Is the Data Center Disappearing?

Data center investment grew at 6.3% in 2017 and is expected to expand 3.7% in 2018

Numerous commentators have written obituaries for the enterprise data center. Oracle CEO Chris Hurd, for one, predicts 80% of corporate data centers will be gone by 2025 and is rushing to expand the company’s cloud capacity to vacuum up the expected demand. Additionally, Gartner has been on record for some time with its forecast that by 2020, more compute power will be sold by IaaS and PaaS cloud providers than deployed into traditional data centers.

These analyses have had everyone from hardware OEMs to CIOs wondering whether there is any future in centralized, on-premises data centers, but their foreboding must be accompanied by some caveats.

The Data Center is Dead. Long Live the Data Center.

It’s true that corporate interest in owned data center assets has shifted; however, data center investment still grew at 6.3% in 2017 and is expected to expand 3.7% in 2018, according to Gartner. And while the data center industry’s spending hit record levels last year, hybrid implementations remain the talk of tech town.

In fact, larger businesses are finding owning data centers to be less expensive than renting space. Forbes reports that while SMBs are retaining only about 50% of their data centers, for enterprises the figure is closer to 80%.

What’s more, IT leaders are starting to look toward the edge as an emerging trend, which will result in micro-data centers and smaller processing installations in branch offices. The centralization pendulum is swinging again toward distributed systems, with significant impacts on the horizon for IT planning and maintenance.

One Way to Make It All Work

With these developments, life for infrastructure and operations (I&O) leaders is becoming more complicated. They must now manage interdependent systems comprising on- and off-premises capabilities and cloud- and non-cloud architectures.

To succeed with the off-premises side of the equation, planning, oversight, and attentive “cloud sprawl management” will be required to avoid unexpected increases in costs. On-premises challenges, like IT hardware acquisition, lifecycle management, and increasingly predictive maintenance will remain on the “to do” list as well.

How each organization deals with these challenges will differ. Finding the right partners will be a key element of most workable solutions. Bringing in a third party maintenance provider capable of cutting support costs, extending hardware lifespan, and even taking on troubleshooting and maintenance at the edge offers greater advantage than ever before.