Enterprises spend more on third-party datacentres than in-house ones: Uptime survey

Uptime Institute’s annual datacentre industry survey reveals shift in IT spend away from enterprise-owned datacentres to outsourced options

Uptime Institute’s annual datacentre industry survey has revealed a shift in IT spend, away from enterprise-owned datacentres to outsourced options such as software as a service (SaaS), cloud computing, multi-tenant colocation or wholesale datacentre services.

The third annual survey showed that overall datacentre spend up to spring 2013 increased across the globe with 36% of datacentre organisations receiving larger budgets when compared with 2011 (27% ) and 2012 (32%).

But the budget growth was more lopsided in favour of third-party services. About 63% of third-party datacentres received large year-on-year budget increases compared with just 25% of enterprise datacentre operators.

In fact, since 2011 a growing number of enterprise datacentres have reported budget decreases and that number jumped to 21% in 2013.

This data suggests third-party datacentre service providers are growing at the expense of in-house IT operations, according to Matt Stansberry, Uptime Institute’s director of content and publications.

“The vast majority of growth is occurring in the third-party providers, reflecting a shift in spending,” said Matt Stansberry.

This is not the end of the enterprise-owned datacentre, but it should serve as a wake-up call, he warned.

The enterprise datacentre operators are made up of banking, manufacturing, healthcare, retail, education, government and other industries, according to Uptime. The organisation’s survey in November 2011 showed that 85% of enterprises used third-party compute capacity only as a supplement to their existing internal IT infrastructure.

But today, the burden of articulating value has shifted from the third-party provider to the internal enterprise staff.

“Enterprise datacentre managers will need to be able to collect cost and performance data, and articulate their value to the business to compete with third-party offerings,” he said.

The shift may be because of third-party providers’ efficiency, and frequent cost and performance reports to the CIOs as opposed to in-house datacentre managers’ lack of scheduled reporting.

Datacentre efficiency levels hit the wall

Among other findings, the study showed that datacentres’ energy efficiency has plateaued.

Only 50% of respondents from North America said they considered energy efficiency to be very important to their companies. That was down from 52% last year and 58% in 2011.

Datacentre facilities teams led “green IT” efficiency initiatives because the cost of inefficiency was allocated to their department. 

“Many datacentre facilities teams have done what they can,” Stansberry said.

The survey also found a growth in the adoption of DCIM (datacentre infrastructure management) reporting tools with datacentre capacity planning being the major driver

But 61% of respondents said the cost of DCIM tools is still very high.

It also found that enterprise public cloud adoption rose from 10% in 2012 to 17% in 2013, demonstrating growing confidence among enterprises to use public cloud services. Scalability, cost efficiency and meeting customer demand were cited as the top drivers of cloud adoption while security, lack of IT skills and initial cost investment were cited as top barriers to using cloud services.

The study of over 1,000 respondents represents datacentre operators in North America, Europe, Asia and Latin America.

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