Public Cloud In, Virtualization Out by 2019
Enterprises are leaving behind virtualization and rapidly advancing toward internal and hosted private clouds as organizations drive toward more innovation, more efficient infrastructures, and more business-oriented IT departments.
By 2019, 42 percent of businesses will rely on on-premise plus public cloud (hybrid) or fully public cloud, compared with 12 percent in 2015, according to Saugatuck Technology's recently released Cloud Infrastructure Survey.
Contrast that with today's traditional IT infrastructure – on-premise with limited virtualization or on-premise/virtualized – which declines to 18 percent by 2019 from 72 percent this year, the report found. Within five years, 40 percent of those surveyed predict they will use either internal private cloud or hosted private cloud; although most organizations using this infrastructure used internal private clouds in 2015, by 2019 the percent of enterprises expecting to use these deployments are almost equal, Saugatuck said.
Companies are transitioning primarily to cut infrastructure costs, improve service levels, and enhance security, Alex Bakker, research director at Saugatuck Technology said in an interview.
"A lot of these old systems cost a lot to keep them running. It's not always intuitive that old systems have high [total cost of ownership] but you have staffing issues, especially as the system gets much older – things like COBOL workloads. It's hard to find people with COBOL experience now," he added. "Many old systems don't really run well in virtual environments or are not easy to scale. There's just so much customized software in large enterprises. Sometimes it gets very expensive to maintain."
Those expenses extend into security, once considered a reason enterprises chose not to adopt cloud. In 2013, for example, 26 percent of enterprise executives considered "general security risks" one of the key challenges to cloud adoption, a KPMG study that year found. But after headline-making security breaches from enterprises such as Target, JP Morgan and Primera Blue Cross, business and IT executives are questioning the fortitude of internal data centers and networks, said Bakker. Many now are considering cloud and the resources dedicated providers can deliver, he said. In addition, organizations can find it difficult to recruit well-qualified security personnel, especially in older infrastructure environments, Bakker said.
"Organizations have begun to realize – we've had enough breaches over past couple of months, years – their existing environments are not the shining beacons of security they exactly hoped they should be. When you look at a lot of on-premise systems out there, they're not that secure," he said. "They're not that well-maintained. Bugs in SSL are hard to patch because it's hard to even estimate how many systems are affected. The more customized these systems are, the more insecure they are."
Moving to the cloud should reduce costs, in part, through improved security and maintenance. It also reduces end-users' rogue IT implementations and empowers IT departments to spend less time on break/fix, maintenance, and time-consuming chores and more hours on business-focused innovations, said Bakker. In fact, the CIO – and the IT department – are becoming more important to the business, according to 64 percent of chief information officers polled in the State of the CIO 2015. Only 18 percent said their organization now views the IT department as a cost center, the survey said.
"Changing the infrastructure and changing the profile of the IT department go hand in hand over the next four years," said Bakker.