This is going to be a year of change as businesses look for more efficient ways to procure and manage IT, freeing up the time and money needed to focus on innovation.

Organisations are tired of managing technology in-house, particularly servers, leading to a shift towards IT outsourcing. Two recent reports from Gartner highlight that ”the future of IT lies outside the IT department” as business demand for IT-driven growth and innovation drives the need for a different skill set, and “virtualisation and cloud computing will transform IT in 2010”.

In line with this demand for reducing IT costs and increasing innovation that will ultimately drive market share, there is a growing trend towards Computing-as-a-Service models, such as software-as-a-service, cloud computing and hosting.

This enables companies of all sizes to buy computing capacity on a pay-as-you-go basis, being charged only for what they use, without up-front capital cost, and freeing them from the shackle of the server.

Gartner estimates that 44m servers are in use worldwide and the great majority of these are deployed internally. New business models mean that instead of purchasing, maintaining, and upgrading these servers, businesses can simply consume computing resources from service providers.

A new era of computing

The business case for this consists of zero capital expenditure and minimal incremental headcount. It also takes away much of the risk from projects, since the responsibility for delivering the overall solution is given to service providers.

Computing-as-a-Service is going to become the mainstream delivery architecture for corporate computing in the next two years, transforming IT departments by bringing flexibility, security, performance and resilience to a function that has traditionally acted as an inflexible monopoly.

Cloud computing, an element of this “no more servers” approach, is currently being used to deliver both new and existing applications. As more solutions are delivered ”cloud ready”, buying and deploying servers in-house no longer makes business sense. For revenue-generating applications, risk can be reduced still further by building the IT infrastructure wholly or partially in the cloud.

Computing-as-a-Service can be used in many different ways – it can be a combination of a cloud infrastructure and dedicated servers, enabling companies to benefit from the flexibility and cost savings of the cloud, but also the increased security and stability of managed hosting, depending on the needs of the business.

Innovate to get ahead

Since the mainframe, innovations continue to extend the availability of computing capacity to more businesses. Each development also increases the amount of computing resource available to business, while driving down costs.

But adoption of “new” approaches is often slow. In part this is due to businesses demanding a return on their past investments before adopting a new approach. The larger the firm, the larger the sunk cost, which means the later the adoption.

This is why the first beneficiaries of each new computing innovation are typically smaller companies because they have less legacy equipment or bureaucracy stalling progress.

And as larger enterprises outsource more, there will be fewer systems to depreciate, decommission, or cling to in the hope of ROI, thus fuelling the process.

This year will see businesses demand more from their service providers, as a “No More Servers” approach must come hand-in-hand with excellent customer service and support.

Those joining the revolution, from small businesses to enterprises, will be empowered to achieve unprecedented productivity at minimal costs. In an ever-increasingly competitive market, what business couldn’t benefit from this?

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