“I Want to Get Out of the Data Center Business”

CIOs everywhere are stating that they want to get out of the data center business and move to the cloud. Is this just a temporary, trendy shift or a long-term solution?

Cloud providers such as Microsoft, Amazon Web Services, Google, and Oracle are maturing their offerings and marketing their services as the optimal solution. While you can’t always believe the marketing story, there are some compelling reasons to consider cloud.

Cost

There are many hard-dollar and soft-dollar items that make up the true cost of maintaining a data center. While data center cost largely implies purchasing and maintaining servers, power systems, and networking equipment, it also includes what may be considered trivial facilities-related items such as fire inspections, doormats, and office cleaning services. Some of the minor costs—e.g., badge systems—may get buried in general business operating expenses and not be charged to the data center.

Realistically, the cost for cloud services will be higher than the cost for maintaining a data center. Think of it this way: if you mow your own lawn, you pay an up-front cost for your lawn tractor and ongoing costs for fuel, blades, and other minor maintenance. If you engage a lawn service, that provider must charge a higher amount in order to cover costs for more expensive, durable equipment and maintenance that is used all week long, plus add a healthy profit. Is the cost for a crisply cut lawn that saves you a couple of hours a week of value to you?

While the 2017 financials are a few weeks away from being released, Amazon Web Services will likely continue to retain the top spot for market share and revenue. However, with the mid-range players—e.g., Google and Oracle—fiercely competing for business, we are likely to see costs for services and storage decrease.

Think back to that high-powered lawn tractor that sits in the garage 166 of 168 hours a week underutilized. That higher cost for engaging a service may be offset with redundancy options and flexibility that were not available in the do-it-yourself model. So, is cloud cheaper? Probably not. Better and/or faster? Probably.

Security

We’re consistently barraged with news about security vulnerabilities, major hacks, and data leaks. Whether the security holes are the result of an oversight or deliberate malicious intent, data exploitation is a real and serious threat to information security, whether data is stored in a local data center or the cloud.

Where internal data centers are used to support IT, audits, logging, and forensic data range from optional to strictly required, depending on the type of business. Of course, healthcare and banking have stringent audit requirements, whereas a small manufacturing facility may elect to forego or loosely implement these security activities. Hence, the need for security drives how much a CIO is willing to pay for it and where it should be housed.

Maintaining extensive security systems on a small scale in an enterprise data center can be costly. Cloud providers, on the other hand, inherently monitor and capture detailed security data that would otherwise be prohibitively expensive in many ways. Microsoft, AWS, and the other cloud providers are likely challenged consistently and thus must maintain the highest security levels.

A key item for many CIOs is that the liability for many potential security breaches is offloaded when a cloud provider is engaged. In addition to physical security, universal updates are included as part of the service and can be addressed in mass scale. The fact that Jim left a door slightly ajar can’t happen in a cloud environment.

Certification of security compliance is a massive undertaking. For example, many cloud providers include FedRAMP (US Federal Risk and Management Program) certification as part of their offerings, whereas a local data center would need to expend significant time and resources to obtain an equivalent level of certification.

Goodbye Data Center; Hello Cloud

IT is just as dependent on systems as it is on people. Artificial intelligence and IoT haven’t usurped the need for people, and a great many jobs are necessary for systems to function. Further, many new positions are being created to transition and support cloud infrastructure.

Getting out of the physical data center business is a long-term key directive for many CIOs. As the various cloud offerings mature, this transition has become more compelling, and drivers for maintaining local data centers are diminishing.

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