Data Centers Dissipate into the Clouds

Cloud storage is replacing large data centers while going through a constant evolution of its own.

With more companies offering cloud computing services, fewer enterprises are investing in massive data centers that once were the hallmark of large organizations.

The number of data centers worldwide has dropped since a peak of 8.55 million in 2015, according to Computer World. That number is expected to drop 15% by 2021.

Why? Consolidating data is one driver of the change. The other is companies that offer data as a service – secure data storage space typically referred to as the cloud.

Part of it is driven by tech giants Amazon, Google and Microsoft, all of which offer their own cloud computing services. Amazon Web Services is the most popular, followed by Microsoft’s Azure and Google Cloud Platform.

This trend is changing the way organizations manage data.

Cloud Storage Advantages

Chief technology officers of major companies increasingly recommend renting data storage space as a way to save both time and money. While 90% of data storage space was owned and operated by companies themselves just a decade ago, that percentage will likely drop to 50% by next decade, experts believe.

Companies see many benefits from the cloud. They include the following:

  • Cost-Managing a data storage center involves a costly infrastructure, including servers, operating systems, hardware and software. It also requires onsite management and maintenance. With the cloud, companies can skip all that, allowing their developers to run whatever software they want without the hardware and maintenance investment. The savings in both dollars, staffing and man hours is substantial.
  • Scaling-Many data as a service providers allow companies to rent space based only on what they use. However, storage capacity can scale up rapidly when needed.
  • Recovery-If there is a system failure, recovery time with cloud services typically is much faster than having a company’s own IT team handle the issue.
  • Data Analysis-Data service companies continually add analysis tools for use by their clients. These tools, which can be part of the service package, allow companies to crunch large amounts of complex data outside of their own computing systems.
  • Security-While the cloud made some executives nervous about potential security breaches, the instances of this happening have been few. Also, outsourcing data storage puts the issue of security on the service provider, another area of savings for companies.

Organizations also have the option to pay for a private cloud – one that services their data only. Some have chosen hybrid clouds combining both public and private cloud use.

When To Move Into The Cloud

The decision to take advantage of cloud storage involves a number of factors.

One factor is data centers becoming obsolete. As new applications are created, some data centers cannot work with the new technology. This requires a hardware update for companies that build their own data. When renting space, the issue falls to the data service provider.

Another consideration is which data to store in the cloud, and which you want to keep in house. Cloud storage has become the preferred choice for a host of business functions, including sales automation, customer service management, marketing operations and office production.

Another issue is size. For most businesses, moving into the cloud for at least a percentage of data storage makes sense. For companies that become much larger, it might be best to create a customized storage system of your own. Dropbox recently made this move, exiting the Amazon cloud over a period of more than two years.

The Dropbox move is a matter of scale. The company has 500 million users and enormous amounts of data. Most companies do not reach the size and sophistication of Dropbox, however.

The Future – Multiple Clouds?

At this point, about one-third of all companies that use cloud services actually work with multiple services, according to a survey from Microsoft and 451 Research.

This trend makes sense. Larger companies contract with different data storage services to support different applications. One for sales automation, for example, and another to handle day-to-day office operations.

The other common sense advantage is that companies keep from putting all their data eggs into one cloud storage basket. This allows for better, personalized service on specific business operations. The leader of the sales team has different data needs than a marketing manager.

A clear signal of this shift is Google’s $100 million deal to acquire Orbitera, a startup that specializes in providing multi-cloud data services.

As with everything where technology and business meet, the ultimate goal is streamlining services and improving the bottom line while also providing customers better service. Given these basic considerations, the shift to cloud-based data storage is likely to continue, whatever form it eventually takes.


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