Why Data Centers are Still an Expense for Many Enterprises

Although the cloud computing industry is booming in 2020, data says many enterprises are still paying for their on-prem infrastructures. How come?

According to Gartner, the year 2019 witnessed an estimated $3.7 trillion in IT spend, which consists of a 0.6% increase from the year before that. Cloud migration has become so indispensable, it is no longer a question of whether a company should move to the cloud, but rather a question of which, if any, of the company’s workloads should be kept on-prem during the move. 

Despite this growing trend, enterprise spending on data centers has not decreased throughout the past decade, according to a recent review by Synergy Research Group. 

A question naturally arises: why? 

There are many explanations for this. Over-dependence on physical data centers, fear of new changes, and many other factors. 

In this post, we will pick on and discuss three main reasons for such a tendency.

These are:

  1. Reliability Issues
  2. Security Issues
  3. Compliance Issues

Reliability Issues

IT directors are usually the ones responsible for system failures and performance issues. So it’s unsurprising that there is a lot of tension and anxiety when it comes handing over control of the company’s infrastructure to an unknown organization.

This fear of the cloud being unreliable further pushes the enterprises to stick with their current infrastructures, and not want to adapt to the new changes. 

It’s enlightening to note, however, that the variety of cloud models can actually offer more control for the user. This is simply due to the fact that while deploying on the cloud, one does not need to have resources or fixed allocation, which leads to huge savings as well. So it’s really a question of wisely planning for the migration by choosing the right cloud types and pricings.

Security Issues

One of the biggest concerns about the cloud is indeed the concern for security. This, in fact, keeps many businesses away from migrating their workloads, as they continue to utilize data centers. 

Many of these companies are still unconvinced that the cloud service would provide adequate security for their environments. Many will argue that some of the most substantial security risks lie around the retrieval of a company’s data on its VM. What adds to this is the amount of frequent “security breach”  news seen everywhere. The risk is just too high.

However, the cloud can truly provide its users with the highest security standards and measures. It’s just a question of closely exploring and studying the various security controls providers have in place. 

It’s true to say that the cloud is not perfect, just like any other system out there. Therefore, when a user overlooks certain flaws in a provider’s security measures due to a lack of experience or expertise, the chances of security threats rise considerably.

It might therefore be helpful to conduct an exhaustive security assessment of your existing infrastructure before moving with the cloud migration process. Collaborate with your cloud providers to assess any system vulnerabilities and discuss the need for cloud as opposed to staying on-prem.

Compliance Issues

Whether the cloud is compliant with industry regulations of a particular enterprise is yet another concern for many. For instance, if a company is dealing with a lot of highly sensitive data, moving it to the cloud might sound like a risky proposition. Where will the data be eventually stored? How and by who is it going to be handled and protected? Is it going to be stored at the same location as a business’ home country or different? 

All of these questions inevitably rise and beg to be answered. When it comes to data protection, various rules, and regulations govern in different geographical areas. 

Large cloud service providers such as Microsoft Azure, have ensured to enhance their cloud networks for higher security standards. One of the ways some experts offer to deal with industry regulations is for users to store their data in countries different than their own, that is unless data localization laws are in place. 

That’s because some territories and countries have stricter data privacy laws than others. Storing data in a different country might serve as an incentive for many.


Of course, there are also many other reasons for enterprises to keep using their data centers. Some of them are:

  • As a company enters a transition period during its cloud migration process, there is a need to keep its data centers before the final switch is made. Many businesses are actually reluctant to completely stop using their data centers because it provides them with an opportunity to always switch back if anything goes wrong.
  • Similarly to some cloud models, data centers might have yearly contracts on them, which means they cannot be simply shut off overnight. The same goes for tech employees and other staff that are directly involved; it takes some time for the transition to happen.

However, despite all these points, many agree that the numbers for data centers spending for the next decade should significantly decline. The cloud computing revolution will definitely be playing the main part in this trend. 

Which brings us to our next conclusion: the benefits and perks of the cloud are far too great to ignore and not utilize. The risks are there too, of course. But they can be easily mitigated when a company invests an adequate amount of time into research and analysis before taking the dive.

And with that, Clouve experts can certainly help. We evaluate your company’s needs and suggest the most optimal plan for your move. We provide you with complete coverage that includes migration, configuration, cloud monitoring, troubleshooting, and so much more. Simply put, we aim to help you save money and time by taking the heavy load off your shoulders!

Get in touch with us today to see what we can do for your business.