Has IT's default setting switched from data center to cloud?

Cloud has clearly hit the main stage in enterprise IT, but is it replacing on-premises as the go-to environment for apps and infrastructure? The answer is nuanced.
Written by Conner Forrest, Contributor
Image: iStockphoto/vladru

It's clear that the cloud is no longer the unknown technology that it was a few years ago. In fact, cloud infrastructure and services are table stakes in some organizations and verticals.

Advances in security, compliance, uptime, compute options, and more have made the cloud an attractive option for even the most demanding enterprises. But, has the cloud come far enough to take the place of on-premises data centers as the default option for IT projects?

The answer isn't simple, and the nuance starts with the age and culture of the company. When it comes to tech startups, "the default is certainly cloud," according to Gartner analyst Lydia Leong. When dealing with companies that already have infrastructure in place, though, it comes down to culture, leadership preferences, and other factors, she said.

SEE: Cloud computing policy template (Tech Pro Research)

Some companies become cloud-first, Leong said, leaning on the cloud unless there is a really good business reason not to. Some simply add cloud technologies to their IT portfolio, while others see the cloud as a last resort, when there are no other good options. "The faster-paced the business and the more forward-thinking the CIO, the more likely it is that the company will have a greater bias towards cloud," Leong said.

The question of cloud-first also must take into account which cloud migration option fits the particular aspect of enterprise IT a company is considering moving. According to Forrester Research analyst Dave Bartoletti, one of the first considerations is cloud applications -- whether a company will upgrade software or move to a SaaS product. About four years ago, he said, a shift began toward cloud applications so that, now, most of the businesses he works with are cloud-first or cloud-only when it comes to apps.

"I think we're getting very close to cloud-first mentality in most mid-sized and large enterprises, where you have to make a strong business case for why you would deploy something on-prem when there are so many options for the cloud," Bartoletti said.

When it comes to modernizing business applications, 68 percent of the businesses surveyed by Forrester said their number-one priority was migrating those applications to the cloud. Cloud migration used to be much more difficult, but there are better migration tools and more options for businesses today, Bartoletti said.

The data center, however, is a different story. On-premises data center investments continue to decline, and have been doing so for the past few years, Bartoletti said, but they're still in transition.

"Today, about 40 percent of infrastructure is still running in transition, on-premises mode," Bartoletti said. "That's going to decline about 10 percent over the three to four years."

Those numbers are fairly close to the predictions of 451 Research as well. "In two years, the majority of organizations' workloads will be running in some type of cloud environment -- 37 percent public cloud (IaaS and SaaS) and 23 percent private cloud (on-premises and hosted)," said Melanie Posey, an analyst with the firm.

SEE: How to develop a cloud-first architecture and strategy (TechRepublic)

When it comes to data centers, there is a balance between getting the most out of your current infrastructure, while also modernizing your infrastructure so you have better access to next-generation technologies like containers, Bartoletti said.

Carl Brooks, also of 451 Research, said that development in the cloud has at least become a "default consideration," if not a default choice. But, the path can shift.

"It is routine to pilot development on public clouds, but very often that effort then returns to the enterprise IT shop; just as often it will be expanded into public cloud environments or sent into the hands of managed infrastructure providers that host a cloud environment for the enterprise," Brooks said. "These outcomes are roughly equal right now, and the deciding factor is arbitrary, based on the business needs."

Right now, Brooks said, companies still have a lot of physical machines, so there is no "headlong rush into public cloud." Instead, it's "more like a leisurely stroll, as the need and benefits are perceived," he said. Enterprises still want the control involved with choosing the best option for each individual workload.

When asked what needs to change in order for most companies to be all-in on the cloud, Forrester's Bartoletti said that businesses need to shift their thinking away from waiting until it's completely secure for all of their workloads before moving to the cloud. If you wait for someone else to make it secure for you, Bartoletti said, you're too late.

One example Bartoletti gave was Capital One in banking. The company decided that the cloud was a good investment for their future, so they began working with regulators to make the cloud secure for their workloads. And, they're first in many ways in their market, Bartoletti said.

In addition to simply modernizing infrastructure and applications, pursuing the cloud can also help companies attract younger developers and project managers fresh out of school. There's fierce competition for tech talent, and these would-be employees "expect the cloud," Bartoletti said. Companies will need those environments to compete for that talent.

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