Cloud-based infrastructure commands industry's attention, but 98% of companies run on-premise server hardware, according to more than 500 IT decision makers, in a Spiceworks survey released Monday.

On-premise servers, like mainframes, are not soon going away.

"Even though a new technology might be the buzzword of the moment, the traditional technology never really went away," said Peter Tsai, senior technology analyst at Spiceworks, in an interview with CIO Dive.

Industry "started with mainframes, then we went to standalone servers and then cloud was a big thing," Tsai said. "Now it seems like we're pulling computing resources back, closer to where they're needed."

IT decisions makers have a number of motives for keeping hardware infrastructure and purchase new infrastructure dependent on refresh cycles. Motivation for purchasing a new server is dependent on company size.

Enterprises buy new servers because of company growth, often making purchases on refresh cycles, according to the report. Small- and medium-sized businesses, however, hold onto servers until the hardware fails or reliability concerns motivate new purchases.

Industry often perceives cloud as a technology savior, but spend is spiraling as businesses struggle with cost optimization and governance. Initiatives — like increased container use and a cloud-first strategy — contribute to increased costs, investments which can catch companies by surprise.

Organizations are not "completely abandoning" on-premise servers, Tsai said. Often, on-prem servers can be cheaper in the long run, "especially if you're going to hold on to them for seven or eight years as we see some organizations doing."

End of life

On-premise technology remains on business technology buyers' roadmaps for the foreseeable future, but end-of-life events can direct investments.

One-third of organizations buy new servers because of the end of life for a server’s operating system, according to Spiceworks, and such a large scale event is on the horizon.

In January 2020, Microsoft is dropping extended support for the popular Windows Server 2008. Support for SQL Server 2008 ends in July.

Microsoft has workloads that sits on physical tin, according to Tony Mackelworth, Head of Microsoft Advisory Services at SoftwareONE. End of life can serve as motivation for companies to engage with rehosting and refactoring their platform.

Almost "every single company in the world is running Windows Server and SQL Server and the majority of that footprint is in extended support," said Mackelworth, in an interview with CIO Dive. A salesperson would call end of life a "compelling event," especially with IT decision makers looking at security and compliance implications, along with the commercial costs of "managing and supporting legacy software on legacy infrastructure."

Even an end-of-life event is not encouraging companies to start planning to use cloud services. One in five companies plan to buy new server hardware in the next six months. And more than one-third of companies plan to purchase new server hardware in the next year.

The impending Microsoft expiration ahead could serve as a pain point for companies to look elsewhere for services.

Microsoft is aggressively driving customers to "upgrade or rehost or refactor" to cloud platforms, Mackelworth said. But with the economics of the cloud, there is no silver bullet tool to enable cloud planning.

If a company is approaching end of life with a server, it does not automatically mean it will switch to a new type of technology or vendor.

"In IT, stability is key, so they might not be jumping ship to a different product," Tsai said. IT decision makers are "primarily concerned about the security implication of running older operating systems and sometimes they're worried about software incompatibility."

Companies "just want to be able to continue to deliver the services that they have today and often that means just updating software to the newer version," Tsai said.