The cloud dominates but corporate IT resists

The appearance of the cloud in IT architecture has brought about a profound change in the distribution and consumption models of hardware and software for almost two decades.

19 August 2021

The deployment of traditional IT models did not offer the availability and scalability required by new business models, in many cases due to high costs, technical difficulties or excessive start-up time.

Today we are talking about  public clouds  to differentiate them from corporate IT infrastructures: the latter would be the  private clouds  that companies install on premise or with colocation services, and that they manage in a similar way to the public cloud (with virtual servers and containers). The public cloud is the service offering of hyperscale providers such as AWS, Alibaba Cloud, MS Azure, Google Cloud or IBM Cloud. 

 

The focus of IT infrastructure today is the how and not the where

IDC recently launched a more accurate way of measuring the dimension that the transition from the traditional IT infrastructure model to the cloud has acquired in recent years. This new tracking method (IDC Worldwide Quarterly Enterprise Infrastructure) is based on the combined billing of the sale of servers and storage, and divides the market of buyers of that infrastructure according to the platform they use and whether or not it is shared:  

Dedicated infrastructure, not in the cloud   

(on premise or in a colocation service)

Shared cloud infrastructure

(public clouds)

Dedicated cloud infrastructure

(AWS Outposts, MS Azure Stack or Google Anthos) 

In this new classification there are nuances that make the results relevant. IDC is now focused on how  it performs computation and storage, leaving in a secondary position  the place  where it is made. In addition, the numbers it provides are related to what is invested in IT infrastructure by public clouds, without differentiating between cloud providers, governments or companies. In this way, it measures the amount of investment in servers from large providers and not the value of the services they sell.  

 

Dedicated infrastructure decreases in weight, albeit slowly 

Despite the benefits that the cloud service model brings, investment in own equipment for on-premises infrastructure or in a colocation service is still strongly present, in an environment close to 50% of total spending in 2020. The forecast of IDC is to decline to about 34% in 2025, with a decline that has been accelerated by the pandemic.  

 

idc 2021 cloud

Source: IDC

 

In the graph we also see the growing trend of shared cloud infrastructure (what we call public cloud). Next year will already be the predominant space where computing and storage will be housed, and it will continue to increase in weight in the following years. Shared and dedicated cloud together is growing at a compound annual growth rate of 11.3%. 

In the case of dedicated infrastructure (Non-Cloud & Dedicated) it still represents one third of the equipment sales market in 2025. It is remarkable that companies maintain their own servers despite the growing weight of the cloud. One of the reasons given by specialists is that in many corporations, performance / price (obtained with each technological renovation) has more weight in the decision than the scalability of operations.  

Beyond specific reasons for keeping your own IT infrastructure (such as data governance, for example) there are also new connectivity needs that support the option of maintaining corporate teams. In the latter case, it is the connections to the cloud that lead companies to install their own interconnection nodes in specialized data centers . In these facilities with colocation services there are more advantageous options to connect through a  cross-connect  with public clouds present in the data center, or through   interconnection platforms managed by the colocation provider itself, which offer more bandwidth options.