Do All IT Data & Analytics Opportunities Live in the Cloud Now?
Cloud computing has sparked a revolution in IT. Edge computing, serverless architecture, containers, and highly abstracted microservices have the collective effect of taking on-premises data assets and scattering them about the digital ether.
As businesses move further towards cloud-based services and infrastructure, the question arises: Will IT data and analytics migrate completely to the cloud within the foreseeable future?
The answer to this question will have a profound impact; not only for how IT tackles internal problems, such as how to reduce incident volume, but also for how IT relates to the enterprise as a whole. As computing services become more distributed, the role of the corporate data center becomes much more complex. For IT to commit wholly to cloud-based analytics, leaders must be able to integrate data across a wide spectrum of sources, including legacy data center functions.
Inevitably, IT leaders must keep one foot on the ground, even as more services and infrastructure migrates to the cloud. Even if traditional on-site computing and services hosting are phased out completely, it will be a slow death. That, coupled with the fact that cloud architectures are becoming increasingly diversified and fragmented, suggests the true challenge IT must face: how to consolidate data for analysis across all sources, agnostic of where that data is hosted.
Traditional on-premises services far from gone yet
Cloud services have undeniably had a huge impact on enterprise IT — but just how huge? A 2018 IDG survey found that 73% of organizations have at least one cloud-based application or a portion of their infrastructure hosted on the cloud. The survey also revealed that the average organization’s cloud budget grew from $1.62 million in 2016 to $2.2 million only two years later.
Furthermore, 38% of IT department respondents said they feel pressure from the C-suite to migrate completely to the cloud. Cloud-based services simply offer too many money-saving advantages that business leaders don’t want to pass up: limited maintenance, constantly upgraded services, go-anywhere convenience, flexible pricing models, built-in security, et al.
The steady march away from on-premises storage and hosting has prompted some industry thought leaders to compose a eulogy for non-cloud computing. In “The Data Center Is Dead,” Gartner famously projected last year that the number of enterprises that shut down traditional data centers would explode from 10% to 80% within seven years.
Gartner’s prediction may prove to be right, but their own research on the current state of IT cloud spending shows that the leap to cloud-based infrastructure may not be nearly as dramatic or complete as they suggest.
According to a survey of cloud spending as a proportion of IT expenses, IT departments in 2018 were spending just 19% of their budget on cloud services. The lion’s share of cloud spending, 34%, went to application software and licenses. Another 27% went to Business Process Outsourcing (BPO), such as data entry, call center functions, and accounts receivable. Only 11% of cloud budgets went to system infrastructure, and 13% to infrastructure software.
By 2022, organizations expect to grow their cloud expenses to 28% of the IT budget, with SaaS products and BPO accounting for 70% of cloud expenses. Cloud infrastructure spending is predicted to rise the most, a 7% jump to 22% of the cloud budget, while cloud-based infrastructure software will rise to 20%.
Gartner’s estimates may be substantial, but they’re not uniform across IT. The majority of growth will be found in SaaS use and outsourced business functions. IT’s nearly complete lack of ownership over these domains means that IT leaders concerned about data availability will predominantly be concerned with extracting data from these products and integrating it within their own collective data pool.
IT must be source agnostic, even in cloud-based analytics
Debating cloud vs. on-premise misses the bigger story, which is that services, platforms, and infrastructure are slowly going to become more fragmented over time. The diffusion of these services will present challenges to IT leaders who prioritize their ability to gather data from all available systems of record to perform IT analytics and derive value.
A 2019 survey of cloud usage of IT professionals found that the average organization uses around five different cloud services, including those used for experimental projects. 84% of enterprises utilize a multi-cloud strategy, with most employing a public/private hybrid cloud architecture.
Having a highly diversified and distributed application ecosystem presents a familiar problem to IT: punching through silos so that all data can be aggregated to gain crucial insights and provide value. If any piece of the puzzle is missing, IT leaders could have significant blind spots in their data oversight capabilities. Integrating data will be a problem whether we’re talking about an on-premises data center or any combination of public and private cloud functions.
IT analytics solutions utilizing pre-built data source adapters will enable IT leaders to more efficiently achieve their data integration goals and an accelerated time-to-value for solutions. The capability to incorporate data across sources will be vital regardless of whether IT uses entirely cloud-based analytics or employs a system hosted on-premises. It simply doesn’t matter where the data is — what IT needs are the right tools for access.
IT leaders interested in capitalizing on the advantages of a cloud-based business analytics system with minimal limitations can learn how to select the perfect solution with our new publication: “The Definitive IT Business Analytics Buyer’s Guide”
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