In the past, when business units requested new applications or services, IT organizations would first ask themselves, “How can we build it?” Now, the question is “Where can we find it?”
Gartner predicts that by 2025, 80% of enterprises will shut down their traditional data centers. In fact, 10% of organizations already have.
Many organizations are rethinking the placement of applications, based on network latency, customer population clusters and geopolitical limitations — for example, the EU’s General Data Protection Regulation (GDPR) or regulatory restrictions.
Enterprises with older data centers don’t want to rebuild them or build new ones due to high capital costs. They would rather have someone else manage the physical infrastructure. Gartner’s 2019 IT Key Metrics Data shows that the percentage of the IT budget spent on data centers has decreased over the past several years, and now accounts for just 17% of the total.
Colocation is often used as a replacement for traditional data centers, because it offers higher availability, reliability, certified building tier levels, energy efficiency, dedicated facilities management and the ability to scale.
What remains on-premises are business processes that are mission-critical and require greater oversight and more detailed levels of control than is available via cloud infrastructure and hosted models.