data centers can be a good choice for companies requiring full infrastructure control. In other words, they want full autonomy in choosing, configuring, and using the hardware. In certain instances, such as in the case of intelligence organizations, on-premise data centers may be necessary. 

The decision depends on factors such as business requirements, nature of operations, cost, and expertise. Many large companies don’t want the hassle of managing physical assets, so they work with hyperscalers instead. 

How to Choose a Vendor?

If you’ve decided to go with a hyperscaler, you must first accept that there’s no one-size-fits-all approach to working with large cloud providers. While your choices are somewhat limited, given the few hyperscalers worldwide, choosing the right one requires strategic thinking. 

Many companies work with different hyperscalers to meet their needs (multi-cloud strategy). Similarly, many enterprises have both on-premise data centers and host some of their workloads on the public cloud (hybrid cloud strategy).  

As hyperscalers have such enormous data centers, you’d think they’d be a cheaper option. While they market themselves as cost-effective, not all customers may walk away with a bargain. But if used strategically, hyperscalers can offer a cost advantage. 

Again, you must base your decision on business needs and unique circumstances. 

The Bottomline

Hyperscalers such as Google, AWS, and IBM own the lion’s share of the cloud market for a good reason. These companies have invested billions in infrastructure innovation to offer cloud computing and storage at such a massive scale. The scalability, flexibility, and savings make it all worth the choice for enterprises that use their services.  

At the same time, many large companies choose to go with colocation providers or stick with the good old on-premise data center approach. Of course, having an on-premise data center means equipment maintenance is your responsibility. 

OneCall allows data centers to maintain hardware beyond their end-of-service life. Learn how PivIT’s maintenance program can benefit your on-premise infrastructure.