Cloud Growth Slows, Slightly

Arthur Cole

The cloud is still growing by leaps and bounds, but not as fast as it was at the beginning of the decade. But it is unclear if this represents a long-term trend as the market reaches the front end of a traditional bell curve, or just a minor pause in the technology’s ultimate takeover of the enterprise data environment.

According to IDC, vendor revenue from the sale of cloud-based infrastructure products grew by 9.2 percent in 2016. This represents a healthy market of $32.6 billion, but it still represents a drawback of about $4.5 billion from what the company had predicted based on earlier growth data. The company suspects that part of this is due to a slowdown in the hyperscale market, but it can also be attributed to the fact that many companies have migrated some of their workload to the cloud and are seeing how it performs before moving forward. And it is important to note that cloud revenues are increasing while spending on traditional data center infrastructure is declining on the order of about 9 percent per quarter.

But this isn’t to say that the enterprise is ready to give up on the local data center just yet. According to a recent survey from the Uptime Institute, the percentage of workloads residing in enterprise owned and operated facilities has been stable at about 65 percent since 2014. To the institute, this means that regardless of what happens with the public cloud, local data center infrastructure will remain as a critical asset for most enterprises as they pursue digital-centric strategies.

What does seem likely is that even within on-premises data centers, infrastructure will become more cloud-like. One of the latest IT trends is On-Premises as a Service (OPaaS), according to Zadara Storage’s Kevin Liebl, in which users get actual hardware to deploy locally, but pay for it on a per-use or subscription basis. This eliminates the upfront capex costs of hardware while still allowing the enterprise to scale resources and operating costs to workload demands and connect their on-premises infrastructure to third-party clouds as needed. Analyst firm IT Brand Pulse predicts that half of all storage purchases will be on an opex footing by mid-century.


But both enterprise users and their system vendors and service providers should be aware that the technology-focused IT strategies of the past are quickly coming to an end, says CIO Insight’s Samuel Greengard. Instead, the industry is gravitating toward more results-oriented frameworks where the configuration and location of infrastructure is less important than the performance and productivity it brings to digital processes. The cloud will undoubtedly be a key component in these frameworks, but the point is that it will have to prove itself on an operational level rather than serve as the de facto infrastructure merely because it is the more recently developed technology.

The diversity of infrastructure these days is either in response to or is driving (sometimes it’s hard to tell) the diversity of data workloads. As the data environment expands beyond simple email and back-office data processing to digital services, advanced analytics and real-time device management, no single form of infrastructure is optimal for all uses cases.

In this light, the challenge going forward will not be to merely select the proper resources for a given service or application, but to ensure that all forms of infrastructure integrate as needed. Deploying the right services on the right infrastructure will be important, but making sure this does not lead to yet more data silos in the cloud will be crucial.

Arthur Cole writes about infrastructure for IT Business Edge. Cole has been covering the high-tech media and computing industries for more than 20 years, having served as editor of TV Technology, Video Technology News, Internet News and Multimedia Weekly. His contributions have appeared in Communications Today and Enterprise Networking Planet and as web content for numerous high-tech clients like TwinStrata and Carpathia. Follow Art on Twitter @acole602.


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