The 2016 Uptime Institute Data Center Industry Survey reveals that 50% of senior enterprise IT executives expect the majority of IT workloads to reside off-premise in cloud or colocation sites in the future. Of those respondents 70% expect that shift to occur by 2020, and 23% expect the shift will happen by next year.
“The shift is occurring, and our findings show an industry in a state of flux,” said Matt Stansberry, Director of Content and Publications for Uptime Institute. “We saw the trends lining up beginning with our 2013 survey, noting that enterprise IT teams were not effectively communicating data center cost and performance metrics to their C-level executives. The business demand for agility and cost transparency has driven workloads to the public cloud. Our counsel to data center and IT professionals is to become more effective at articulating and showcasing their value to the business.”
Uptime Institute Survey findings since 2013 have shown that the majority of respondents report some percentage of their IT portfolio resides outside of their enterprise-owned data centers, either in the cloud or some form of off-premise computing.
But the annual Data Center Industry Survey takes the pulse of the legacy, on-premise enterprise IT and data center operations teams, many of which are not motivated or inclined to move to cloud.
Previous results likely underrepresented the shift to cloud computing, as business units deployed in the cloud without IT Operations or Data Center personnel involvement. IT as a whole needs to move away from its current role as a slow-moving centralized provider, and instead direct corporate governance across the various business lines – evaluating security, costs, and performance of IT for the business.
Legacy IT departments are shrinking
Additionally, legacy enterprise IT groups need to develop clearer messages to the business to articulate their value and efficacy.
The survey also found that many legacy enterprise IT departments are shrinking, due to budget pressures, IT hardware advances and the outsourcing of workloads to cloud and colocation providers.
For the last five years, approximately 50% of enterprise IT departments have reported flat or shrinking of overall budgets (combined spend for on-premise technology infrastructure of IT and data center facilities). This figure has remained steady in each Uptime Institute survey. Some enterprise IT organizations are receiving modest budget increases, but fewer than 10% are realizing significant growth.
A little more than half (55%) of enterprise-managed server footprints are flat or shrinking. Colocation providers had experienced tremendous growth in the last 5 years, but shrinking enterprise IT deployments are now impacting capital project cycles across the board.
Fifty percent of respondents are satisfied or very satisfied with their primary provider, while 7% said they were dissatisfied or very dissatisfied.
In 2015, enterprise IT organizations reported slightly more outages in their enterprise-owned sites over a 2-year period than their colocation service providers.
Outsourcing model is not the answer to all problems
Forty percent of enterprise respondents are paying more for colocation contracts than initially planned. Nearly 1/3 experiences an outage at a colocation vendor site.
Over 60% said the penalty clause in their Service Level Agreement (SLA) would not adequately offset the cost of that outage to the business.
Enterprise organizations paying a premium for a 3rd party to deliver data center capacity should hold service providers to higher standards. There is room for improvement in vetting, negotiating and managing those relationships.
The Uptime Institute survey findings show that competition from service providers threatens the relevance or very existence of enterprise IT teams. Leading enterprise IT organizations will be most successful by driving efficiency and transparency in their own assets, and providing corporate governance over security, costs, efficiency and performance of Service Providers for end users.