A ‘Dear John’ to the data centre

Dear Data Centre,

It’s not you it’s me. I’ve changed. We want different things.

We've been together a long time, but recently it's started to feel a bit one-sided. I keep putting in the time, the data and the money, but it’s all give and no take. I've started to work late, spending more time with cloud vendors and trotting out the old clichés, “We've grown apart, I’ve got needs y’know, and a guy just needs more scalability and elasticity”. We're still holding it together but I've started to wonder if this is just habit, or is it time to cut the (RoI) ties?'

As more and more services move to the cloud, IT is swiftly looking more like a utility. Cloud adoption rates are creeping up and Gartner suggests that cloud computing will be a $207 billion industry by 20161. Small businesses and start-ups are often cloud or as-a-service first when it comes to business applications or storage. Many large enterprises are well on their way with mapping out the transition.

When so many services and applications can be acquired on-demand, it seems absurd to invest so much in owned infrastructure, which for the most part will never work at the limits of its capacity. For those looking at new solutions the costs and complexity of planning, designing, building and running data centres is already weighing the decision in favour of cloud or outsourced propositions.

However, CIOs around the world have substantial investments tied up in owned data centres and many continue to pour in funds year-on-year. So, how do these companies know when its time to hand in the data centre towel?

After such a significant investment, IT departments often struggle to attain and measure the point where they have achieved a satisfactory return on their investment. So they continue to squeeze every last drop of productivity from their DC. Without correct measurement of total cost of ownership, the decision to cut ties will be finger-in-the-air speculation rather than a calculated decision.

Many CIOs are gradually reducing the size and scale of their DC investment. The goal for many is to get to the point where it’s just a case of keeping the lights on. Advances in cloud should see more and more businesses reaching this point and perhaps even turning the lights off and handing in the keys. However will all CIOs break up with the data centre completely?

For some, the answer for the foreseeable future is no. For companies that rely heavily on telematics, or for high-speed trading floors, moving services into the cloud will not allow for the consistently high demand and speed required.

This is also a question of trust, when your business, customers and the funds and fates of others depend so utterly on the speed of data it’s hard to believe that a service provider could care as much about your data as you do. Whilst service levels are preserved by SLAs the ownership and responsibility for BAU still remains firmly in the hands of the business. Cloud services and the management of that risk still have a long way to go before many CIOs have the faith to let go.

For those in the financial services industry, data protection may hold them back from the cloud for many years to come. Protection of customer information is enshrined in legislation, creating certain restrictions over what must be retained on company grounds. Legislation is unlikely to move at the lightning speed with which the industry has so whilst those cogs grind on owned data centres will remain a staple in the financial services industry.
While some other CIOs may remain in a perfectly happy DC marriage for the foreseeable future, the divorce trend continues. Cloud speed, security and performance are improving and I think it's time we appraised our relationship. Should we really stay together?

Yours faithfully,
The CIO

1 http://www.gartner.com/newsroom/id/2074815