Is the on-premises data centre dead yet?
Traditional data centres have been flagging for a while now, and new information suggests companies are now far more likely to outsource their information to secure data management companies, rather than build their own facilities.
A study by the leading research and advisory consultancy, , suggests that while a large proportion of information is migrated to the cloud, businesses that require new apps and services are looking to outsource their data management.
According to the study, 10% of enterprises have already decommissioned their traditional on-site data facilities, and by 2025, an estimated 80% of organisations will follow suit.
Data centre management companies offer a range of services to businesses, and companies can shop around and look for the best options, that consider network latency, customer population cluster, geopolitical limitations, and the placement of applications.
Security is a huge consideration too. With the growing sophistication of cybercrimes, many companies struggle to keep up with the latest tech that keeps their data safe. A recent on third party data centres and cloud uptake by Deloitte, states, “Cybersecurity attacks are rising in sophistication, and a shortage of skills means that many companies are struggling to manage security in-house. Some IT executives are turning to third-party cloud and managed security services, with cloud providers delivering sophisticated cyber capabilities and solutions and cloud offering the potential of helping to mitigate security incidents.”
The storage of data is big business. Amazon Web Services recently launched – a hybrid data storage management system that enables companies to have data storage equipment on their site. This is plugged into the local network and then managed by AWS, which provides secure cloud services, colocation options and more.
The cost associated with rebuilding old data centres doesn’t add up economically for most companies. As security regulations tighten up, latency standards sharpen and more capacity is required, using a third-party data management entity where someone else manages the physical infrastructure, makes much more sense.
Colocation has become popular because it provides better availability, reliability, certified building tier levels, energy efficiency, dedicated facilities management, and the ability to scale.
To put the decline of on-site data centres into perspective, Gartner’s 2019 IT Key Metrics Data reveals the percentage of IT budgets spent on data centres has fallen in the last ten years to just 17% of its former total.
Cloud computing is also gaining popularity with SMEs, enabling enterprises to utilise applications over super-fast internet connections, and bypassing the need for investing in computer software and hardware.
Today, hardware that stays on business premises, states Gartner, is mainly equipment that is needed to run mission-critical processes. These may require greater management than services currently on offer via the cloud infrastructure.
Equinix: Digital leaders expect changes to working patterns
A global report released by Equinix has revealed that digital leaders expect long-term changes to the way people work.
As part of the report, the data infrastructure company surveyed 2,600 IT decision-makers from several different businesses spanning 26 countries in the Americas, Asia-Pacific and EMEA regions. The study also highlighted the biggest technology trends affecting global businesses and how the COVID-19 pandemic has impacted digital infrastructure plans.
Talking about companies’ expansion strategies, Claire Macland, Senior Vice President of Global Marketing at Equinix, said: “Many companies are now investing more in their digital infrastructure to enable them to embrace a hybrid working model and thrive in the new world of work we all find ourselves in.
“Despite headwinds in many sectors, many organizations are continuing to expand physically and virtually into new markets and regions around the world”, she said.
The report drew the following conclusions:
- 64% of the 2,600 digital leaders surveyed believed there will be “long-term changes to both how and where people will work in the future.
- 57% of global companies intend to expand into new regions despite the effects of the pandemic
- 51% of businesses worldwide say they have rearchitected their IT infrastructure so that it can meet the demands of remote and hybrid working. Digital transformation has also been accelerated due to an increase in businesses’ technology budgets.
How might digital transformation be affected post-pandemic?
COVID-19 has demanded that companies make several changes to the way that they operate, including digital transformation. According to the study, 47% of those surveyed reported that they have accelerated their digital transformation plans because of the Coronavirus pandemic. A further 42% of organisations said their budgets have increased to keep up with the growth of digital transformation.
Another change in adapting to the pandemic was to businesses’ IT strategies with six in 10 companies saying that it has been revised in response to the situation. 58% said they are looking to invest in technology to “improve agility’ post-COVID.
When asked about their priorities for their digital strategy, 80% of respondents said that digitising their infrastructure was of utmost importance, while 57% viewed interconnection as a ‘key facilitator’ of digital transformation.
"This increasing focus on digitization and expansion is one of the reasons why Equinix has continued to invest in its own growth. We completed 16 new expansions in 2020—our most active build year ever—and expect to continue to evolve Platform Equinix to support our customers as they continue on their digital transformation journey”, said Claire Macland.
Potential concerns disperse over expansion plans being halted by COVID-19
The study has also revealed that organisations’ previous concerns that the pandemic will negatively affect their business expansion plans have been lessened.
57% of businesses have said that they “still have plans” to expand into new regions and of that percentage, nearly two-thirds (63%) plan to do so virtually instead of investing in physical IT infrastructure.
The full Equinix report can be found here.