By Mary Pratt, Search CIO. June 1, 2015. See original article here.
The cloud hasn't supplanted the enterprise data center, but, as these CIOs attest, public cloud services set the pace and offer ample reasons for keeping some IT on-premises.
Josh Bauer was facing a typical scenario: Company employees were trying to bypass IT-sanctioned applications in search of a better way to share files.
Many IT departments would opt for a cloud solution. But Bauer, assistant director of network operations at Acorda Therapeutics Inc., based in Ardsley, N.Y., had to contend with government regulations mandating the company keep hold of its data. So he opted for EMC's Syncplicity by Axway, a file-sharing solution he could host locally.
"Some apps make sense in the cloud. Things that aren't complex are in the cloud. For example, our expense reporting is in the cloud. But we have apps with some heavy regulation, and we are required to have ownership of the data, so we keep that in the data center," he said.
Bauer won't shutter his company's data centers any time soon -- and he's not alone in his approach. Even in this age of cloud-first policies, many organizations still have data centers and, more important, they plan to keep their own data centers for the foreseeable future.
"Data centers have never really gone away and never will," said Ana Lopez Diaz, Accenture's CIO managing director for cloud.
Still, operating an enterprise data center is hardly business as usual for CIOs, said Henry Baltazar, an analyst at Forrester Research.
"Organizations aren't building data centers any more. They're not going to get a competitive advantage doing that," he said.
And existing data center strategies are changing rapidly, Baltazar and other analysts said.
Yes, some organizations still own and manage large facilities that house their servers in centralized data centers. But some use regional or local data centers -- essentially smaller versions of the centralized data centers, providing services for specific purposes and/or users. Others opt for colocation -- renting space in a facility owned and managed by a third party but where IT organizations still own and manage servers and other data center hardware. Still, others go with a variation of colocation, where ownership or even management of the hardware is contracted out to a third party. Organizations that are making heavy use of cloud computing may have just a server room or server closet.
"There are more options to navigate around, and we're still trying to understand the impact of the different choices. It's quite challenging for CIOs right now to understand all this and to make the right decision," said Andrew Donoghue, European research manager with 451 Research.
In its Q1 2015 Voice of the Enterprise: Datacenters Preview, published in April and written by 451 analyst Dan Harrington, 451 questioned 1,278 IT decision makers primarily based in North America and Europe on their data center strategies and found that 49% of the respondents own their own facilities while 51% do not, relying on server rooms, closets, colocation, or cloud and service providers to deliver IT resources.
Right now most organizations are devising hybrid strategies that have them keeping their data centers to hold some applications while putting other applications in the cloud, analysts and IT leaders said. This hybrid environment means there's still an important role for the enterprise IT data center.
"We firmly believe that on-prem isn't going away," Baltazar said.
Baltazar noted that not all systems can or need to be moved to the cloud. Legacy systems won't make the leap anytime soon. Systems that handle highly sensitive data (i.e., data that needs to be tightly controlled due to compliance, security or privacy concerns) should be held in an enterprise data center. Systems that run well in an on-premises environment, such as systems of record, can stay in the enterprise data center as well.
"In most cases [organizations are] being opportunistic about what should be moved and what shouldn't be moved to the cloud," Baltazar added.
Hybrid strategies prevail
That's the case at Valdosta State University in Georgia, where CIO Brian Haugabrook is balancing several options.
Today Haugabrook has one primary data center. He, like many other CIOs, has transitioned some applications to the cloud and plans to move more to the cloud in the near future.
"Over the next three to five years, I'd say 80% of our services will be in the cloud. But there will always be a need for services on campus," he said. For example, he plans to keep the door-locking and fire alarm systems in his own data center, where he isn't reliant on a connection to a cloud provider for them to work. His closed-circuit security system, with its high demand on bandwidth, will stay in his data center, too.
Hybrid strategies like Haugabrook's also typically require staff training and reassignment of IT roles.
Haugabrook said he plans to transition his staff to roles focusing on automating and integrating systems.
He's also focusing on what to do with the extra space; the campus data center, built nearly 10 years ago, was designed to hold about 600 servers. He said he's looking at renting space to small businesses in the area that need to house their own infrastructure.
The big challenge is how to get his data center to be more responsive. "IT can no longer afford to take months to plan out the infrastructure," Haugabrook said, noting that his team is installing new virtual technologies to automate server creation and resource allocation similar to the services offered by large cloud providers.
More 'elastic compute'
Indeed, there's a consensus that enterprise IT departments must learn to run their data centers more like cloud operations in terms of speed and elasticity. They can no longer take months, or even weeks, to provision equipment for new applications or for innovative development projects. That, too, must be part of enterprise hybrid strategies moving forward.
"It's important that we continue to offer the same or better service than the cloud providers offer," said Acorda Therapeutics' Bauer, adding that he has taken that approach ever since his early adoption of server virtualization technology nearly a decade ago. "We're used to offering on-demand resources."
Josh Neyer has a similar take. Neyer is the global head of data centers for TransUnion, one of the three national credit bureaus that compile consumer credit histories. Although some of the company's systems run in the cloud, he said mission-critical applications remain in its data centers for security and privacy reasons.
Neyer also doesn't see his data centers going away, but he does expect the demands on them to change. He, like others, said he has to provide "more elastic compute," just as cloud providers deliver to their customers.
"Companies can get better at spinning up with their own systems if they choose to; they don't have to go to the cloud," he said.
Indeed, 451 Research’s Donoghue said he's starting to see data center strategies that incorporate this, with enterprises figuring out how to shift workloads to the cloud at peak times -- whether that's once a day, once a week or once a month. That allows organizations to build out their infrastructures to slightly less than peak, yet still meet demand at the highest times. He said he's also seeing organizations building in less disaster-recovery resiliency and instead planning to migrate to cloud or different facilities if something goes down. That plan gives them "cloud-level resiliency," he said.
Accenture's Lopez Diaz sees a lot of promise in the hybrid environment that makes up her data center strategy.
"Cloud is an integral part of Accenture's IT strategy, as we believe it can make our IT organization more responsive, more flexible, more scalable and more cost-competitive," Lopez Diaz said in written responses to interview questions.
Still, she said despite the firm's cloud-first strategy, "we believe there will be some data and applications that are not ready or appropriate for the cloud." As such, she also champions hybrid strategies. Accenture will keep its data centers for now -- and exploit the cost effectiveness of the cloud.
Moreover, Lopez Diaz said evolving business needs could breathe new life into enterprise-run data centers everywhere.
"We believe most companies will create hybrid environments that mix on-premises and off-premises IT and integrate cloud with legacy systems and traditional software. Flexibility is best supported by modular infrastructure design. Whether [the] data center is cloud-based or on-premises, it's essential to be able to quickly scale in order to meet changing needs," she said.