Why is More Data Staying On Premises?

Security, performance and costs are leading enterprises to reconsider their use of public clouds.

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Enterprises are keeping more and more data on premises. This shift, which involves on-premises infrastructure and often some form of private clouds, is hard to deny.

In a survey last year of more than 400 enterprises in the United States, market research firm IDG found IT and general management expecting on average to keep 52% of data on premises, up from 48%. Related surveys of European and Asian businesses showed even greater increases in the number of respondents expecting to keep more than half of their data on premises.

More data on premises means less public, if not necessarily more unmixed, private cloud. The U.S. survey, for instance, has private cloud usage remaining constant, while expected use of public cloud dropping by half and “mixed private/public cloud” increasing by 40%.

A separate IDC study, drawing from a worldwide survey completed in early 2018 of 400 IT decision makers, showed much the same. On average, according to the data shared in a Blocks & Files article, respondents were expecting over the next two years to repatriate half of their of their data off public cloud applications to hosted private or on-premises locations.

Security, Performance and Costs

What’s going on here? The IDC survey indicated several reasons, the top being security. Each public cloud, private cloud, hybrid, mixed and on-premises deployment has its strengths and weakness. But the security, compliance, and general control available on the public cloud leaves many enterprises wanting.

In our managed services practice, we see enterprises requiring very tight control in several verticals. Financial companies are looking for PCI-compliant private clouds to handle card transactions and cardholder data; and healthcare companies are asking for HiTrust-certified private clouds. (HiTrust is common framework that incorporates HIPAA, PCI and other security standards.)

In terms of performance, the feature most valued in the public cloud has been flexibility. Yet elastic storage, containerized applications and pay-as-you-go models have now become part of on-premises and private cloud environments. The bridges between public cloud and enterprise data centers, such as Microsoft’s Azure Stack (we were an early supporter), have also made it possible to keep data primarily on premises.

As for costs, about four years ago I recommended going with a private cloud for any deployment of more than 200 VMs. Last year, as I wrote in this InfoWorld article, the number looked closer to 100. Without offering a new number now, I’ll simply say that cost is becoming less of a differentiator, especially when considering long-term, total cost of ownership.

An enterprise that runs on applications is going to need to keep data for years. Every case is different, but if the cost advantage of public cloud goes away, if elasticity is not even required, and if security and control remain high priorities, then the private cloud and on-premises options are going to look all the more attractive.

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