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Study Shows About Two-Thirds of Enterprise Workloads Remain In-House

Cloud outsourcing not as rampant as many believe.

• By David Ramel
• 05/03/2017

Is the cloud killing off on-premises datacenters? It's a major fear of IT admins everywhere: that their jobs will be outsourced as companies move their IT operations to public platforms like Amazon Web Services (AWS) and Microsoft Azure.

A new report may have those admins breathing easier -- at least for the time being.

Shortly after DatacenterDynamics asked the question, "When Will Cloud Kill In-House Facilities?" the answer seems to be "not for a while," judging by a new report that says "the vast majority of enterprise IT workloads are hosted in enterprise-owned and colocation datacenters."

In fact, says the seventh edition of an ongoing report series from Uptime Institute, the percentage of workloads running in enterprise-owned and operated datacenters has stayed at a stable 65 percent since 2014.

"On average, respondents report that nearly two-thirds of their IT assets are currently deployed in their own datacenters, with 22 percent deployed in colocation or multi-tenant datacenter providers, and 13 percent deployed in the cloud," said a statement published today by Uptime Institute, which says it's an advisory organization focusing on business-critical infrastructure.

The new study jives with the DatacenterDynamics article -- penned by Interxion's Andrew Fray -- in several ways. Both agree that the shift from running workloads in on-premises datacenters to cloud-based infrastructure is continuing apace. Fray's article states that while 90 percent of datacenters were owned by enterprises in 2005, research firm IDC expects that to be more along the lines of a 50-50 split by 2020. "By 2021, there will be 15 percent fewer datacenters compared to 2015, as in-house facilities are abandoned," Fray said.

Indeed, the Uptime Institute survey confirms that the majority of IT organizations are moving some of their workloads to the cloud, but not at a growing rate.

"The survey findings reflect several key trends that are acting together as a powerful catalyst for change within the industry," Uptime Institute said. "Increased performance at the processor level, further expansion of server virtualization, and the adoption of cloud computing have all created an IT foundation that differs greatly from those seen just five years ago," said exec Matt Stansberry.

"Through this change, enterprise-owned datacenters have remained a central component. We urge datacenter and IT professionals to focus on the business aspects of running their IT foundation, creating sets of repeatable processes to make it work efficiently and adopting new technologies and solutions when the business demands it."

Other highlights of the survey as listed by Uptime Institute include:

• Datacenter budgets stayed strong in 2017. Compared to 2016, nearly 75 percent of companies' datacenter budgets have increased or stayed consistent this year.
• IT resilience is growing, complementing redundancy. The majority of companies (68 percent) rely on IT-based resiliency. Using an IT architecture with multiple, geographically distributed datacenters, they rely on live application failover in the event of an outage. At the same time, 73 percent of respondents said they are not deploying lower redundancy physical datacenter sites despite increased adoption of IT-based resilience.
• Downtime matters. More than 90 percent of datacenter and IT professionals believe their corporate management is more concerned about outages now than they were just a year ago.
• Metrics and business. While 90 percent of organizations conduct root cause analysis of any IT outage, only 60 percent report that they measure the cost of downtime as a business metric.

"The takeaway is that with the explosive growth in business-critical applications and data, enterprises continue to see the datacenter as not just important, but essential to their digital-centric strategies," Uptime Institute said.