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18 March 2013

Cloud users bring data back in house

Companies that shifted towards the Cloud before 2012 are starting to move towards tighter control of their data again, be it through the establishment of private clouds or bringing IT back in house according to Oracle.

Oracle, which  predicted the move in its January 2012 Next Generation Data Center Index results, this month said the 2013 results collected by analyst firm Quocirca confirmed the trend, with 66% of companies – up from 45% - now using only inhouse data facilities.

Quocirca analyst Clive Longbottom said companies are still consolidating, with the number of companies with a single inhouse data center rising from 26% to 41% between the cycles, but at the same time the number of respondents using multiple inhouse operations also rose by 6% to 25%.

“The latest two cycles of the research have caught organisations between two points,” Longbottom said.

“Cycle II was carried out just as organisations were looking to cloud computing with many projects being carried out at a time when cloud is becoming more mainstream.

“Cycle III has been carried out at a time when cloud is becoming more mainstream, and many pilots are now becoming full run-time projects.”

Colocation and cloud providers Telehouse and Navisite said they have both witnessed similar trends, but can’t attribute the shift solely to the maturing of the Cloud.

Lukasz Olszewski, senior systems architect at Telehouse and David Grimes, CTO at Navisite, both say they believe companies “jumped” into the cloud without carefully thinking through their cloud strategy in the first place.

“The first wave of cloud adoption was not that well thought through,” Olszewski said.

“It was more about moving to the Cloud without choosing the cloud provider and a lot of companies ended up using SaaS (Software-as-a-Service) services based in some locations all over the world, only to discover, for example that they had huge latency problems and other issues. Now they are moving back.”

Grimes said he believes a lot of companies thought it was necessary to move to the Cloud “because of the market buzz”.

“Those who have jumped back are generally those that didn’t have a good reason to move to the Cloud in the first place,” Grimes said. “They were almost on the bandwagon in that sense.”

“The ones that are staying are the companies that took a more methodological and gradual approach to adopting cloud – some may have been using existing managed services first and didn’t find cloud all that different, except it was faster. Not necessarily cheaper but more flexible.”

“I do think, however, those that have bounced back will start, in one or two years, re-approaching the Cloud and probably in a hybrid capacity because few companies really invest in enterprise data centers properly to build out what they need to operate their business.”

Oracle engineered systems product leader John Abel has another take on the bounce effect. He said he believes it is partly due to the simplification of the IT stack and the shift towards more standardised enterprise IT, which is allowing more agility around the Cloud.

“The simplification of these strategies by vendors have provided more flexibility and agility – customers now want to blend in private and public clouds,” Abel said.

“Companies want to be able to have  private cloud but have the freedom to move to a new hosting option that may be more efficient in the next six months.

“Many customers I speak with now move to a platform of choice, they understand when to use private, public or hybrid clouds.”

Either way, Abel, Grimes and Olszewski say the bounce is no indication that cloud will falter in future.

“We still see customers are asking for cloud more and more,” Olszewski said.

“And customers aren’t looking at cloud as a commodity any more – they are looking beyond using cloud as a test and development platform, looking at it instead from the whole stack.”

Luigi Freguia, SVP of Oracle Systems EMEA said the “data deluge” will also push companies that may not have considered cloud before to start looking at external options.”


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