As cloud spend went up, data center budgets plateaued in 2010s

by Paul Davenport on January 14, 2020

A recent report from Synergy Research Group that rounds up the decade’s biggest trends in IT spending was at times both predictable and a bit of a head-scratcher.

For starters, in 2010, the amount of budget that IT teams were allocating to cloud infrastructure services was practically non-existent. This isn’t altogether surprising, as the cloud as we know it today experienced rampant growth in recent years as new SaaS workflows flood the enterprise space.

A more surprising takeaway from the report, however, is that the spending on data centers within the enterprise space has remained relatively stagnant over the decade even as cloud investments took off at a breakneck pace. That means that even as enterprises sought to unload many of the hardware-based, legacy workflows that required local connectivity to a privately-owned data center, it doesn’t appear that businesses have lessened their dependence on data centers whatsoever.

Part of the logic (and main selling points) behind cloud services is that they offer enterprises the option to start offloading and stop investing in data centers, which can be costly to maintain as both operational “hubs” for an enterprise network and as real estate (housing/cooling hardware, staffing technicians, etc.).

So even as cloud services investments eclipsed those of data centers for the first time in 2019, both categories ended the decade on an uptick.

So what’s up with the conflicting outcomes?

One way to look at it is that even though IaaS, PaaS and SaaS have never been more popular and are already part of the “new normal” where enterprise networking is concerned, we’re still closing out the decade in something of a transition period. While many large enterprises are still in the midst of migrating to the cloud, for instance, they likely want to keep their data centers operational as a fallback should teams hit any roadblocks and need to revert.

Another factor is that because the rise in popularity of cloud services has been rapid and recent, many companies are still signed onto legacy data center leases, whether they need the servers or not. Because of these sunk costs into staff and equipment, simply flipping the switch on a corporate data center might simply not be viable until contracts have expired and migration strategies have been ironed out.

There is, of course, the fact that many companies – though increasingly fewer – are still apprehensive above hosting some data off-premises or in the public cloud. This isn’t entirely unreasonable, but many of the reasons for this apprehension where security and privacy are concerned are quickly becoming moot points as increased regulation have made the cloud a much safer place, regardless of provider.

At the end of the day, we enter the new decade much as we left the old one, with enterprise IT still in a state of flux and juggling a bevy of different networking technologies to help connect a growing web of remote locations and stakeholders. For teams to effectively manage any of it, they need a comprehensive monitoring solution that can see into the cloud, behind firewalls and along every hop network traffic travels to ensure end user experience meets expectations.