If you’ve been listening to industry chatter, then you’ve probably heard murmurs about the death of the data center. Although these claims are quite provocative, you don’t need to beeline to your closet to pull out your funeral clothes just yet — the data center is by no means dead.
As long as workloads need to be processed, data centers will never be dead. Even if the industry were to evolve into 100% workload processing via virtual machines in the cloud, there will still be data centers anchoring our applications. And until the millennials fully take over the IT processing at organizations, there will always be on-premises servers churning.
It’s true, compute loads are moving into Amazon and Microsoft facilities because cloud computing delivers flexibility, speed, and scalability while providing an alternative to committing the large amounts of capital investment required to support an on-premises data center. These massive cloud services are growing at an unprecedented rate; for example, at the end of January 2019, Amazon reported that Amazon Web Services (AWS) reached $7.43 billion in the fourth quarter. This growth underscores the fact that cloud, aka data, centers are crucial to Amazon’s success and are not going anywhere. In fact, operating income for AWS in that same quarter was $2.18 billion, exceeding the $2.09 billion estimate. In addition, the web services division accounted for 58% of Amazon’s overall operating income. By contrast, Microsoft said its revenue in the second quarter of fiscal 2019 increased 12% year over year to $32.5 billion, and operating income hit $10.3 billion — an 18% increase.