The End of Data Centers by 2020? Hold That Thought

Joe McKendrick
Insurance Experts' Forum, January 27, 2014

The data center only has six years to live.

That's the prediction of Silicon Angle's David Coursey, who points out that “the cost of maintaining a data center is rapidly becoming more than what it would cost to outsource.”

The cloud will be replacing on-premises data centers en masse over the next few years. Coursey observes that there is little to no reason for companies to support their own servers and storage arrays. Plus, the allure of cloud and virtualization is too strong to resist:

“Once you’re virtualizing, it is only a matter of time until the light bulb of 'we can virtualize anywhere' goes off over someone’s head. That’s when plans start being made for what happens to the space where the data center now resides. And that’s the beginning of the end of the data center as we know it.”

There are plenty of companies that will continue to hang on to their on-premises applications, Coursey adds. They may have unique mainframe applications that the cloud can't replace — yet. This is certainly the case within the insurance industry, where mainframes are still at the core of many policy administration, claims management and underwriting systems.

As on-premises data centers fade from the scene, they will be replaced by “a collection of switches, gateways, wireless LAN and some sort of backup for the Internet connection the company relies upon to reach the cloud,” Coursey says.

While Coursey's predictions make sense, it's important to remember that many similar predictions over the years have not kept pace with the realities on the ground. For example, predictions of the mainframe’s demise did not pan out, as the machine evolved from a proprietary big box to an open server architecture that supports multiple operating and cloud systems. It's likely that data center offerings also will evolve to cater to organizations that need on-premises footprints, perhaps with a hybrid cloud type of facility.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

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