By 2025, Gartner estimates that 80% of businesses will have decommissioned some or all of their on-premises data centers and moved operations to the cloud. This is a significant shift considering how much businesses have invested in data centers over the years. But when you consider the growing costs of data centers – on the business, its customers, the environment – it might seem surprising that more haven’t left them already.
In fact, most businesses have already adopted some form of cloud computing, recognizing the tremendous value it can bring. Moving applications to the cloud can help reduce a company’s carbon footprint while increasing flexibility, allowing the business to easily scale up and down as needed. It can increase accessibility for developers, fostering collaboration and innovation, and cut costs, switching spends from CapEx to OpEx.
What many companies may not know is that by monetizing their data center exits they can also make money by switching to the cloud, offsetting the upfront costs that may be standing in the way.
The Costs of Exiting a Data Center
There are a lot of logistical and financial hurdles to exiting a data center. Companies may be contractually bound to their facilities and face high penalties for early termination. Hardware must be decommissioned in accordance with regulations to avoid fines. And what are companies to do with this equipment afterward? Is it possible to recoup their expenses? Addressing all these concerns can take time, but the longer businesses wait to exit their data centers, the more pressure they may feel to make the switch to get ahead of the curve, resulting in rushed timelines, missed opportunities, and more avoidable expenses.
Meanwhile, the business must also transition its applications from the data center to the cloud – a tremendous task that is often more complex and time-consuming than companies anticipate. The dreaded double bubble scenario, in which businesses find themselves stuck, mid exit, between the data center and the cloud, is an unfortunately common occurrence. Businesses underestimate the complexity of exiting a data center and assume their internal IT teams are the best ones to manage the shift. As the project progresses, applications become more complex, the data sources get harder to trace, and the project stalls out, increasing costs, decreasing efficiency, and exposing the company to security risks.
A hasty data center exit can be more trouble than its worth. It also paints a misleading picture of legacy modernization, suggesting that moving from data centers to the cloud is an expensive, time-consuming project likely to severely disrupt business operations before showing returns on the investment. But with proper planning and a monetized exit strategy, businesses can essentially get paid to make the best decisions for the organization.
Monetizing Your Data Center Exit
A monetized data center exit strategy is one that pays companies for things like hardware and facilities. These programs free companies to start exiting their data centers and provide an immediate influx of funds so they can do so more confidently. For example, the company avoids the double bubble by working with an exit partner that specializes in data center exits to strategize the shift, liquidate any legacy assets, and seamlessly transition the desired applications to the cloud.
Monetizing the data exit also frees companies to set their own timelines, helping them avoid hasty decisions that might set them back. Being bought out of their leases frees companies from the pressure of falling behind their competitors while waiting for the terms to end, and the additional funds up front can help satisfy the demand for quick return on investment. Some exit partners will even be able to work with companies to design interim capabilities that ease the transition from data centers to cloud. These interfaces are not officially the cloud, but they’re more cloud-like than data centers, and they allow the modernizing company to begin reaping the benefits of a hybrid cloud program while they strategize the best path forward.
Monetize and modernize programs, for example, buy businesses out of their existing contracts and legacy assets, and immediately set them up with a cloud-like infrastructure, making the company asset-light and cloud-like from Day One. Such programs are a collaboration between the strategic partner and the client, along with leading cloud service providers (CSPs), original equipment manufacturers (OEM) and hosting partners. These organizations work together to help the client safely decommission and sell its legacy assets, then combine those funds with additional investments from the partners to finance a stronger cloud modernization program and eventually reach a hybrid cloud state.
Through such programs, businesses are also able to set their own pace for modernization, which is tremendously beneficial. Rather than rush into a one-size-fits-all approach that may not actually fit the business, the client works with the strategic partner to devise a strong exit strategy in line with its immediate needs and long-term goals, then phase out implementation appropriately. This extra time to strategize helps ensure a more successful, efficient data center exit. At the same time, the business is already experiencing some of the benefits of IT modernization – such as an automation layer and enhanced user services to improve efficiency – by being cloud-like from the start.
Programs like these empower businesses to start making the changes they need to grow stronger, smarter, and more sustainable. Faced with rapid innovation and near-constant industry disruptions, businesses need to be able to adapt. Exiting their data centers for the cloud is an important first step, and with the right guidance it can be a successful, seamless transition.