Many EMEA Organizations Bring Data Back In-House After Turning to Third Party Providers

An Oracle Corp.‘s report entitled Oracle Next Generation Data Centre Index Cycle III reveals that many organisation across EMEA are bringing their data back in-house after a year which saw many turn to the short term support of external, third party providers.

Cycle II of the research, released in January 2012, showed a marked move to the use of external data centre support, attributed to businesses being taken by surprise by a big data explosion.

• Cycle III reveals that organisations are now reversing that trend and bringing their data back into in-house data centres, according to the research conducted by analyst house Quocirca. This ‘big data bounce’ is not only testimony to the increased value of data and the greater focus of business upon it, but also highlights the importance for businesses of being able to move data between public and private cloud as easily as possible.
• On the face of it, overall progress seems slight, but deeper analysis of the research data reveals that there is considerable variation across the region.
• Eurozone countries fare less well than those outside the single currency.
• Sustainability still leads among the issues shaping data centre strategies; and
• Shorter-term imperatives of flexibility of deployment tend to outweigh the longer-term needs of business support in shaping data centre strategies (Flexibility Index is up; Supportability Index is very slightly down)

Some organisations are missing out by not increasing the alignment of IT with the business.

The big data "Bounce"
The proportion of respondents using only in-house data facilities has risen from 45% to 66% between Cycle II and Cycle III:

• Organisations with a single in-house data centre have gone up from 26% to 41% between Cycle II and Cycle III of the research.
• Similarly, the proportion of respondents saying they use multiple in-house data centres only has gone up from 19% to 25%.
• Conversely, the proportion with a mix of in-house and external facilities has dropped from 56% to 34%:
• Respondents with a mix of one in-house data centre plus external support has gone down from 26% to 18%.
• Organisations with multiple in-house data centres plus external facilities have gone down from 30% to 16%.

The percentage of organisations saying they will need a new data centre in the next 12 months has also risen from 22% to 26% suggesting businesses do not foresee an end to the current data boom.

There has also been a decrease in the number of organisations saying they do not see a need for a new data centre in the foreseeable future. This figure has fallen over the course of the three cycles from 17% (Cycle I) to 8% (Cycle II) and now 7% for Cycle III.

Eurozone versus non-Eurozone?
Almost without exception, countries outside the European single currency have improved their scores more than countries inside it.

• Nordics, UK, Middle East and Russia have all made modest improvements.
• Germany/Switzerland, Benelux and Iberia have fallen back (the latter two quite noticeably), and France and Italy have made only slight progress.
• Of the Eurozone countries, only Ireland has made significant progress (a huge increase of 16.7% in its overall Index score).

Organisations are losing value
by not aligning IT with Business
There is a strong correlation between organisations which have closely aligned business and IT functions and those with high Index scores. In other words, those who ‘get’ the need for this alignment see added value through a more sophisticated data centre strategy. This correlation is stronger in Cycle III than ever before.

At the same time, the research indicates no overall improvement in business/IT alignment. So some may have improved this alignment, but many have not. This means that those organisations where the alignment has not improved are missing out on the value that IT can deliver to the business.

Other Variations Across The Region
Overall, EMEA organisations have slightly increased the sophistication of their use of data centres between Cycle II and Cycle III of the research. The overall Index score has gone up from 5.58 to 5.62 across the region – just one percent.

The countries which are most advanced in their data centre investments are the Nordics, the DCH region (Germany) and the UK respectively.

Sustainability continues to gain pace and is the area of the Index organisations score most highly on (5.79), compared to Supportability (5.62) and Flexibility (5.53).

The countries who are most advanced with their sustainability planning are the Nordics, the UK and the DCH region (Germany and Switzerland), though the latter has actually plateaued over the past year.

"Businesses are increasingly working online and with digital products, content, communications and transactions. The avalanche of data which forced many to look outside their four walls for support last year is only going to continue. As such it makes sense that many organisations have used the intervening year to get their houses in order and bring their data closer to the organisation," said Luigi Freguia, SVP, Oracle Systems EMEA. "It is also encouraging to see that organisations have future proofed their data centre facilities, with improvements in server utilisation levels and greater use of virtualisation. However, by using software and hardware engineered to work together, such as Oracle’s SPARC SuperCluster T4-4, and a focus on standards, organisations can build enough flexibility into their IT to enable future moves into private or public cloud if the need arises."

"The latest two cycles of the research seem to have caught organisations between two points," said Clive Longbottom, Analyst at Quocirca. "Cycle II was carried out just as organisations were looking at cloud computing with many projects being carried out using external facilities for development, test and piloting. Cycle III has been carried out at a time when cloud is becoming more mainstream, and many of the pilots are now becoming full run-time projects. It seems that many of these have been brought back in house onto private cloud platforms – and that this has resulted in a rationalisation of facility usage. However, many decisions around the data centre are being made tactically – and this could impact the more strategic capabilities of the owning organisation in the longer term."

In October 2012, Quocirca surveyed 952 managers in large organisations, in 10 countries / regions around the world: Benelux, DCH (Germany/Switzerland), France, Iberia (Spain/Portugal), Ireland, Italy, Middle East, Nordics, Russia, and the UK. The questions were designed such that each answer could be represented by a number between 0 and 10, giving the ability to create the overall Oracle Next Generation Data Centre Index figure. Separate sections of the research were dedicated to Flexibility, Supportability and Sustainability, providing sub-indices in these three important areas.

This is the third time the survey has been undertaken – Cycle III. Previous Cycles were revealed in January 2012 and May 2011.

Between Cycles I and II, the USA was removed from the countries surveyed and Russia and Ireland added. This has affected the overall Index figures. Where these overall figures are compared between all three Cycles, only the figures from those countries common to all sets are included, to ensure that the comparison is valid. This also explains why some overall figures quoted for Cycle I are different from those published in the original research, launched 4 May 2011.

To read the report (registration needed)