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50% of Critical Enterprise Applications Will Reside Outside of Centralized Public Cloud Locations

  • Gartner Says 50% of Critical Enterprise Applications Will Reside Outside of Centralized Public Cloud Locations Through 2027

  • Analysts to Discuss Cloud Computing & Data Center Trends at Gartner IT Infrastructure, Operations & Cloud Strategies Conference 2023, December 5-7 in Las Vegas


Through 2027, 50% of critical enterprise applications will reside outside of centralized public cloud locations, according to Gartner, Inc. As cloud computing markets and data center infrastructure evolve, and interest in migrating workloads grows, many enterprises struggle to identify the right partners and solutions.

“Enterprises are beginning to seek placement for workloads that have not migrated to the public cloud,” said Dennis Smith, Distinguished VP Analyst at Gartner. “This represents approximately 70% of all workloads, but the growing number of vendors, technologies and overlapping markets makes it difficult to identify the optimal infrastructure choice for an organization’s unique circumstances and needs.”


There are many options for enterprises seeking infrastructure services for their workloads that now reside on-premises, ranging from vendors’ server virtualization offerings to a full suite of services provided by public cloud providers. To determine appropriate placement strategies, Gartner recommends that infrastructure and operations (I&O) leaders follow three steps.


Evaluate Infrastructure Requirements


Many enterprises are seeking cloud-inspired solutions for existing on-premises workloads, such as business-critical applications and general-purpose workloads. These environments may be virtualized but have limited automation and self-service capabilities due to their custom-made nature.


Enterprises that expand their on-premises environments to be cloud-inspired must ensure deployments address public cloud requirements. Many cloud-inspired and cloud computing solutions also offer hybrid capabilities, where common infrastructure elements and application programming interfaces (APIs) can be deployed both on-premises and in the public cloud.


Embrace Hybrid Capabilities & CIPS


The ongoing need to support workloads that are located outside public cloud regions means that mixed cloud and non-cloud infrastructure will be needed for the foreseeable future.


“Enterprises need hybrid capabilities and always will,” said Smith. “While public clouds deliver many benefits, such as innovation, agility and scalability, their utility can be limited when deployed outside the locations chosen by public cloud providers.”


The market for cloud infrastructure and platform services (CIPS) is significantly changing and has long-term consequences to the future of enterprise IT.


The CIPS market is currently evolving into four separate markets:

  • Distributed hybrid infrastructure (DHI), which address the limitations of a traditional on-premises infrastructure for cloud operating model benefits, providing greater consistency and availability.

  • Strategic cloud platform services (SCPS), which covers the full breadth of cloud services and includes modernizing legacy applications for enterprises.

  • Container management, which covers a range of container management offerings including Kubernetes platforms, cluster fleet management and serverless offerings.

  • DevOps platforms which includes solutions intended to aid continuous integration/continuous delivery.

All of these markets reside outside server virtualization, infrastructure consumption services (ICS) and markets related to data center infrastructure (DCI).


“Enterprises will need to navigate both the differences and overlaps across CIPS markets to choose the appropriate workload placement,” said Smith. “This includes identifying the different personas, clarifying their requirements, across both the cloud-native infrastructure and application developer affinity vectors, and mapping them to the appropriate market.”


Choose The Right Partners and Solutions


I&O leaders need to determine their preference for a vendor with either an inside-out approach, or outside-in. The inside-out approach entails traditional data center vendors that have added cloud services, while the outside-in approach involves cloud providers that are providing on-premises services. Additionally, leaders need to decide whether to follow a cloud-only or cloud-first approach (SCPS market) or adopt cloud more moderately (DHI market)


“I&O leaders can select the correct infrastructure solution by performing a thorough analysis of use cases and identifying the core characteristics and capabilities needed,” said Smith. “This will help determine the appropriate technologies and vendors that align with requirements.”

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