Despite the undeniable growth of cloud services, many enterprises still operate their own data centers. This is according to a study provided by 451 Research. The firm discovered that 83 percent of North American enterprises still depend on their own data center. As surprising as this may sound, only 17 percent fully rely on cloud service providers.

The survey queried 1,200 senior IT professionals throughout various North American enterprise companies. In fact, it is still considered unusual for organizations to rent all of their storage, computing, and networking resources. Many analysts believe this will be the norm for a long time. There is just too much data that cannot be cost-effectively moved to the cloud. And, that isn’t going to change anytime soon. It goes without saying, businesses just don’t want to live without the data center.

Strong tools and expertise

As a result, organizations still have a need for the right tools and expertise to effectively manage their data center. Yet, it’s more than that. They need the expertise to help their data centers and the public cloud to communicate. Systems cannot exist on an island.

Despite many executives declaring their companies will move every one of their workloads to the cloud, in practice, that can kill their businesses. The reason why not every workload can be moved to the cloud is because there are some apps, which are archaic, such as a COBOL-based DB2 database managing inventory.

It can cost $5 million or more just to rewrite software in order to create the analog for this system in the cloud. Yet, while some cloud providers are offering linkage products, it is still expensive and economically unfeasible for some companies to move all of their traditional systems to the cloud.

Some enterprises are building new data centers

Believe it or not, there are enterprises building new data centers. One of the main reasons is the need for more capacity. With big data permeating our systems, companies need an increasing amount of computing power and storage.

Other reasons include disaster recovery and data center consolidation. IT departments are spending more time on disaster and recovery strategies in the event of a security breach or outage due to a natural disaster. As a result, companies are not necessarily cutting their data center budgets. This is especially true for those in the healthcare and finance industries, as the need for improved data security rises annually.

So, they are increasing their facility spending on items such as racks, cabinets, cabling and operating expenses. A data breach can cost a healthcare or finance organization millions or billions in losses. This is why they find their data centers imperative towards helping them to manage customer data, and to help keep them safe.

How enterprises are using the cloud and managed services

It’s not difficult for a company to outsource some services. To illustrate, a company might utilize an eVoice solution in order to ease the backlog of answering and managing incoming customer calls. Hiring a managed service provider, as a virtual concierge of sorts, can help enterprises focus more on their core business functions and market offerings. The same is true of outsourcing email, web apps, and any other applications which are not time sensitive. Since many enterprise applications are highly customized, this means they don’t always make the cut in terms of transferring their functionality to the cloud. This explains why many enterprise inventory tracking and accounting systems are not on the public cloud. Companies still want to have full control of software they deem profitable.

Plus, many times, cloud service providers don’t even provide tours of data centers. So, C-level executives are apprehensive about turning over their most mission-critical applications and systems.

Hardware costs going down

Another reason the data center is not dead is because the cost of no-name server, networking and storage equipment has been going down. With the help of services, such as the Facebook-supported Open Compute Project, companies can design specifications for data center hardware which anyone can use. This helps when utilizing less-expensive, no-name hardware.

Enterprises aren’t as compelled to only purchase hardware from big-name brands such as IBM, Cisco, HP, or Dell. Especially when there are so many options available to them today. Even if cloud service providers call traditional tech executives, “server huggers,” it has not driven a complete and comprehensive move to the cloud.

katrina-headshotpicKatrina Manning is a published author and content marketing specialist with BuildNicheLinks. Over the past eight years, she has written thousands of articles in the business, tech, and lifestyle genres. In her free time, Katrina enjoys volunteering, experimenting with new recipes, traveling, playing with her cat and looking at Instagram pics.

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