IT Infrastructure Spending Forecast: Lots of Clouds

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Recently, I attended the seventh annual Cloud World Forum in London, and was struck by how wide and varied the cloud ecosystem has become. Touted as the only show to enable the digital enterprise through cloud and DevOps, there were sessions on just about everything cloud related, from building businesses in the cloud and the Internet of Things (IoT) to big data analytics, cyber & cloud security, data governance and more.

According to IDC’s latest assessment of the market, cloud IT infrastructure grew by 25 percent year-over-year, compared to traditional IT infrastructure, which only increased by six percent over the same period. In fact, nearly one third of all IT infrastructure spending is made on cloud technologies. Clearly, the cloud conversation is no longer a conversation about tomorrow.

The rapid rise of cloud computing is chronicled in Nick Carr’s thought-provoking book, “The Big Switch: Rewiring the World, from Edison to Google.” Carr compares the shift to the cloud to the transformation that took place when companies stopped producing their own power and plugged into the newly built electric utility grid.

A hundred years ago, a furniture manufacturer had to build a factory alongside a river and use a paddlewheel to transform the energy of flowing water into a usable source to drive plant operations. Once the manufacturer could tap into cheap power pumped out by electric utilities, it was possible to get right to the business at hand: making furniture. The emergence of electric utilities dramatically changed how business operated.

Companies suddenly could be located anywhere and shift their focus from producing energy to driving innovation. The same can be said today for cloud computing. The ability to tap into rich computing services delivered over the Internet is creating a transformation that will impact business and society as profoundly as cheap electricity did. To that end, cloud computing is becoming the most valued, utility player in the IT world.

Going to the cloud enables companies to decrease capital costs, reduce risks, deploy faster, scale easier and be more agile in keeping pace with evolving needs. It also helps businesses shed IT management shackles to focus on more strategic business initiatives.

Now, I don’t recommend abandoning traditional platforms and moving everything to the cloud. Most every company I speak with is seeking a hybrid approach where cloud becomes an important tool in the IT toolbox. Inherent advantages include faster response times, economies of scale along with the ability to store massive amounts of information and handle extremely sophisticated and complex workloads.

Moving to the cloud also forces companies to confront what I jokingly refer to as “cylinders of excellence”—otherwise known as the separate silos of data trapped in isolated databases, datamarts, applications and data warehouses. The cloud forces companies to orchestrate and integrate their information across both traditional and cloud-based platforms in a way that is both smart and intuitive.

Earlier this year, I wrote how companies can drive innovation with a cloud-first culture. When planning new initiatives, cloud should immediately come to mind, as it can offer the greatest advantages in terms of agility, cost, speed and scalability. For example, a retailer dealing with a surge of big data analytics during a holiday season can benefit greatly by bursting data to the cloud for extra compute capacity. Once the holidays are over, the retailer can turn off the cloud portion of the project and continue to manage analytics internally.

Having a cloud strategy becomes increasingly critical as people adopt SaaS solutions, such as Salesforce.com and other CRM salesforce automation solutions. The cloud also is a good place to start new projects because you can succeed—or fail—faster and cheaper. Likewise, when you don’t have the capital or resources to build your own computing capabilities, the cloud is a great alternative and can help avoid the risk of capital expenditure that often accompanies IT projects.

But it’s not for everyone. Many healthcare organizations and companies in highly regulated industries are reluctant to welcome cloud computing into their environments. And that’s OK too. Hybrid data ecosystems are here to stay, which is why Dell has focused on helping companies harmonize their environments with application integration solutions to connect what lives behind the firewall with data in the cloud. Dell’s openness to the market has resulted in the development of agile, modular tools that enable customers to touch, manage and administer data across all points in their data ecosystems.

In doing so, we help customers bridge the gaps between data points and applications so they can put the right data on the right platform for the right person at the right time. That’s our focus. If it’s yours too, then surely cloud is finding its way into your environment.

How is the utility of cloud computing transforming your business? Connect with me on Twitter @shawnrog to share your perspective.

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