Traditional Datacenter Isn’t Dead Yet

Still tickin’.

A major survey released this morning from the Uptime Institute has good news for datacenter managers: Traditional, on-premise, in-house, staff-operated data centers are not dead yet.

Better, they have not yet been replaced by traditional outsourcing operations in India, China and other countries with good educational systems and low pay scales—a persistent concern for domestic-datacenter managers.

Traditional datacenters aren’t actually on the verge of irrelevance or dissolution, for the most part, according to the Third Annual Data Center Industry Survey from The 451 Group’s Uptime Institute. But they are losing ground to third-party cloud providers, whose equipment is newer, energy efficiency is higher, and capital- and operations budgets are increasing more quickly than traditional datacenters.

Adoption of external cloud services—once considered the infrastructure version of BYOD or rogue IT development—is now a significant part of enterprise datacenter portfolios.

Enterprise adoption of external clouds grew 70 percent this year, from 10 percent during 2012 to 17 percent this year, according to Uptime’s survey.

Brand-new services and datacenters may always be attractive, but enterprise facilities aren’t keeping up with the ongoing spending of external facilities, either. The market for datacenter construction or refurbishment will keep growing at an afterage of 10.71 percent between now and 2016, according to a May report from market-research firm TechNavio.

Ninety-eight percent of datacenter owners reported having plans to expand their facilities either this year or next in order to increase security, energy efficiency, and the applications and services they could provide or simply for more space, according to another report from datacenter siting and construction-services firm Digital Realty Trust.

Enterprise datacenters are getting decent increases in budget, but aren’t keeping pace with external providers, however. Digital Realty’s study estimated the average enterprise datacenter budget increase was only 7.7% percent for 2013, compared to 7.2 percent the previous year.

The Uptime survey showed 47 percent of enterprise datacenters getting budget increases of 10 percent or more for 2013, compared to 2012. Among external service providers, 77 percent reported getting budget increases of 10 percent or more.

The budget increases and growth in both the number and size of facilities shows enterprises do put high value on their datacenters, but possibly not as much value as external providers who depend on top-quality datacenter services to an even greater degree than enterprises, according to Matt Stansberry, Uptime Institute director of Content and Publications.

Enterprises are looking for more power-efficiency, cost-efficiency, flexibility and lower capital costs, all of which favor external cloud, co-location or hosting providers, but not to the complete exclusion of traditional datacenters. “This isn’t the end of the enterprise-owned datacenter, but it should serve as a wakeup call,” according to Stansberry, in a statement included in the announcement of the report. Enterprise datacenter managers will just have to work harder to demonstrate their value and efficiency, as well as the special knowledge of traditional insiders entrusted with legacy systems few external providers are interested in adopting.

“Going forward, enterprise data center managers will need to be able to collect cost and performance data and articulate their value to the business in order to compete with third-party offerings,” Stansberry added.

 

Image: Yentafern/Shutterstock.com

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