From the Ashes of the Corporate Data Center, A Place for IT Transformation Is Born

Equinix PA6 in Paris, France

Just as video killed the radio star, so will be the fate of many of today’s traditional systems and technologies as the rapidly changing digital economy makes way for new digital infrastructures and operations (I&O) to emerge in their place.

This is true across the IT stack, and as a cloud-first mindset takes hold, I&O leaders face the reality that the IT they have known for decades is dramatically changing, and data center infrastructure will not be spared. As workloads move to the cloud, enterprise data center footprint needs recede—and since companies have an imperative to innovate, often in a self-funding way, shifting an on-premises data center to a hybrid cloud future can reduce capital expenditures and labor costs while simultaneously boosting agility.

The radical evolutionary fate of these traditional data centers is predicted and subsequent impacts and recommendations are outlined by David Cappuccio in a recently published Gartner report titled, “The Data Center Is Dead, and Digital Infrastructures Emerge.” 

Cappuccio writes:

“The role of the traditional data center will be relegated to that of a legacy holding area, dedicated to very specific services than cannot be supported elsewhere, or supporting those systems that are most economically efficient on-premises. As interconnect services, cloud providers, the Internet of Things (IoT), edge services and SaaS offerings continue to proliferate, the rationale to stay in a traditional data center topology will have limited advantages.”

The report puts forth some staggering figures, asserting: “By 2025, 80% of enterprises will have shut down their traditional data center, versus 10% today.”

We believe Cappuccio’s predictions are in line with what we are experiencing at Equinix with our customers and throughout the industry in general. The enterprise owned-and-operated data center is on the endangered species list. But let’s not write any obituaries yet! Enterprises still have critical data center needs, but those needs are changing dramatically. Today, IT leaders are being called on to deliver high-performing, data-intensive, dynamic applications and IT services to users distributed globally. Businesses’ I&O need to be proximate to employees, partners and customers out at the edge to deliver a higher quality of experience. And traditional enterprise data centers, centralized and siloed from the many outside IT services being consumed in the modern marketplace, simply aren’t suitable to meet this need.

Companies are beginning to adjust to this by re-architecting their corporate IT infrastructures in favor of global colocation and interconnection points of presence. Instead of being centralized and proximate to HQ and operations staff, these data center deployments are distributed, close to users and services. Neutral colocation facilities, like those that Equinix operates worldwide, have emerged as the natural integration points between cloud services, private data stores, and other supply chain partners and customers. This is why 46% of the Fortune 500 now operates at Equinix.

We agree with the recommendations Cappuccio puts forth in the report, and have a few of our own for I&O leaders to take into consideration as their businesses change, and the role of IT becomes one of agile integrator and strategic business enabler, delivering services faster, cheaper, and with more insight to both internal and external customers:

  • Adopt an interconnection-first orientation. In a world where IT leaders are integrators of best-of-breed cloud services, thinking about interconnection as a primary IT design principle, as opposed to an afterthought, is critical. And taking an interconnection-first approach will help you deploy digital infrastructures as Gartner prescribes in its recommendations. The Equinix IOA® Knowledge Base is a great resource for any company looking to expand its footprint to the digital edge.
  • Be where your users are. How users experience today’s apps and services is as much driven by their physical proximity to them as it is by the quality of code used to develop them. With 200 data centers in 52 markets around the world, chances are Equinix offers locations that are close to your users, wherever they are and whenever they need to be there.
  • Create direct, secure connections to services. Direct, cost-effective, secure connections to the cloud and IT services you use are essential for greater performance and predictability. Direct connectivity becomes a seamless extension of the enterprise network, and leads to increased reliability, lower latencies and higher security—driving new levels of efficiency, speed and service to customers. With vastly more cloud and IT service providers calling Equinix home than any other provider, we are the place to reach your most important IT vendors and partners.

The world of IT is in the throes of great change. And, while none of us knows exactly what the future will bring, our goal is to be constant in helping our customers solve problems and steward them through their own digital transformations, whatever form they may take. It’s true that traditional, on-premises data centers are dying as disruption shakes up global industry, but something better is coming, and the opportunity is real. Equinix is there to help our customers imagine, innovate and seize it.

[i] Gartner, “The Data Center Is Dead, and Digital Infrastructures Emerge,” David J. Cappuccio, April 13, 2018. This graphic was published by Gartner, Inc. as part of a larger research document and should be evaluated in the context of the entire document. The Gartner document is available upon request from Equinix.

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