However, the cloud has changed the scenario today, and managing a private data center doesn’t make sense for many organizations. Organizations are realising benefits of moving towards cloud, MSPs or colocations service providers, and this migration is reducing the demand for traditional corporate owned data centers.
Kapil Mahajan, Group CIO & Digital Transformation Officer, Safexpress believes that in today’s world, being cloud native is an inevitable trend that has reshaped how enterprises pursue their digital transformation journey, and this is making companies shift more workloads onto the cloud.
“Cloud has been a great enabler because it provides native ability to fuel transformation, innovation, and agility in any business. And it’s been able to do that by accelerating transformation, and making companies more competitive and nimble. It also allows you the flexibility to parallelly do experiments, succeed and fail faster, with minimal cost implication”
Rishabh Garg, CTO, U GRO Capital believes that managed, or corporate-owned data centers may thrive for specific cases like meeting local regulations, additional DR, and particular workloads. But he sees a considerable reduction in the spending on managed or corporate data centers. “They may serve as an extension of large cloud providers”.
According to Vishnu Nadella, VP – IT, Gupshup, corporate-owned Data centres are here to stay, at least in the near term. But they will most likely reduce in number – by over 60 percent – which is a rough estimate.
“We continue to see several large enterprises – for example, banks with high scale workloads with global presence, who have static and various regulated, customised workloads – continuing to invest and maintain their own dedicated data centres. Some of the deterrents for these large enterprises to fully move to the public cloud include possible complexities with operations, cost, ROI and availability,” said Nadella.
Senthil Kumar AVP–Technology, GlobalLogic also agreed that corporate-owned data centers are unlikely to disappear in the coming future even though enterprises are aggressively moving their numerous business processes to cloud.
The reason for that is data centers require huge investments from enterprises to set up. It is very unlikely that the enterprises would let their invested capital go to waste.
“Enterprises are trying to make optimum use of these data centers. There are still business processes that are mission critical and require greater oversight and control that will remain within corporate-owned data centers. Moreover, these data centers offer the ability to enhance operations, improve redundancy and flexibility, deliver higher availability and better use of IT assets, and enable innovation,” added Kumar.
Adding to the same, Rahul Mahajan, CTO, Nagarro said, while it will be difficult for organizations to move away from the already established processes and compliances (due to investments made in DCs), the cloud can provide an extension to their business functionalities whenever required.
“And this is where hybrid solutions such as Google Anthos, Azure Arc, and EKS Anywhere are coming into the scene. The whole idea of having cloud enablement is to help a business grow leaps and bounds rather than impacting the business and thus cloud providers and integrators like us are keen to work on the solutions that resonate well with on-premises and cloud at the same time,” he maintained.
Data centres are surely here to stay. However, many organizations have already flocked to the cloud and more might do so in the coming years, avers Suresh Khemka, Head of Platform Engineering & Infrastructure, Apna.
“Companies have realized the cloud’s vast potential such as data modernization, high security, effective fund management and optimum efficiency. I believe this growth will continue even as the economy stabilizes. Organizations are likely to make more investments in digital transformation. This entire debate between cloud and data centres typically revolves around local versus remote hosting. In-house data centres might be losing their grip due to the emergence of the cloud but remote data centres are here to stay and will continue to host cloud environments as well,” Khemka said.
While data center industry as a whole is poised to grow multifold as all the data is being stored there, it is just that organizations themselves won’t be willing to operate these data centers and will rely either on a CSP or co-location provider for the same.