Riding the Server Consolidation Wave

We may be at the start of the hype cycle for artificial intelligence, but the cloud computing market is already mature. In fact, many customers are now considering how to balance their on-premises and cloud estates, and whether consolidation by moving to cloud makes strategic sense given their broader business goals.

Some 95% of customers use some kind of cloud service, and 42% have a "cloud first" approach, with the other half adopting a hybrid strategy, according to the Cloud Industry Forum (PDF). Given technology-refresh cycles, a large proportion of midmarket organisations have a mix of on-premises and cloud infrastructure. After all, most companies purchase the right environment for their needs at a certain time and revisit it when the refresh cycle comes around, rather than doing regular, holistic reviews.

However, consolidation isn't a silver bullet. While 63% of customers may be in the process of consolidating their cloud estates, according to environmental, social and governance (ESG) research, consolidation and IT refreshes don't necessarily result in better efficiency. Consolidation only delivers ROI when the new infrastructure is well-designed and fully utilised. Modern, poorly utilised infrastructure, for example, is much less efficient than an old but highly utilised one.

Many customers are battling a skills gap. The channel can add value in supporting organisations with consultancy, know-how and smart vendor choices, helping them to understand the benefits that hybrid cloud can offer and how to "right-size" environments to make the best possible long-term choice that will also serve them in the present day.

Despite the market's maturity, customers have lingering concerns about cloud, with security, cost and sustainability topping the list.

Cloud Concerns

Are cloud services secure?

At face value, consolidating servers and even data centers by moving to the cloud is worthwhile, particularly for larger organisations with tendencies toward sprawl. However, many customers are concerned about security: keeping servers on-site gives a feeling of psychological safety.

However, cloud systems often give better security than customers can provide themselves — cloud providers usually have more on-site experts and specialised security knowledge. Customers also benefit from economies of scale: cloud providers have to secure large numbers of servers and have enterprise-grade policies and technology at their fingertips. In fact, according to the Cloud Industry Forum, 66% of customers believe that using cloud makes organisations intrinsically more secure.

Can cloud services really reduce costs?

There are some very straightforward benefits to consolidating servers using cloud services. A smaller physical estate lowers building and maintenance costs — fewer technicians are needed to perform the same routine admin on cloud servers, rather than having staff at multiple locations doing similar work. The inherent scalability of cloud also means cloud services can be consumed when needed, rather than having to run on-premises services all the time.

Can cloud services reduce carbon emissions?

Servers use power, and consolidating data to newer equipment can not only boost how many application instances run on one physical server, but also boost customers' sustainability credentials. At a basic level, rather like planes, data centers are more efficient when they're fully loaded. A single server running in a customer's premises is unlikely to be running as fully and efficiently as possible, whereas a cloud provider can scale instances up and down dynamically.

In addition, cloud providers are also responding to pressure to be transparent about their power consumption and sustainability credentials, offering more environmentally friendly products. Again, because they need to do this at scale, their responses are often more impactful than anything customers can do by themselves.

Channel Opportunity to Add Value: Planning and Execution

There are two broad areas where the channel can add value to customers considering consolidation — consultancy in the planning stages, and technical implementation.

As we've said, despite cloud's relative maturity, many customers will have long infrastructure-refresh cycles and may have made significant investment in on-premises servers. Helping a company decide how and when to move applications to the cloud is an opportunity to build not only considerable value but also a long-term business relationship.

Planning and consultancy encompasses the entire life cycle of the project. That runs from understanding and helping to set the vision and strategy, governance, establishing the road map, adoption management — including training and feedback — to auditing success later on and managing renewals.

This is highly skilled work. Consolidation isn't a one-size-fits-all; every customer technology estate is different. Customers in more highly regulated sectors such as health care or the public sector will have their own rules and regulations about cloud providers, data center sites and data handling, so resellers and integrators must be careful to understand the specifics.

A comprehensive evaluation process is vital before planning the consolidation project and should also include an understanding of how the broader business operates, ultimately respecting business operations, right down to choosing dates for the consolidation where disruption won't be critical to the business.

This consultancy will be directly tied to the actual migration process. There will be an element of governance and setting best practice at the start, including onboarding, but the bulk of the work will be in defining and managing the actual migration, including strategy, establishing dependencies, resilience, backup and disaster recovery. Similarly, aspects such as network, cybersecurity, automation and product life cycles will need to be considered, alongside feedback on products and user awareness. Each of these areas is a job function in its own right and may involve a number of other third parties and specialists.

Into the Future

Most customers understand that consolidation projects don't happen overnight. With the right due diligence, consideration and planning, not to mention choosing the right vendors and executing migrations carefully, channel partners can not only complete highly lucrative projects, but also drive themselves up the value chain, building long-term relationships that keep on giving.

As a final consideration, these kinds of projects can also support customer sustainability initiatives, helping them move to greener, more efficient technology environments. In this way, the channel can support a more efficient, greener technology industry as a whole.