Outlook 2016: Datacenters Yet to be Buried

The Gartner Worldwide IT Spending Forecast states that worldwide datacenter spending in 2015 has declined by 3.8 percent, from $142 billion in 2014 to $136 billion. Several IT leaders have declared cloud computing to be the definite future as well. So, if cloud is taking over, what is driving the datacenter market?

While enterprises are disrupting their legacy and adopting cloud, security still remains a big risk, one which enterprises try to reduce — if unable to completely eliminate — by holding on to their datacenters for on premise functions. “Datacenters are the best example of ‘sweating out the existing assets’, to make the most of what is already there,” said Prasad Patil, VP of IT at Essar Group.

No matter how much you want to trust cloud service providers or even your users accessing data on the cloud, sometimes, datacenters can prove to be more secure when it comes to critical data because the company has sole control over it.

Are datacenters really expendable? Of course not. Like Stevenson said, the best way is to have a hybrid infrastructure, in which you have your critical workload in your in-house datacenters, and your data intensive tasks can run on cloud. Gaurav Sharma, research manager, enterprise computing at IDC agreed.

“Datacenters will remain in the future as well, but the way they are accessed or utilized is sure to undergo a change from legacy-based to a smart IT enabled – maybe hybrid – form,” he said. Agreeing to Sharma, Santosh Rao, principal research analyst at Gartner, added that 2016 will see enterprises accelerating their datacenter modernization efforts to facilitate such agile hybrid architectures.

The most important advantage of datacenters over cloud is security. No matter how much you want to trust cloud service providers or even your users accessing data on the cloud, sometimes, datacenters can prove to be more secure when it comes to critical data because the company has sole control over it.

Ramnath Iyer, CTO at CRISIL, pointed out that while cloud might be taking over the market, its security and cost competitiveness, in India, is yet to be properly addressed. “I’m considering a shift to the cloud by the end of this financial year, at least when it comes to lower level operations, but we’ve to face the truth that it is not as sophisticated as we want it to be,” he said.

Sharma said that for SMBs, cloud-based infrastructure would be a more cost effective and easy way to build and scale, but after reaching a certain size, a hybrid setup is the right way to go. “As connectivity options take a leap in India and worldwide, cloud adoption is also expected to gain pace,” he added.

Are CIOs that flexible and eager to move? Apparently not. Madhavan Kandadai, CTO at IndusInd Bank, uses someone else’s datacenter, like most mid-level organizations and is not keen to move to cloud just yet. “Just to pave a way towards cloud, we are likely to move on to it by the end of this financial year by shifting some amount of workload,” he said. He added that cloud service providers are not really looking at the pricing aspect of it with regards to our economy.

For Patil, the inability of moving existing applications, which are tied and tuned to his legacy infrastructure, makes moving to cloud completely very difficult. “Even though my legacy infrastructure is inefficient when compared to the newer technologies, this inability will make me continue with it,” he said.

Many IT organizations still operate their datacenters the way they did 20 years ago — using waterfall processes and idle-driven systems.

Legacy is also a question that needs to be asked when it comes to datacenters. Last year, Chief Strategy Officer for Dimension Data’s ITaaS Service Unit, Treb Ryan spoke about how IT organizations need to be bolder with their approach to datacenters to have some fun. “Many IT organizations still operate their datacenters the way they did 20 years ago — using waterfall processes and idle-driven systems. They’re missing a great opportunity to take advantage of new architectures and systems, which will allow them to be more responsive and more cost-effective,” Ryan was quoted.

In a blog post on datacenterknowlegde.com, John M. Hawkins, VP of Marketing and Communications at vXchnge commented on datacenters and their functions and wrote, “Having a datacenter partner with reliable and resilient infrastructures, strategically situated in multiple areas around the country, will help keep data safe and functioning properly.”

Hawkins added that over time research has concluded that cloud and datacenters are not in competition and they complement one another. In fact they need to work together in order to properly function instead. Now that we know datacenters are not going anywhere, is it all sunshine? Or is there a dark cloud looming over their fate?