In an article entitled Oracle’s Hurd: Company-Owned Data Centers Face Zombie Apocalypse, hosted by Forbes Voice, a sponsored content media outlet, Oracle CEO Mark Hurd projects that company-owned data centers will decrease 80% worldwide by 2025 as companies commit all-in to the cloud.
A key excerpt:
“Saddled with old, inefficient IT infrastructure and applications, most companies today are forced to spend about 80% of their IT budgets on support, upgrades, and patches, leaving only 20% for new development, Hurd noted during his keynote address at Oracle OpenWorld on September 19. But those CIOs who cede their time-consuming and costly data center operations to cloud providers will be able to break out of that 80/20 IT spending trap, he said.”
The thought that corporate data centers will cease to exist is difficult to support. Executives are smart, and are not just coming to the realization that they can’t be stuck with outmoded, inefficient IT infrastructure. They’ve been addressing it for years by virtualizing at a very rapid rate.
Cloud growth is real, and while we can expect that most application growth will be cloud-native, nearly all organizations of any size will have core operations that need to exist somewhere in an environment of full trust and control.
Some smart infrastructure pros have shared information recently (not in reaction to Oracle’s content) on different topics that are germane to the limits of full cloud adoption. The article brought some of those comments to mind.
Large Enterprises Will Continue to Have Data Center Needs: A real estate executive in that data center space recently told me, “I speak with dozens of executives regularly about this stuff and they’ve already made moves to the cloud. Every single one of them has some mix of company-operated data center, colocation environment, and cloud, and believe that they will have some combination of those three elements for the foreseeable future.”
Cloud Adoption has Limits: An IT infrastructure consultant recently said about the cloud, “Most organizations we deal with have virtualized to the full extent that they can, but choose to retain core assets in company owned data centers or colocation environments. Most of their new applications will be designed for the cloud, but not all. It is tough to see large organizations not having a data center presence.”
Cloud Isn’t Cost-Free Magic: While cloud can offer financial enhancements, it isn’t magic. In a discussion on customer expectations an executive at a cloud provider recently explained, “the cloud isn’t about trading IT budget from nuts and bolts to innovation. Whether you buy and manage the nuts and bolts or cloudify them, there are still nuts and bolts at the end of the day, and they’ve got to be paid for.”
This view on cloud merely shifting expenses in many instances was actually, supported by the use case in the article, an Australian organization that saved $385,000(US) by closing down two company-owned data centers and moving to the cloud. $385,000 is about what the overall cost (payroll and benefits) for a pair of experienced cloud engineers would be. Was that just an expense that shifted to payroll?
The cloud isn’t going anywhere, and is likely to become a more important part of the overall IT infrastructure mix as most new applications are built with the cloud in mind. Smart technology and business managers have adjusted to that, and have decided that data centers will continue to be an integral part of the service mix for most large organizations.
Apocalyptical imagery about an important part of the infrastructure mix may be a trendy way to get a sales message across, but the current decisions being made by enterprises confirms that data centers, both company-owned and multi-tenant colocation facilities, will continue to play important roles for the foreseeable future.