Will data centers soon be history with the Cloud masking its presence? We need to wait and see.
A study by Intel shows that nearly 45 percent of the present public cloud usage by enterprises is driven by new, cloud-enabled workloads. This essentially means that as the demand for public and private clouds increases, enterprises are adopting a hybrid strategy to manage their workloads.
This also gives IT managers’ flexibility to manage fluctuations.
However, the biggest temptation for enterprises that are considering the cloud is the savings on capital costs. A recent survey of 6159 executives, conducted by IDC finds that one in seven organizations with cloud workloads have optimized their cloud strategies. Some say the decision is on the fly or ad hoc. Only a few have incorporated cloud into their overall strategy.
Going back to the point on cost savings, in the same research, `cloud-advanced’ organizations have seen an annual benefit per cloud-based application of $3 million in additional revenues and $1million in cost savings.
However, those organizations which are looking to the cloud for workload management have several unanswered questions. What is the security provided for their data? How sure can they be that this data won’t be compromised?
For companies working with highly confidential information, the costs savings is not that important that they are willing to forego security for this reason. They hover over making the final decision and instead opt for the middle path where they make a hybrid management of their workload. But what is the point of this?
In this scenario, there is still the infrastructure that has to be managed, staff to take care of it and then now there is the cost of cloud services too.
When Amazon launched Amazon Web Services nearly a decade ago, it was a historical moment. It created a transformational shift in the typified data Center concept. Amazon had a $300B data Center from which it could sell off capacity with pay-as-you-go pricing.
The top cloud development in 2015-2016 has thus transformed the concept of a typical data Center. So, keeping this fact in mind, it would be easy to assume that data centers are passé. They are no longer in vogue.
However, all organizations focus on the bottom line, i.e. cost of infrastructure and any savings when calculating a data Center in the typical sense is simple. I mean, how difficult can it be to calculate the cost of a CPU chip, labor cost for deploying and maintaining a server.
However, calculating the cost for Cloud services is not that simple.
Also, when we think of infrastructure investment for a data center, it is more often than not a one-time expenditure. Even though it seems high, when amortized over a long period of time, the cost comes down. Can the same be said for cloud computing?
One point in favor of the cloud is utilization. Most cloud service providers have the pay-as-you-go option and you pay only for utilization.
In a typical data center, while the equipment is bought keeping in mind maximum usage, more often than not an application running on it may use only 50% utilization of capacity.
Gartner estimated that properly managed storage infrastructure has server utilization of less than 15 percent, CIO Magazine cited a Gartner analyst calling it at about 25 percent, and most recently AWS pegged on-premise utilization at less than 20 percent. IT managers say that they probably use around 10%.
Cloud services’ value should not be limited only to cost savings. It is also its ability to free up resources, provides flexibility to grow and shrink based on requirements, removes maintenance pressure, and then finally offers some amount of cost advantage.
When the cloud is viewed from this angle, the decision for IT managers is clear. The cloud makes sense. Cloud services are therefore taking over the world of infrastructure and data centers have to prove their worth to retain their position as the nerve center of the IT department of a company.
One strong point which continues to work in the favor of data centers is security. What is within my premise is safe. What is on the cloud may not be that safe. Whatever points the cloud might have in its favor, it will have to have a strong argument to beat the security issue when compared to data centers.