Abstract: Today’s enterprise networks have evolved beyond traditional perimeter environments, as customer, user, and supplier engagement continue to increase at changing digital touchpoints. The demand for enterprise data centers is now envisioned as not just physical facilities but as solutions focused on agility, scalability, efficiency, collaboration, security, reduced capital expenditure, and compliance. This is where cloud computing comes into play for businesses.
Enterprise networks today go beyond traditional perimeter environments, as engagement from customers, users, and suppliers is rising across ever-changing digital touchpoints. The demand for enterprise data centers is no longer viewed as just physical infrastructure but revolves around agility, scale, efficiency, collaboration, security, reduced capital expenditures, and compliance. This is where cloud computing is applied in enterprises.
IT consultancy firm 451 Research highlights this shift, estimating that in 2015, about 80% of global data center space (by square footage) belonged to enterprises. By 2020, it is expected to fall below 75% due to workloads migrating from enterprise-owned sites to cloud computing and co-located facilities.
Cloud computing’s penetration into the data center sector has not yet reached an exponential level but has instead seen steady year-on-year growth. However, it brings disruptive potential for the data center ecosystem in terms of build and service delivery. Research from IT research firm Gartner confirms this trend, showing that in 2018, India’s public cloud market revenue reached $2.5 billion, a 37% increase from $1.8 billion in 2017. A significant portion of this spending will be directed towards Infrastructure as a Service (IaaS), which is expected to grow by $1 billion (46%) compared to the previous year.
Cloud computing models are often seen as a means to reduce data center-level processing, but this is not the case. According to IDC’s 2017 CloudView survey, more than 40% of respondents indicated they would evaluate running big data projects on private clouds within the next two years. IDC predicts double-digit growth in investments for public cloud, off-premise, and on-premise private clouds. By 2021, the compound annual growth rate (CAGR) for external cloud IT infrastructure is expected to reach 12%.
Clearly, hybrid and multi-cloud adoption is the optimal path for many organizations. Such architectures rely on internal data centers, private clouds, and leverage the best utilization of public cloud-based infrastructure and Software as a Service (SaaS) for scalable service delivery.
End-to-End Benefits
Cloud computing is a key driver in the evolution of enterprise IT teams toward higher-performing functions.
Cost savings are the primary reason enterprise leaders and IT teams adopt cloud computing. However, it is crucial to consider not only this aspect but also improvements such as enhanced IT flexibility, increased employee productivity, and improved collaboration.
For most cloud adopters, savings extend beyond hardware and software costs. The real savings come in maintenance and support. The centralized maintenance model of cloud computing drastically reduces the need for internal support staff, meaning reductions in headcount, recruitment, retention, and skills training costs. Most cloud users typically repurpose internal IT skills for high-value business activities. In terms of data center facilities, economies of scale allow users to benefit from the favorable base pricing of cloud providers in areas such as real estate, power, and cooling.
From a technology adoption perspective, improving IT flexibility might be the most notable benefit. In this area, banking and finance, as well as telecommunications, are leaders in using cloud computing to achieve faster time-to-market strategies. These highly competitive vertical industries need the latest hardware and software to rapidly launch products and services—a clear advantage of cloud computing. Rapid configuration, scalability, and reduced license dependencies ensure previously unmatched on-demand functionality. As spending decreases, the flexible cloud computing model enables the delivery of lower-priced products that meet rapidly changing customer demands.
Compared to traditional technology deployments, outcome-based deployments are a key part of cloud computing strategies. These methods improve employee mobility. Better version control and improved information discovery enhance employee collaboration and productivity.
The Road Ahead
Cloud computing’s groundbreaking potential will lead to a massive transformation in the data center market. Gartner estimates that by 2022, over $1.3 trillion in spending will be directly or indirectly affected by cloud computing migration.
Developments such as the Internet of Things (IoT), Industrial IoT (IIoT), Artificial Intelligence (AI), event-driven computing models, and upcoming smart applications based on 5G networks will drive the shift toward more radical data centers and cloud computing.
A unique feature of these future architectures will be the fundamental evolution of existing hybrid cloud models. These highly flexible, vendor-neutral workloads will span multiple public and private cloud architectures. Seamless centralized management will become a significant characteristic of these responsive, autonomous models. Many of these public and private clouds are likely to be hosted at geographically distant locations from corporate data centers and may sometimes be disconnected entirely.
For cloud computing enterprises, data center implementers, professionals, and service providers, interesting times lie ahead. Location, infrastructure, and technical collaborators, adopting tailored strategies, will reap significant rewards in the future. In power management, cloud providers will leverage advanced technologies at the rack and CPU levels. Cooling technologies will also witness similar paradigm shifts, introducing more eco-friendly, cost-effective, high-quality cloud computing products.