Why some workloads are still at home in your data centre
On-prem, in control
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This report takes a look at Computing’s bespoke research findings to uncover
to what extent on-premises computing still has a crucial role to play and the main drivers behind this. Ultimately, we reveal why the cloud isn’t
a silver bullet technology solution and why most organisations are pursuing hybrid and multi-cloud infrastructure models.
The large-scale cloud migration witnessed over the past decade seemed to convey that organisations were on long road to shifting almost all computing from on-premises to the cloud. However, the reality is far more nuanced. We now live and work in a hybrid world, with enterprises taking a best-of-breed approach to where they host their workloads and data. Often, the flexibility and scalability of the cloud makes most sense, yet on-prem solutions can still be the more cost effective, controllable, and secure option in some instances.
While the past-two years saw accelerated cloud migration, often in support of greater hybrid working, Computing has also discovered a significant minority are also undertaking de-clouding – taking workloads from the cloud and hosting them on-prem instead.
Executive summary
of respondents still mainly undertake their workloads
on-premises
36
%
Key Findings
described their cloud
strategy as hybrid
45
%
Offering scalability, accessibility and allowing organisations to outsource some of their IT challenges to a third party, it is easy to see why most of today’s organisations have some form of cloud migration strategy.
But a monolithic approach is not the answer, and cloud migration should not be the default for all workloads, with some better suited to staying on-premises.
The first set of findings reveal that only 2 per cent of organisations have fully migrated to the cloud, with the rest of organisations taking a hybrid approach, combining cloud with on-premises. In fact, 36 per cent still mainly store their workloads on-premises.
Despite the publicity around the benefits of cloud migration, few organisations have fully made the leap, choosing to keep some workloads on-premises. They may have moved some workloads to the cloud and are deciding whether or not to move others, making it a good time to evaluate which architecture is better from an operational point of view at this point of time and for the foreseeable future.
A hybrid approach
However, the previous findings are by no means set in stone, with 34 per cent of respondents still undertaking the bulk of their transformation plans, indicating the workloads that are currently stored in the cloud are subject to change. Just 14 per cent regard themselves as a cloud-first and technologically mature organisation, with 21 per cent answering that they have largely transitioned to cloud-first ways of working. Just 5 per cent said their cloud transformation plans have stalled.
Organisations’ cloud strategies
While the benefits of cloud migration are now widely known, the concept of declouding is also increasingly a topic of discussion within the technology industry. The majority of organisations surveyed have not moved workloads away from the cloud. However, 13 per cent have, with 9 per cent having plans to do so in the future.
Declouding involves companies moving their workloads back from the public cloud to on-premises, hybrid cloud or private cloud. The reasons for this shift could include performance, cost optimisation, data regulation, and security issues.
The declouding debate
Outsourcing where necessary to concentrate on processes the internal team have specialised knowledge of.”
IT engagement at board level to facilitate business model changes enforced by hybrid working.”
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Conclusion
However, that does not mean cloud computing is suitable for all workloads. Computing’s research reveals that many organisations are opting to keep workloads that require low latency, involve legacy applications, or where security is paramount on-premises. It also more cost-effective in many cases.
Organisations that have rushed to the cloud without a fully-fledged strategy, may be discovering cloud computing is not suitable for all workloads, and now considering declouding.
From this, it is clear that an iterative, situational strategy, rather than an “all or nothing” approach, to cloud migration is necessary, and organisations must carefully consider the best course of action on an application-by-application basis.
Cloud and on-premises environments should not be pitted against each other but should instead be viewed as parts of a wider digital strategy. Many organisations have already taken a hybrid approach to workload hosting, incorporating the elements of different deployment models. For this to be a success, it is important to have a strong cloud governance strategy, regularly assessing how workloads are performing in the cloud, and a strategy for ensuring hardware is kept up-to-date, taking advantage of technological developments and avoiding hurdles caused by ageing infrastructure.
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Executive summary
Key findings
A hybrid approach
On-prem or in the cloud
The declouding debate
Conclusion
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34%
28%
2%
1 2 3 4 5 6 7 8 9 10
2%
2%
3%
12%
19%
20%
32%
4%
6%
Most important strategies for keeping on top of IT challenges
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The hype that has surrounded cloud computing in recent years has often dominated conversations around digital transformation. This is somewhat justified, with the strengths of cloud computing allowing organisations the scalability and agility to quickly innovate and grow.
36%
When asked whether the benefits of cloud migration have lived up to expectations, the average rating was a 6.7 out of 10. Just 3 per cent rated their cloud transformation as less than a two, with 10 per cent rating it a nine or high, indicating that the majority have had a somewhat middling experience of cloud migration.
Migrating to the cloud is part of a longer journey, rather than an end goal, so organisations that have rushed their migration plans without a robust strategy may find the technology is not living up to expectations, and that some workloads may be better suited to on-premises storage.
Despite over a third of respondents still storing most of their workloads on-premises, 62 per cent predict that their use of on-prem computing will decrease over the next two years. Just 17 per cent predict it will increase. But even if on-premises is decreasing, it still has an important role to play.
The workloads organisations are most commonly storing on-premises are ERP and HCM, databases, and HPC/GPU. These are typically mission-critical workloads that need to be accessed round-the-clock, with any outages having a negative impact on business.
Server reliability, availability, and serviceability are essential for mission critical applications such as the ones mentioned above and moving to the cloud may be deemed too risky.
Some legacy applications have also been designed in a way that doesn’t allow data to be migrated to the cloud easily, or depend on important customisations, making a wholesale migration unsuitable due to the cost and complexity involved.
Furthermore, workloads in which there is a need to analyse large amounts of data with minimal latency, or extremely large bandwidth requirements, are often better suited to remaining on-premises.
When it comes to what organisations are storing in the cloud, customer relationship management, web-facing applications, collaboration tools and data analytics came out on top.
There are both business and technical considerations for choosing a cloud or a non-cloud deployment for different workloads.
The most important consideration when deciding whether a workload should be stored on-premises or in the cloud is cost, chosen by 52 per cent, followed by security at 46 per cent.
Running workloads on-premises means investing money in hardware, deployment and software licensing fees, as well as employing the right IT professionals to manage the infrastructure. However, cloud migration can also have high cost of entry and may have high operational expenditure as you scale. Furthermore, workloads that have a high amount of data ingress and egress (which refers to data being moved in and out of the cloud) may result in higher costs as cloud providers charge for moving workloads.
While the decision for where a workload is stored should not be based purely on cost, it is something that organisations should carefully weigh up to avoid being caught off guard by hidden costs further down the line.
Security is another important consideration. While cloud providers offer highly secure services, organisations may still have reservations. Organisations that choose on-premises often feel that keeping everything onsite gives them more control. Furthermore, industry-specific legal requirements and other regulations often have strict guidelines as to where the data is stored and may prohibit the use of public cloud.
Integration with existing systems is also an important consideration when deciding what to migrate to the cloud. As new SaaS applications are added to an organisation’s infrastructure, ensuring data can be transferred between different environments, systems, and applications is a must. Having the right tools to aggregate, integrate, and manage cloud and on-premises services can help alleviate these challenges.
Cyber security solutions
8.4
Internal skills
8.1
Modern endpoint management tools
7.8
Regular risk assessments
7.1
Automation
7.0
Most important factors in resolving IT issues
1=Not at all important 10=Extremely important
Dedicated incident response team
6.8
Unified observability tools
6.8
Outsourced support
5.1
Databases, web-facing application and HPC/GPU are the most common workloads organisations are moving back on-premises. These are generally more complex workloads, which may be unsuitable for a cloud environment, which organisations may have discovered through experience.
Organisations may have set out on their migration journey with being cloud-first or cloud-only as the goal, only to find that the path is not suitable for all workloads. Having a cloud governance strategy helps organisations keep track of what they are storing in the cloud, and whether workloads are in the right environment to perform at their best. From there, they can assess if declouding certain workloads is an appropriate next step.
The most common reason for declouding is cost, chosen by 65 per cent of respondents, with 24 per cent choosing greater control or customisation, and integration. “Other” responses included internet latency and performance.
While the benefits of cloud technology may allow for cost savings over time, organisations that have not yet achieved a return on investment may revert to on-premises. Furthermore, on-premises systems are much easier to configure, customise and modify to suit specific requirements, something organisations may not be getting from the cloud.
Declouding does not mean abandoning the public cloud altogether, but rethinking cloud strategy. Almost every business is likely to continue to store some assets in the public cloud, but more organisations are focusing on finding the optimal solutions for individual workloads.
66 per cent agree that on-premises computing still has a crucial role to play at their organisation, with just 10 per cent disagreeing.
While cloud computing has had the spotlight for some time now, it is clear that some workloads are better suited to on-premises and, for some organisations, on-premises remains the safest and most cost-effective choice. It is therefore important that it is not overlooked in digital transformation strategies.
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said cost was the most important factor when deciding where to store workloads
52
%
have moved a workload back
on-premises after moving it
to the cloud
13
%
agreed that high-performance reliable hardware is crucial to
on-prem success
75
%
This is backed up by the next finding, in which 45 per cent of organisations described their cloud strategy as hybrid, which refers to a mixed computing, storage, and services environment made up of on-premises infrastructure, private cloud services, and a public cloud. Just 8 per cent refer to their approach as single cloud, indicating a reluctance to go with just one cloud provider. However, 30 per cent describe themselves as cloud-first.
A hybrid approach to cloud and on-premises means reaping the benefits of the different environments, and means that critical workloads can be separated from less-sensitive workloads, public cloud resources can be allocated as needed, and moving to the cloud incrementally becomes easier.
Organisations must ensure that workloads that exist in different environments are interoperable in order to get the most out of data, regardless of where it is stored.
Workforce location
On-premises full time
12
%
Entirely remote
2
%
Hybrid
87
%
Despite the publicity around the benefits of cloud migration, few organisations have fully made the leap, choosing to keep some workloads on-premises.
Factors in deciding whether to place a workload on-premises or in the cloud
Cost
52
%
Security
46
%
Integration
29
%
Compliance
22
%
Existing infrastructure capabilities
26
%
Agility
21
%
Migrating to the cloud is part of a longer journey, rather than an end goal, so organisations that have rushed their migration plans without a robust strategy may find the technology is not living up to expectations.
Server reliability, availability, and serviceability are essential for mission critical applications such as the ones mentioned above and moving to the cloud may be deemed too risky.
Where does your organisation store the following?
31%
While the decision for where a workload is stored should not be based purely on cost, it is something that organisations should carefully weigh up to avoid being caught off guard by hidden costs further down the line.
Sixty-two per cent of respondents said their organisation has modernised it’s on-premises hardware to keep pace with innovation. The fact that a third have not done so is concerning, and implies they are suffering poorer performance, reliability, energy efficiency and security.
5%
26%
2%
16%
23%
Windows 11 migration progress
Organisations may have set out on
their migration journey with being
cloud-first or cloud-only as the goal,
only to find that the path is not
suitable for all workloads.
“On-premises computing still has a crucial role to play at my organisation”
2
%
8%
38%
28%
Strongly disagree
Somewhat disagree
Neither agree nor disagree
Somewhat agree
1%
Strongly agree
24%
7%
21%
Keeping up to date with current IT developments, ongoing training, and testing new technologies to see where they can enhance or replace current systems and processes.”
Remaining current, supplying users with an "as at home experience", whilst ensuring corporate data and systems remain uncompromised.”
Up-to-date and regular training of staff and plan in place to consolidate their learning.”
Workloads being moved back on-premises
12%
58%
17%
10%
3%
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1=Not at all confident 10=Extremely confident
We surveyed 131 IT leaders involved with IT infrastructure strategy or implementation at their respective organisations.
34%
21%
17%
14%
Current cloud maturity
Use of on-premises computing
over the next two years
Increase greatly
Increase somewhat
Stay the
same
Decrease somewhat
Decrease greatly
7%
10%
19%
44%
17%
On-prem or in the cloud?
ERP (Enterprise Resource Planning)/HCM (Human Capital Management)
On-premises
In the cloud
A combination of cloud and on-premises
CRM (Customer Relationship Management)
Data analytics/business intelligence
Database
Customer facing applications
Other key line of business applications
Productivity applications
Web-facing applications
Collaboration tools
HPC (High Performance Computing)/GPU (Graphics processing unit) computer
Content processing/delivery
Cyber security
42%
34%
19%
50%
50%
49%
42%
34%
23%
38%
60%
28%
33%
31%
19%
18%
43%
27%
52%
10%
34%
24%
17%
14%
32%
45%
9%
52%
10%
26%
14%
19%
30%
12%
24%
Migration complexity
22
%
Bandwidth
26
%
Avoiding cloud
vendor ‘lock-in’
21
%
Customisation
16
%
45%
18%
8%
30%
Organisations’ cloud strategies
62%
30%
8%
Has your organisation modernised
its on-premises hardware to
keep pace with its needs?
Main reasons for declouding
Cost
65
%
More control/customisation
24
%
Integration
24
%
Visibility and governance
12
%
Security
6
%
Difficulties migrating legacy/bespoke applications
6
%
Vendor lock-in
6
%
Lack of cloud
skills within my organisation
6
%
Other (please specify)
18
%
41%
Database
29%
Web-facing applications
29%
HPC (High performance computing)/GPU (Graphics processing unit) computer
24%
Other key line of business applications
18%
Collaboration tools
12%
CRM (Customer Relationship Management)
12%
Data analytics/business intelligence
12%
Customer facing applications
6%
ERP (Enterprise Resource Planning)
6%
Application development
6%
Internet of things
6%
Content processing/delivery
6%
DLT (Distributed Ledger Technology)/Blockchain
7%
71%
9%
13%
Has your organisation moved any
workloads back on-premises?
“High-performance reliable hardware is crucial to on-prem infrastructure strategy success”
1
%
4
%
40%
21%
35%
Strongly disagree
Somewhat disagree
Neither agree nor disagree
Somewhat agree
Strongly agree
With on-premises computing still having an important role to play, it is important that ageing datacentre hardware does not stand in the way of organisations operating flexibly and with agility. 75 per cent agreed that high-performance reliable hardware is crucial to on-prem success, with just 5 per cent disagreeing.
It is vital that processors and supporting hardware platforms are efficient across all workloads. Without strong infrastructure in place, the benefits of keeping certain workloads on-premises will not be fully realised.
It is vital that processors and supporting hardware platforms are efficient across all workloads. Without strong infrastructure in place, the benefits of keeping certain workloads on-premises will not be fully realised.”
11%
5%
Extent to which the benefits of cloud migration
have lived up to expectations
Where does your organisation store the following?
On-premises
A combination of cloud and on-premises
In the cloud
31%
28%
33%
ERP (Enterprise Resource Planning)/HCM (Human Capital Management)
42%
31%
19%
CRM (Customer Relationship Management)
34%
18%
43%
Data analytics/business intelligence
19%
27%
52%
Database
50%
10%
34%
Customer facing applications
50%
24%
17%
Other key line of business applications
44%
23%
22%
Application development
49%
14%
32%
Productivity applications
42%
45%
9%
Web-facing applications
34%
52%
10%
Collaboration tools
21%
9%
25%
Internet of things
23%
26%
14%
HPC (High Performance Computing)/GPU (Graphics processing unit) computer
38%
19%
30%
Content processing/delivery
13%
8%
12%
DLT (Distributed Ledger Technology)/Blockchain
60%
12%
24%
Cyber security
Factors in deciding whether to place a workload on-premises or in the cloud
Cost
52
%
Security
46
%
Integration
29
%
Bandwidth
26
%
Existing infrastructure capabilities
26
%
Compliance
22
%
Migration complexity
22
%
Agility
21
%
Avoiding cloud
vendor ‘lock-in’
21
%
Existing infrastructure investment
16
%
Customisation
16
%
Risk balancing
13
%
Latency
13
%
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Executive summary
Key findings
The future is hybrid
Device management difficulties
Curing IT ailments
Conclusion
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1 2 3 4 5 6 7 8 9 10
There are both business and technical considerations for choosing a cloud or a non-cloud deployment for different workloads.
The most important consideration when deciding whether a workload should be stored on-premises or in the cloud is cost, chosen by 52 per cent, followed by security at 46 per cent.
Running workloads on-premises means investing money in hardware, deployment and software licensing fees, as well as employing the right IT professionals to manage the infrastructure. However, cloud migration can also have high cost of entry and may have high operational expenditure as you scale. Furthermore, workloads that have a high amount of data ingress and egress (which refers to data being moved in and out of the cloud) may result in higher costs as cloud providers charge for moving workloads.
While the decision for where a workload is stored should not be based purely on cost, it is something that organisations should carefully weigh up to avoid being caught off guard by hidden costs further down the line.
Security is another important consideration. While cloud providers offer highly secure services, organisations may still have reservations. Organisations that choose on-premises often feel that keeping everything onsite gives them more control. Furthermore, industry-specific legal requirements and other regulations often have strict guidelines as to where the data is stored and may prohibit the use of public cloud.
Integration with existing systems is also an important consideration when deciding what to migrate to the cloud. As new SaaS applications are added to an organisation’s infrastructure, ensuring data can be transferred between different environments, systems, and applications is a must. Having the right tools to aggregate, integrate, and manage cloud and on-premises services can help alleviate these challenges.
“On-premises computing still has a
crucial role to play at my organisation”
2
%
8%
38%
24%
28%
Strongly disagree
Somewhat disagree
Neither agree nor disagree
Somewhat agree
Strongly agree
“High-performance reliable hardware is crucial to on-prem infrastructure strategy success”
1
%
4
%
40%
21%
35%
Strongly disagree
Somewhat disagree
Neither agree nor disagree
Somewhat agree
Strongly agree
Strongly disagree
Somewhat disagree
Neither agree nor disagree
Somewhat agree
Strongly agree