Cloud spending for the first time exceeded traditional infrastructure costs - what does it mean

    According to IDC, in the third quarter of 2018, the income of companies supplying servers and switches to cloud providers for the first time exceeded the income of equipment vendors for traditional infrastructure. We understand what this trend can be connected with.

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    What research says

    In the third quarter of last year, the cloud infrastructure brought hardware providers a revenue of $ 16.8 million. While for traditional infrastructure this figure was 16.2 million. Total in percent is 50.9% and 49.1% respectively. At the same time, IDC predicts that global companies will continue to invest in cloud infrastructure and by 2022 its share will be already 57.6%.

    The growth in revenues from suppliers of equipment for cloud providers is due to the construction of a large number of new data centers and the boom of updates to the fleet of already functioning data centers. First of all, this is due to the increasing popularity of cloud services, which today can be considered a common and mature technology.

    This is confirmed by the figures provided by analysts from the Synergy Research Group. According to their data , increased by 22%, and on-premise solutions for global spending in 2018 on a cloud infrastructure - have fallen by 4%.

    Why the cloud becomes more popular

    Experts and analysts identify several drivers of demand for cloud services.

    The growth rate of development of IT services . According to the IDG survey of 2018, this factor was called decisive for 71% of the 550 interviewed IT specialists of global companies. Cloud gives organizations the ability to quickly offer customers new services.

    An example would be American Airlines. Its engineers moved to the cloud website, a platform for booking tickets and other user services. This allowed the carrier to reduce the development time of the functionality for reassigning the flight in case of its cancellation and issuing new tickets to passengers by half.

    Easy scaling. Companies have the opportunity in a few minutes to increase or decrease the amount of computing resources consumed in the cloud. For example, to solve the problems associated with scaling, the cloud infrastructure uses the car-sharing service BelkaCar.

    The load on the company's applications changes regularly. It depends on the number of cars, the frequency of their use, the style of driving customers and so on. The cloud allows developers to adapt to changing conditions and connect additional instances with services during the day.

    Moreover, scaling infrastructure in the cloud is cheaper than in the case of on-premise. For example, according to Fortune magazine, one of the 100 largest financial organizations introduced the cloud because buying new servers to store growing data was too expensive. The transition to cloud storage has helped reduce infrastructure costs by 80%.

    At the same time, the ability to quickly and affordably expand the infrastructure attracts not only large companies. According to HBR, cloud systems most often use small organizations or startups that employ up to ten people. According to journalists, the cloud helps such companies to experiment with new features and products, to find their niche in the market. They do not need to spend a large amount of money to purchase a fleet of servers at a time.

    Hybrid cloud future

    The main role in the cloud trend while predicting a hybrid cloud. And now the main task for the IT community is the creation of services that will simplify work with multi-cloud systems.

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    A number of large IT companies are already working in this direction. The course on a hybrid cloud in 2018 took Dell (along with VMware) and IBM (together with the newly acquired Red Hat). Organizations are planning to develop containerization technologies, in particular, Kubernetes. For example, VMware acquiredstartup Heptio, which releases services that simplify the implementation of Kubernetes. At the same time, the creators of this orchestration system themselves founded Heptio, who will now work together with VMware.

    Public cloud service providers are also releasing solutions for hybrid systems. For example, Oracle recently introduced the Cloud Native framework. It is designed to deploy applications in a public, local or hybrid cloud environment. The system offers developers a large selection of native cloud services and local software. This speeds up IT infrastructure configuration.

    What's next

    Companies will probably not abandon the on-premise infrastructure at all. However, it will definitely become part of the hybrid solutions that are becoming more popular. By 2020, 83% of all corporate workloads will be performed in the cloud.

    The development of clouds will also lead to the improvement of certain approaches to the creation of IT systems. In particular, according to experts, one should expect the popularization of the principle of Infrastructure as Code . It will allow companies to work with the infrastructure as a code (to configure it with the help of software, rather than reconfiguring hardware) and simplify the configuration of complex and distributed systems.

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