The performance of many large-scale and data-intensive distributed systems critically depends on the capacity of the interconnecting network. This paper is motivated by the vision of self-adjusting infrastructures whose resources can be adjusted according to the workload they currently serve, in a demand-aware manner. Such dynamic adjustments can be exploited to improve network utilization and hence performance, by dynamically moving frequently interacting communication partners closer, e.g., collocating them in the same server or datacenter rack. In particular, we revisit the online balanced graph partitioning problem which captures the fundamental tradeoff between the benefits and costs of dynamically collocating communication partners. The demand is modelled as a sequence $σ$ (revealed in an online manner) of communication requests between $n$ processes, each of which is running on one of the $\ell$ servers. Each server has capacity $k=n/\ell$, hence, the processes have to be scheduled in a balanced manner across the servers. A request incurs cost $1$, if the requested processes are located on different servers, otherwise the cost is 0. A process can be migrated to a different server at cost $1$. This paper presents the first online algorithm for online balanced graph partitioning achieving a polylogarithmic competitive ratio for the fundamental case of ring communication patterns. Specifically, our main contribution is a $O(\log^3 n)$-competitive randomized online algorithm for this problem. We further present a randomized online algorithm which is $O(\log^2 n)$-competitive when compared to a static optimal solution. Our two results rely on different algorithms and techniques and hence are of independent interest.