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Private data centers still alive and kicking

Feb 21, 20184 mins
Cisco SystemsData CenterHybrid Cloud

Cisco's Global Cloud Index indicates public cloud services are growing rapidly, but so are private clouds.

data center - network server room - cloud computing
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Earlier this month, Cisco updated its Global Cloud Index (GCI), giving rise to a number of news stories that were filled with doom and gloom for corporate IT departments. (Note: Cisco is a client of ZK Research.)

For example, one of the articles stated that based on the GCI, cloud computing would virtually replace traditional data centers within three years. While it’s true public clouds are growing, private clouds are also increasing. It’s a multi-cloud era, as Cisco’s Kip Compton writes.

Traditional data centers are far from dead — they’re evolving

Did Cisco’s GCI indicate that “The Cloud” would kill traditional data centers? Not quite. It’s important to understand the metrics in the GCI and the definition of traditional or non-cloud data centers.

Something that is analogous is the transition that took place when VoIP emerged. One could have issued a headline that stated, “IP telephony to kill telecommunications.” Telecom evolved from TDM to IP, but businesses were able to put more phones in more places, so it actually made the overall market larger because VoIP let businesses do things TDM could not.

Hybrid clouds are here to stay

Looking at the below chart, the Cisco GCI states that by 2021, 92 percent of business-related workloads will be in a combination of public and private clouds, with traditional (or non-cloud) data centers shrinking to only 8 percent of workloads. Of that 92 percent, 57 percent will be in the public cloud and 35 percent in a private cloud.

Cisco Global Cloud Index cloud workloads Cisco

In this case, businesses aren’t ditching their traditional data centers — they’re evolving them into a private cloud. In fact, over the next decade, I expect to see the technology markets that enable private clouds, such as converged and hyper-converged infrastructure (HCI), flash storage, software-defined networking (SDN), and intent-based networking (IBN), lead the technology industry through another boom. The use of cloud will let organizations do things they could not do before.

I understand the transition to the cloud can be a scary thing for IT professionals, and there is a concern that if everything moves to the cloud, there’s no role for an IT staff. Again, this kind of thinking is flat out wrong. In fact, the IT department becomes even more important. Outside of very small companies, no organization is going to pick a single cloud provider for all their development and applications. It’s more likely that the norm, for the foreseeable future is a hybrid, multi-cloud. And the role of IT will be to help bring a higher level of agility to the infrastructure so developers can work faster and more efficiently.

Hybrid environments facilitate application agility

For example, a developer may choose to create an application in a public cloud but then run the production version in a private cloud because of privacy concerns or data sovereignty issues. In this case, IT needs to build a cloud environment where resources can seamlessly move between public and private clouds. This requires new technologies and orchestration capabilities from the network up through the virtualization and container tiers.

The Cisco survey also breaks down cloud usage by application type and confirms much of what I have been preaching for the past several years, which is many businesses will keep their systems of differentiation on premises. For example, the GCI shows that by 2021, about 50 percent of ERP, business applications, Internet of Things (IoT) deployments and analytics will be either non-cloud or in a private cloud.

cisco global cloud index gci apps Cisco

If you’re a CIO, business leader, investor or anyone who has a vested interest in the evolution of business technology, it’s critically important to understand the “cloud” has multiple meanings. It’s not the death of IT. Instead, it’s the thing that’s going to create an entirely new way of doing business and will make the overall addressable market for IT infrastructure and services so much bigger than it is today. Every compute revolution dating back to mainframes has done this, and the cloud will be no different.


Zeus Kerravala is the founder and principal analyst with ZK Research, and provides a mix of tactical advice to help his clients in the current business climate and long-term strategic advice. Kerravala provides research and advice to end-user IT and network managers, vendors of IT hardware, software and services and the financial community looking to invest in the companies that he covers.

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