The Role of Cloud in the Datacentre Revolution

By Mike Gallagher, Business Development Director at Claranet

The datacentre industry has been undergoing transformation for some time now, and the global pandemic has delivered a whole new wave of disruption. Organisations are under increasing pressure to cut costs and reduce their real estate footprint, bringing on-premises datacentres into the spotlight.

In addition to this, ongoing hardware supply chain issues are impacting both existing datacentres and new builds. Experts have warned that the global semiconductor shortage could stretch to 2023, and organisations currently face a 52-week lead time for many other datacentre components.

Gartner predicts that by 2025, 80% of enterprises will shut down their traditional centres, with 10% of organisations having already done so to increase efficiency. So, what does the future datacentre landscape look like? The shift in working patterns over the last two years has prompted organisations to embrace cloud-enabled solutions – including data management. Cloud-based services offer a sustainable, long-term solution which mitigates hardware issues and drives operational and cost efficiencies.

Building infrastructure stability

Research from Information Technology Intelligence Corp (ITIC) reveals that 44% of organisations report that a single hour of server downtime now costs from $1 million to over $5 million, excluding any legal fees, fines, or penalties. A 73% majority cited security as the number one cause of unplanned downtime, with 64% saying that human error caused server outages. These outages not only have financial implications but can lead to reputational damage in the case of data breaches.

Businesses must consider the stability of their on-premises datacentres, but the necessary server updates – including the multiple backup servers needed in case of failure – can be costly, and the technology does not have a long working life. According to IDC research, server performance erodes at an annual average of 14%, meaning that after five years, performance has diminished by 40%. Therefore, it is not just the initial installation that businesses must account for, but the time and resource that will need to be dedicated to maintenance and repairs.

Moving to the cloud enables businesses to transition from extended disaster recovery times to true business continuity. Organisations will no longer have to worry about their data resiliency, with the cloud provider supporting data replication and managing the storage and security of those backups.

Embracing continual transformation

Following a period of extreme uncertainty and change, business agility is at the front of leaders’ minds. To stay competitive, organisations must keep pace with change, and this involves meeting the demands of a hybrid workforce. A recent HP Wolf Security Rebellions & Rejections report reveals that over three-quarters (76%) of IT teams admit security took a backseat to business continuity during the pandemic, while 91% felt pressure to compromise security for business continuity. The flexible working model is here to stay, and businesses must work out how to prioritise security while ensuring that remote employees have access to the data they need to do their best work.

Reduced reliance on in-house datacentres can boost company-wide agility and innovation, accelerating the process of testing and deploying new software applications. With cloud solutions, businesses can transform at speed; teams are free to ‘fail fast’ and ‘fail safe’, welcoming mistakes as part of the development process. Cloud-based organisations also have more freedom when it comes to scalability, automatically adjusting data storage capabilities to meet demand and avoid over provisioning at peak times.

Supercharging sustainability

Another key driver for businesses to reduce their datacentre footprint is minimising environmental impact. As it stands, datacentre power consumption could devour 20% of UK generation in the next few years – nearly the equivalent of the entire global airline industry. The real estate required to house and store individual on-premises systems has a significant impact on a company’s electricity usage, and energy-saving technology is not often accessible for smaller businesses.

Although cloud technology is a still a long way off being environmentally friendly, mass-migration will ultimately lead to a huge reduction in emissions and e-waste, with organisations paying for the exact amount of processing power they need. And modern cloud infrastructures also offer increased transparency and tracking of applications’ power and carbon consumption, which will be vital in the race to reach to net zero.

Not only is this crucial to meeting the goals of the Paris Agreement but demonstrating ESG credentials is becoming increasingly important in appealing to key stakeholders. With many customers choosing organisations based on their sustainability ethos, and investors using climate change markers to evaluate non-financial performance, striving to fulfil environmental commitments is not only an ethical decision, but a profitable one.

By using cloud organisations can leverage the sustainability capability of the hyperscale’s carbon neutral / negative strategies. Cloud also gives the transparency of consumption, which is difficult to achieve on premises, and enables power to be consumed only when required, scaling up and down as demand dictates.

Making the move

Though some organisations are still reluctant to make the move from on-premises infrastructure, the mounting challenges for the datacentre and hardware supply chain mean that those who delay this transformation risk being left behind. Migrating to cloud puts companies’ datacentre infrastructure in the hands of dedicated professionals, with the clout and purchasing power needed to manage supply chain shortages more flexibly.

For those who are ready to liberate their organisation from on-premises datacentres, there are a number of key things to consider. They must have a good handle on their desired outcomes and the data needed to formulate a strategy for a sustainable transition, and they must also ensure that they have the required cloud literacy to implement that strategy.

This can be a daunting task but, with a robust plan in place – and the right partner – businesses can modernise at the pace that’s right for them, to ensure that the expected benefits of cloud are fully realised.