How 2024 GenAI investment will transform data centers

1. Expect a 50% or more uptick in adoption of on-premises as a service in 2024

Our research has shown that on-premises data center options as a service -- where a service provider owns the hardware and handles installation, maintenance, networking and other aspects of running a data center -- transform an organization's ability to accelerate its operations and reduce its total cost of ownership for on-premises infrastructure.

Despite these advantages, adoption is hampered by internal accounting requirements and budget restrictions. In this way, organizations have allowed their own internal bureaucracies to waste money and hinder internal digital initiatives. Generative AI is the initiative with enough priority and visibility to enable organizations to be more receptive to options for on-premises as a service and their ability to simplify design and accelerate deployment. Multiple options for on-premises as a service that can accelerate generative AI projecting are in the market already. Examples include services from Dell Technologies Apex and HPE GreenLake.

2. Cross-cloud consistency will become table stakes in 2024

Hybrid cloud is the standard operating model for the foreseeable future. According to another recent ESG study, "Multi-cloud Application Deployment and Delivery Decision Making," 98% of organizations have applications with individual components distributed across multiple cloud locations on and off premises.

Distributed applications come with increased layers of complexity, however. This complexity is only growing. With generative AI initiatives encouraging organizations to evaluate their extended data environments spanning multiple locations, decision-makers will focus investment on tools and technologies that can deliver a consistent experience across on- and off-premises environments.

Data and infrastructure management tools and practices need to be consistent. Products include options from VMware, Nutanix and RedHat. In addition, Dell Technologies Apex Cloud Platforms can deliver a Microsoft Azure, VMware or Red Hat experience on-premises as a service. For storage, Hitachi Vantara recently announced VSP One, a product designed to provide cross-cloud storage consistency.

3. On-premises modernization will focus on hyper-consolidation in 2024

Until recently, the ever-present concern among IT organizations was how to keep pace with the rapid growth of data. Now, innovative storage technology has become so grand that keeping pace with data growth is less of a concern for the typical organization. Simultaneously, challenges with managing and placing that data, and simplifying and automating associated data services are becoming a larger issue. In other words, simplicity has become a higher priority than scalability for the typical organization.

With organizations already motivated by their generative AI initiatives to invest in low latency, modern storage environments, I expect those architecture investigations to expand deployment decisions to support a wider range of applications beyond AI. 

Recent innovations, such as those from Pure Storage with its FlashArray//E series, and NetApp with its AFF C-series, are helping drive down the cost of supporting widescale consolidation efforts. While those technologies are not targeted specifically at AI workloads, I expect that to begin as storage modernization initiatives to support generative AI uncover opportunities for larger-scale consolidation. The adoption to all-flash will increase across all workloads, not just AI. 

Focus on the data center

Over the past several years, the focus of data and applications has been the public cloud. For 2024, I predict that the widespread interest in generative AI will turn people's attention back to the data center. There has been tremendous innovation in on-premises infrastructure offerings over the past few years. I expect generative AI to be the catalyst that encourages organizations to reevaluate their modernization approaches to maximize the value of their data moving forward.

Scott Sinclair is a Practice Director at TechTarget's Enterprise Strategy Group who has a proven track record in the storage industry. Scott uses his understanding and experience investigating new technologies and designing business strategies for Fortune 500 technology companies to solve problems for his clients.

Enterprise Strategy Group is a division of TechTarget. Its analysts have business relationships with technology vendors.