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Private Cloud: I'm Not Quite Dead Yet

Level 9

The reports of my death are greatly exaggerated - The On Premises Data Center Mark Twain

As I mentioned in my previous post, the hype cycle has the on-premises data center dead to rights. Public cloud is the future and there’s no turning back. When you step back and investigate the private cloud space, you’d be surprised.

When the order comes down to move to the public cloud, sometimes you discover the application or workload isn’t suitable for migration. How many times have you been in an environment where an important line-of-business application was written by an employee who left 15 years ago and has no documentation. Is the application even running on an operating system one of the public cloud providers supports? While proper planning and refactoring can provide a path to move your application to the cloud, occasionally you’ll run into unavoidable physical limitations. In manufacturing environments, often you’ll find the need for a custom interface for a machine or a USB license dongle for an application to function.

Sometimes applications can’t move to the cloud despite planning. But not everyone takes the time to plan their cloud migrations. Failure to plan leads to many issues with cloud adoption (which I’ll discuss in my next post). What about your connectivity to the internet and cloud? Whether it’s uptime or bandwidth, the network can prove to be a cloud roadblock. When these migrations fail, where does the workload go? Back to the on-premises data center!

Looking at purchasing new data center hardware or moving to the cloud often includes decision-makers outside of the IT department. While we will leave the deep fiscal details for the financial experts, Chief Financial Officers and business leaders often weigh the benefits of the Operating Expenditure versus Capital Expenditures, commonly referred to as OpEx vs. CapEx. While the ability to quickly scale your cloud resources up and down based on demand might be a blessing to an application administrator, the variations on cost accompanying it can prove to be difficult for the accounting department. The ability to make a one-time purchase every three to five years and amortize the cost over those years is a tried-and-true financial tactic.

Speaking of finances, the fiscal performance of hardware vendors must certainly be a bellwether of cloud adoption. Sales of data center hardware has to be falling with the ever-growing adoption of public cloud, right? Wrong. As has been announced over the past year, vendors such as Dell Technologies, Pure Storage, and Lenovo report record earnings and growth. In May 2019, Dell Technologies announced 2% growth year over year. May also brought a revenue announcement from Lenovo of 12.5% growth year over year. August of 2019 saw Pure Storage announce a whopping 28% year over year revenue growth. These companies are just a small example. Clearly physical data center hardware is still in high demand.

Looking at many factors, it’s easy to say the on-premises data center is far from dead. Continuing the “Battle of the Clouds” series, we’ll dive into why “just put it in the cloud” isn’t always the best solution. 

9 Comments
Level 14

Thanks for the article...like I have said before, on premise/hybrid is going to be around for a lot longer than people think, I believe.

Level 12

"Sales of data center hardware has to be falling with the ever-growing adoption of public cloud, right?"

Maybe I'm not clear on how the public cloud works, but my understanding is that it's a bunch of data centers so data storage and processing are distributed. If so, I would expect growing adoption of cloud computing to increase data center hardware sales to provide the needed capacity.

MVP
MVP

Thanks for the article.

Level 13

Thanks for the article.

Level 12

Nice one Paul!

Level 12

I'm getting a little bit over the front of my ski's on this one, so take this with a grain of salt...

My understanding is that cloud providers (at least the big 3) are working diligently to build and source their own components. If you look back at the acquisitions Amazon has made, they want to try and move away from intel, towards their own chips. From a scale perspective, it just makes sense for the big boys to do this. If they can own the entire stack, customized to their offering, invest their R&D dollars in their own org, rather than giving it to a chip maker... it makes some sense.

SO are some of the cloud providers buying from Dell and supermicro and ....  probably. But it's also obvious that they're looking to build their own pieces as a competitive advantage.

Level 13

Ditto.  Good job

MVP
MVP

There's always a lot of considerations when moving technologies. You make good points to consider. It's surprising to me how many times major decisions like this are made without all of the consideration that really should take place. I'm sure there are a lot of organizations that made a commitment to completely move to the cloud and still have a data center due to some of the points you make. There is a big difference between a good idea and good business practice.

Level 12

thanks for the post