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Surviving the Semiconductor Chip Shortage

A new reason to move to the Cloud

Chip manufacturing: from shortage to crisis


In case you haven’t heard, there’s a semiconductor chip shortage. Its impact is being felt deep and wide by just about every industry globally. An essential component of manufacturing for, well, everything is the computer chip. From the automobile industry, where the semiconductor shortage is driving up the demand for used cars, to the mobile and wireless sectors, which have scarcely recovered since the COVID-19 drove up demand for home technology, the worldwide semiconductor shortage is expected to last until at least the second quarter of 2022.


The result is that large technology companies in the U.S. and abroad are “hoarding” or over-ordering chips, which drives prices up. As a result, smaller businesses are forced to pay higher prices—if they can get chip technology at all—and industries like utilities and power pass that extra cost to the consumer.


Small and medium-sized businesses (SMBs) that store and process their data using physical servers in a bricks-and-mortar space have the most to lose. Many can’t afford the time and money it takes to bring on-premise security up to par. And with little to no access to chip technology, it could become nearly impossible to repair, replace, or upgrade their data centers.


Alternatives to the on-premise data center 


As whole industries struggle to build safety nets around their digital infrastructures, the options feel limited: 

  1. Halt or slow business as you wait in line for hardware (chip technology).
  2. If you’re lucky to be in an industry that is not yet impacted, you can only hope that your server will continue running and that your on-premise data center will not need repairs, replacements, or upgrades.
  3. Move some or all of your mission-critical applications and workloads to the cloud.


Why move to the cloud?


If you're not already leveraging the Cloud, now is the time to make the switch. A new study shows that 94 percent of mid-sized essential businesses in the U.S. are moving to the cloud this year, up from 25 percent that prioritized a cloud strategy in 2020. This trend will likely continue in the coming years, as 46 percent reported lower costs with cloud computing. The benefits of cloud computing and cloud storage are many and well-storied: 

  • Lower cost — Unlike on-premise data centers, the cloud delivers a pay-as-you-go cost structure. Plus, there’s no need for upfront investment in costly equipment. 
  • Scalability — Organizations of all sizes can scale their operations up or down as their business circumstances change. The pay-as-you-go model means that, unlike traditional data centers, there are fewer costs to making those changes.
  • Flexibility — Firms can free up resources (financial and human resources) for deployment to other areas. 
  • Mobility — Employees can log on anytime, from anywhere.
  • Security — The cloud delivers improved security via encryption, multi-factor authentication, and 24/7 monitoring. According to Gartner estimates, service workloads in the cloud suffer at least 60 percent fewer security incidents than those in traditional data centers.
  • Resiliency — Backing up to the cloud is more resilient than an on-premise backup solution.


A Hybrid cloud strategy: it doesn’t have to be either-or


Different businesses have different infrastructure needs, and the traditional data center is unlikely to go extinct any time soon. There may be workloads or legacy systems that you need to keep on-premise for different reasons, e.g., compliance or delivery models. Thirty-six percent of companies deploy a hybrid infrastructure, a strategic blend of private and or public clouds with on-premise data centers. A hybrid cloud strategy is now essential for survival and continued growth in today’s competitive business environment.


The key to developing hybrid success is making the right decisions upfront regarding which functions and workloads stay on-premise and which ones move to the cloud. Then, a reputable managed service provider (MSP) can work with you to make those decisions and provide many other services. 


Still don’t have enough reasons to move your company data to the cloud? Cloud migration is easy with the support of a qualified MSP, so you could make this a temporary move until the semiconductor chip shortage passes. But beware: before you choose cloud as merely a short-term solution, keep in mind that many data “storms” are on the horizon. Existential data threats, from hardware failure and cyberattacks to human error and weather disasters, can be mitigated with cloud-based data protection and recovery

Need help going cloud? Call the experts at TBNG today.


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