Several things make bare-metal cloud providers appealing compared with traditional cloud providers, which operate in a virtualized environment. Bare-metal providers give users more control, more access to hardware, more performance, and the ability to pick their own operating environment.

There’s another interesting angle, as articulated by Martin Blythe, a research fellow with Gartner. He maintains that bare-metal providers appeal to small and mid-sized businesses (SMBs) because those companies are often small, local players, and SMBs looking for something more economical than hosting their own data center often want to keep the data center nearby.

“If you don’t want to maintain a data center in your downtown office block and don’t want to build something, these guys can provide it for you. You simply manage them remotely, and if you want to inspect the site, it is close to your headquarters,” Blythe said.

Why companies want their bare-metal provider to be nearby

Not surprisingly, there is a preference for firms to have their provider in the same state. In Europe, it’s even more important for several reasons. First, you have a lot of European companies throwing up borders around the internet in light of the NSA spying fallout from a few years back, particularly Germany. Microsoft responded by building data centers in Germany that would be for only German companies and government agencies.