With the number of businesses running their IT infrastructure entirely in the Cloud expected to be in the majority by 2018, in-office network servers – the bastion of business operations for the past two decades – look doomed to become yesterday’s technology.
According to a recent survey of IT professionals worldwide carried out by 451 Research, 60 per cent expect to be running operations entirely on the Cloud two years from now. Although just a forecast, that rise of nearly 20 per cent from the number using Cloud-only systems today is significant. As we stand, on-premises products are still in the majority. But once the scales tip in the other direction, the slide could be rapid.
Another report in America from Forrester Research paints a picture of profits for Cloud companies soaring whilst ‘legacy’ enterprise IT vendors have seen a steady decline for the past decade. Producers of network hardware and software just cannot compete with cloud-based Software-as-a-Service (SaaS) and Infrastructure-as-a-Service (IaaS) suppliers who offer to host and manage your IT for minimal capital outlay.
Some experts are predicting competition from the Cloud could start to force traditional big-name enterprise server manufacturers – the likes of Dell, Oracle, IBM – out of the market altogether.
All of this raises the prospect of enterprise hardware becoming obsolete. The danger of this is not that the systems themselves become out-dated, but that the crucial data on them is in a form no longer compatible with the new technologies that have overtaken them. For businesses operating on their own physical systems, it would like being trapped in a technological cul-de-sac, with no option to move forward without going backwards and starting all over again.
In practice, no one is expecting in-premises enterprise networks to be cut adrift over night. Although changing rapidly, just under two-thirds of businesses still use them, which will keep the vendors in the market for some time yet. In addition, a niche industry for ‘transition’ hardware and software to growing up to mitigate for the fact that it is not that straightforward to migrate existing networks onto the Cloud. Many businesses are employing ‘hybrid’ models, which means they launch new system technologies on the Cloud, but keep existing legacy operations running on the old servers, until they are phased out naturally.
What should businesses do? It is not yet time to panic about your on-premises servers being more hindrance than help. But the Cloud is here and, looking long-term, hosted IT is the direction the world is heading. It is certainly worth considering for any new IT investment, be it replacing existing systems or launching new. The Forrester report advises decision makers to embrace innovation but ultimately, as with any business decision, make the choice that fits with your business needs.
If you are thinking of switching your IT infrastructure or would like some advice on how hosted IT services would impact on your business, Cloud4’s friendly team of consultants would be delighted to speak to you.