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10 Trends Redefining Enterprise IT Infrastructure

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The IT infrastructure landscape is evolving rapidly. While some may imagine infrastructure is only about stacks of hardware locked away in data centers, it comprises disruption and innovation in every area, from servers and storage to networking and software. In a recent report by McKinsey, researchers highlight trends that are giving rise to such disruption and innovation. They have identified ten trends that are already having a major impact on IT infrastructure and will bring even more disruption over the coming years. Excepert from the study given below.

1. ‘As-a-service’ consumption for everything from software to hardware. Enterprise buyers increasingly prefer consumption-based pricing models—a phenomenon that started with software and has now moved into hardware. This shift from capital expenditures to operational expenditures helps reduce risk, frees up capital, and provides increased flexibility. From 2015 through 2016, revenues for infrastructure as a service (IaaS) and platform as a service (PaaS) rose by 53 percent, making them the highest-growth segments in cloud and infrastructure services. Considering that a unit of compute/storage in the cloud can be up to 40 to 50 percent cheaper in total cost of ownership than a unit on premises, the shift to as-a-service models is striking. In addition to moving from on premise to cloud, IT providers and customers are experimenting with annuity-based payments for traditional hardware.

2. The public cloud goes mainstream. While companies have been moving their workloads to the public cloud for years, there has recently been a sea change at large enterprises. Capital One, GE, Netflix, Time Inc., and many others have drastically reduced or even eliminated their private data centers, moving their operations to the cloud.2 In fact, cloud providers are expected to account for about 80 percent of shipped server and storage capacity by 2018.

Amazon is the leader in IaaS, with about 40 percent market share.3 Microsoft is a clear second, followed by Google and IBM. Together these players account for approximately 65 percent of the IaaS market today. With the decline of on-premises data centers, they could account for almost half of all IT infrastructure provisioning by 2020. If that is the case, only companies with significant capital-investment capabilities could compete with them. One potential candidate would be Alibaba, which has recently experienced triple-digit year-over-year cloud-related revenue growth, driven largely by cloud adoption in China.

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Article Credit: CXO Today

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