The Pandemic Is Laying Waste to On-prem Data Centers

Major survey suggests half will be closed in the next two years.

Max Smolaks, Senior Editor

January 21, 2022

3 Min Read
Server room Internet connected servers with multi cables
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The latest victim of the pandemic is quite surprising: legacy in-house data centers.

In a survey of 1,600 IT professionals by network specialist Aryaka, more than half (51%) of respondents said they they were planing to close all of their on-prem data centers in the next 24 months, and 27% said they would eliminate at least some of their facilities – all in favor of cloud computing.

The change is thought to have been caused by the rapid introduction of hybrid work models, which pushed businesses to embrace the cloud and applications delivered as a service.

“As you move resources to the cloud, it becomes increasingly inefficient for all these branch offices and remote employees to hairpin, as I would call it, back to the traditional on-prem data centers,” Dave Ginsburg, VP of product marketing at Aryaka, told Data Center Knowledge.

At the same time, the pandemic has elevated the importance of Wide Area Network (WAN) technology and secure access service edge (SASE) – a new term invented by Gartner to encompass most of the infrastructure services necessary for remote work.

“This creates the need for very dynamic bandwidth reallocation, when you've got employees moving from a remote location to on-prem, either headquarters or branches. There's flexibility in that movement; and so, the network also has to offer the same level of flexibility,” Ginsburg said.

A bad time for on-prem, a good time for Microsoft Teams

Aryaka’s 6th annual State Of The WAN report paints a picture of an industry in the midst of a major transition. The new world of hybrid work brings with it different priorities, and a different approach to IT infrastructure.

Of the 1,600 survey respondents, nearly half said that 25-50% of their organization’s employees were working remotely over the last 18 months, and a quarter said they closed between 25-50% of their work sites.

After the pandemic-related restrictions are lifted, 43% said they anticipate that up to half of their company’s workforce will remain remote. This reduces the demand on apps and services delivered from legacy in-house data centers.

“We have statistical findings on on this movement to what we're calling ‘the permanent hybrid enterprise,’” Ginsburg said. “And with it, enterprises moving to a cloud-first, service provider-first posture.”

This goes some way to explain why 35% of respondents said they were looking to eliminate all in-house data centers and move to public cloud in the next 12 months, with 16% looking to do the same within 12-24 months. Another 27% said they would eliminate at least some of their server rooms, to be replaced with cloud services.

Among the newly popular cloud and SaaS apps, Microsoft Teams was the undisputed leader, identified by 58% of respondents as being the most important to their organization – up from just 34% in 2021. It was followed by Microsoft 365 (55%), Zoom and Google Docs (35%), Salesforce (28%), and SAP (25%).

There should be plenty of money to pay for any future infrastructure initiatives: the survey suggests that IT budgets are on the increase, in line with other industry surveys. A quarter of respondents expect their budgets to grow by 25% or more in the next year, while three-quarters are projecting at least 10% growth.

About the Author(s)

Max Smolaks

Senior Editor, Informa

Max Smolaks is senior editor at Data Center Knowledge, a leading online publication dedicated to the data center industry. A passionate technology journalist, Max has been writing about IT for a decade, covering startups, hardware, and regulation – across B2B titles including Silicon, DatacenterDynamics, The Register, and AI Business.

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