On-premise servers are here to stay

A new report highlights that almost all businesses still run on-premise servers and just shy of two thirds plan to upgrade their on-premise hardware in the next few years. But with so much hype around virtualisation, why is on-premise still considered so vital?

Despite growing adoption of IaaS technology, 98% of businesses still run on-premises server hardware and 72% of businesses plan to purchase new server hardware within the next three years. This is according to Spiceworks' 2019 State of Servers report, which discovered that servers will account for 12% of business' hardware budgets this year.

While there has been an unmistakable move towards the cloud, on-premise server hardware continues to be vital to businesses, with the vast majority of respondents planning to purchase servers for the foreseeable future, even if they're also venturing into virtualisation.

"Research shows that physical servers are still vital to the overwhelming majority of organisations, and for good reason," says Peter Tsai, a senior tech analyst at Spiceworks. "Businesses still need to purchase physical servers to run virtual machines on premises. Also, cloud infrastructure is not a perfect fit for all workloads due to potential challenges - such as latency or lack of connectivity, loss of control, security concerns, legacy systems and cost."

Russell Smith, a Solution Architect at Pulsant, agrees, adding that the choice to go on-premise often has to do with particular requirements around interoperability as well as supporting a long-term investment structure.

"As an example, businesses with an automated factory line or manufacturing process will be tied into hardware that has been accredited to support these processes. Hardware vendors will have most likely gone through extensive testing and certification to ensure that the hardware will operate with particular third-party systems," he says.

He goes on to say that in some circumstances virtualisation simply may not add any value.

"SAP HANA is an example of this as it consumes a significant amount of memory and CPU power in large applications. Normally, any minor inefficiencies in a virtualisation environment are secondary to the flexibility it provides. But, in this situation, the consistency of database performance is compromised too far. In this case it's the physical hardware which provides a highly predictable and repeatable baseline of performance on which a customer's application or database can depend."

On-premise server hardware purchase drivers

The report notes that the top factors driving businesses to purchase new on-premise server hardware includes company growth, in addition to performance degradation and maintenance costs related to existing hardware. OS end of life is also playing a role in purchasing - for example, many of those questioned cited the January 2020 Windows Server 2009 end of service date as a key driver.

Furthermore, many believe the focus around data governance and security that has grown off the back of GDPR and other data privacy laws is also pushing many companies to store more data on-premise as a safety precaution.

"Whilst there has been a shift towards cloud storage, the fear factor of entrusting company or customer data to an off-premise data centre has bolstered the purchasing of new server hardware for companies towing the line of regulation," says Fredrik Forslund, Blancco's VP Enterprise and Cloud Erasure Solutions.

Hybrid cloud - the preferred model

Many consider on-premise servers here to stay, as the preferred virtualisation model being adopted by business is increasingly hybrid cloud. A recent Apptio survey highlighted that IT leaders believe the ideal mix is 30% on-premise to 70% cloud.

"Therefore it makes sense that companies are investing in new servers to support their on-premise infrastructure, as they recognise that this is not something that should be left behind or dismissed in the push for digital transformation," says Henrik Nilsson, VP EMEA at Apptio.

SSD adoption

The Spiceworks' report also looked at emerging trends around server technology. One of the shifts noted was a higher adoption of SSDs in servers. The report showed that 62% of businesses currently used SSDs in their on-site servers today and that is expected to increase to 72% by 2020.

Recent advances in solid-state storage technology has resulted in SSDs becoming more durable and reliable, providing businesses with a faster response time and improved energy efficiency, making them better suited for use in the server room. Also, steadily falling prices have made this once cost-prohibitive technology affordable to the majority of businesses.

"They simply offer more performance," says Smith. "Also, the price per gigabyte has fallen to about 60% of the cost when compared to 18 months ago."

HCI to hit the mainstream

Don't expect on-premise server hardware to go away anytime soon, but do be prepared for even more specialisation of hardware going forward.

According to Spiceworks' report, hyperconverged infrastructure (HCI) is poised to go mainstream. Tsai says that HCI offers the promise of simplifying IT, thanks to a single, integrated solution that combines server, storage, networking and virtualisation technology. And while hyperconverged solutions typically cost more than buying infrastructure a la carte, 46% of organisations plan to use HCI by 2020 - up from 38% currently - leading him to believe that many companies are sold on the benefits of hyperconvergence.

HCI's popularity is a function of time, as it takes significantly less time to design, procure, provision and test a platform in a converged or hyperconverged system when compared to a traditional infrastructure.

"Also, these systems will be available from one vendor who will guarantee that it has been tested and works flawlessly with the hypervisor or operating system stack that you need," says Smith.

This leads to savings on IT resources as well as quicker troubleshooting, more robust support channels and as a result less time and money spent ensuring the reliability of your infrastructure.

"It's very appealing to business in a position to take advantage of it," Smith points out. "Converged and hyperconverged infrastructures are designed from the ground up to support virtualisation platforms and are therefore the perfect fit for an organisation with private, dedicated needs.

"For specialised tasks, servers have never had a better range of features, meaning that they can be rolled out to specific locations for specific jobs. This might be running control systems on oil tankers which to travel around the world, to supporting low latency, high-frequency requirements on trading floors in the heart of the city," he concludes.