Tag Archives: infrastructure

Cloud: How It Changed Itself, and Us

Today’s cloud environment has picked up steam from a “customer acceptance” point of view: customers are adopting cloud in general at a much faster rate than we had expected them to. We no longer pitch cloud — our clients ask us about it. And, while cloud has been a boon for many, it’s important to remember that new technologies can come with a set of challenges that are shifting the telecom and IT markets in various ways.

Cloud Evolution

Cloud started on the email side with products like Office 365, then moved into phone systems with hosted technology; now we get questions about moving servers to the cloud. The transition from email to phone to infrastructure was rapid, and all three are still growing. From the transformation of backup (moving from tape to cloud) to the developments from giants like AWS, cloud is an ever-evolving beast. And we expect to see more in the way of private cloud infrastructure in the future.

Price Erosion Forces Change
Price erosion on connectivity and network deals is a big concern in the telecom world these days, and cloud offers the opportunity to pivot and go deeper with customers by offering more solutions. But it’s important to call out our experience here at SinglePoint in this regard: we have not felt the effects of price erosion the way we thought we would because the need for bandwidth has kept up with the erosion.

Where we were selling 10 Mbps, we now sell 100 Mbps. Where we were selling MPLS, we are now selling SD-WAN. While pricing does keep going down, market trends have pushed us to rethink our partnerships and our sales model as well as to adopt and use cloud as a product. It has forced our hand to move more into IT from the pure telecom sphere we used to work in, and we have made partnerships in order to conduct IT risk assessments and build upon private cloud architecture.

Cloud Changes the Market
There have been continual mergers and acquisitions across carriers, and as the big get bigger, we have fewer and fewer providers. Now, we see all these new providers coming up; not as carrier services, but as cloud companies and hosted phone companies. Where there used to be 50 CLECs, there are 100 new hosted phone companies and hundreds of new SD-WAN companies. As they come out of the woodwork, we see cloud changing what businesses are offering.

What’s in Store
In 2015, our core carrier products (internet, MPLS, voice services, etc.) were 90% of our sales. In 2016, 40% of our sales were non-traditional telecom products such as cloud systems, hosted contact management solutions, hosted phones, cloud-based architecture, and cellular. That huge shift tells us to expect more change, and to think ahead about our offerings.

Cloud Technology Provides Opportunity for Data Centers to Reorganize

The days of major data center expansion are numbered. That’s what a recent survey by 451 Group’s Uptime Institute indicates may be the result of increasing traffic in the cloud. Companies are no longer stretched thin at their data centers, but are instead looking for ways to reorganize them now that the cloud is relieving storage space problems.

The survey included a variety of executives from traditional enterprise companies, including IT directors and facilities managers from retailers, banks, and manufacturers. Here are some of the key findings about how data centers are being impacted by increasing cloud software and storage investments:

The shrinking isn’t proportional: The expansion of cloud technology and investment in software in the cloud has resulted in companies feeling a bit of relief in their data centers. Storage options available in the cloud mean that IT departments may experience a little less push to keep expanding data storage. In most cases, however, this relief is not experienced at the same pace that cloud investment is growing.

Capacity planning is still a big investment: Almost half of the respondents responsible for facilities were working on upgrading infrastructure, cooling infrastructure, and improving power availability as part of their capacity planning strategy.

New data centers are still springing up: 30 percent of respondents were involved in plans to build new data centers.

Getting more out of existing data centers: While many companies are using third-party vendors to handle increasing demand for data storage, they are also focusing on improving support for existing on-site systems. An IT director is no longer seeking out a $50 million investment in a data center, but is instead asking for smaller amounts to improve the data center that’s there. In most cases, it’s turning out to be easier to get approval for investments in supporting and protecting the legacy technology.

IT teams work with various solutions to handle demand for storage: The survey revealed that 40 percent of respondents will work to consolidate servers in the next year and 33 percent will deploy additional workloads to the cloud. Thirty-three percent of respondents say they will update or upgrade their existing physical infrastructure.

While the cloud provides solutions for a wealth of processing and storage challenges, companies are recognizing the need for continued investment in on-site resources. Cloud storage provides much-needed relief for over-stretched data centers and allows IT teams to focus on improving support and security for their legacy systems.

Want to know more about how cloud is affecting the data center? Check out MicroCorp’s Data Center Market Report library for industry expertise.

To learn more about how the cloud is impacting the IT practices of individual companies like yours, talk with our specialists at MicroCorp, experts in cloud, connectivity, and communications.