Servers Purchased Today Will Not Be Replaced

In the spirit of paradigm shifts, here’s one to think about.

Servers that are purchased today will not be replaced. Servers have a useful lifespan. Typically that ranges in the 3-5 years depending on their use. There are a number of factors that contribute to this. The cost to operate the server grows over time and it becomes less expensive to purchase a new one. The performance of the server is not adequate for newer workloads over time. These (and others) contribute to the useful lifespan of a server.

At the current adoption rates of cloud-based services, said servers will not be replaced. But rather, the services provided from those systems will move to cloud-based services. Of course there are corner cases. But as the cloud market matures, it will drive further adoption of services. Within the same timeframe, when existing servers become obsolete, many of those services will move to cloud-based services.

This shift requires several actions depending on your perspective.

– Server/ Channel Provider: How will you shift revenue streams to alternative offerings? Are you only a product company and can you make the move to a services model? Are you able to expand your services to meet the demand and complexities?

– IT Organizations: It causes a shift in budgetary, operational and process changes. Not to mention potential architecture and integration challenges for applications and services.

These types of changes take time to plan and develop before implementation. 3-5 years is not that far away in the typical planning cycle for changes this significant. The suggestion would be to get started now if you haven’t started already. There are great opportunities available today as a way to start “kicking the tires”.

Tim Crawford is ranked as one of the Top 100 Most Influential Chief Information Technology Officers (#4), Top 100 Most Social CIOs (#7), Top 20 People Most Retweeted by IT Leaders (#5) and Top 100 Cloud Experts and Influencers. Tim is a strategic CIO & advisor that works with large global enterprise organizations across a number of industries including financial services, healthcare, major airlines and high-tech. Tim’s work differentiates and catapults organizations in transformative ways through the use of technology as a strategic lever. Tim takes a provocative, but pragmatic approach to the intersection of business and technology. Tim is an internationally renowned CIO thought leader including Digital Transformation, Cloud Computing, Data Analytics and Internet of Things (IoT). Tim has served as CIO and other senior IT roles with global organizations such as Konica Minolta/ All Covered, Stanford University, Knight-Ridder, Philips Electronics and National Semiconductor. Tim is also the host of the CIO In The Know (CIOitk) podcast. CIOitk is a weekly podcast that interviews CIOs on the top issues facing CIOs today. Tim holds an MBA in International Business with Honors from Golden Gate University Ageno School of Business and a Bachelor of Science degree in Computer Information Systems from Golden Gate University.

3 comments on “Servers Purchased Today Will Not Be Replaced

  1. has external cloud computing reached a price point that it’s affordable to move that many services away from even an internal cloud? I haven’t done the math yet across our entire infrastructure, comparing our bandwidth with transaction needs, etc, but doesn’t using EC2, for instance, eventually reach a point where it’s the same price to run them yourself vs. via the cloud? Even considering headcount (or perhaps at least change in jobs that come from reduced overhead from a shift to the cloud)?

    Has there been research on how all of these variables come together or case studies out there?


    • It depends on the service, provider and your internal cost structure. But the short answer for many is yes. When you reach critical mass where the economies of scale for your operation reach that of a public provider, you are limited in options. In those cases (and others), private clouds make sense.


  2. Very thought provoking point, but I still think that the big companies will be buying servers in 3 more years. There is still that pesky security issue which although has gotten better in the last couple of years, is still not solved and may never be. As Tim pointed out in the post above, it is an economies of scale issue. If you run a virtualized environment that is large enough, it will always be less expensive to run it in house. Today, large banks and financial organizations, defense contractors, and insurance companies are holding on to their internal servers and have no plans to migrate to the cloud.


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