What is IT infrastructure? What does it involve?

IT infrastructure encompasses the hardware, software, networks, facilities, and frameworks essential for delivering IT services across various business units, thereby supporting a company's digital presence. As digital transformation continues to accelerate, organizations are increasingly prioritizing their IT infrastructure, recognizing it as a vital driver of business success. The global IT infrastructure market is experiencing rapid growth, with projections showing an increase of approximately $270.5 billion between 2020 and 2024. This represents a strong compound annual growth rate (CAGR) of 18%, partly fueled by the effects of COVID-19 on IT operations.

Whether it's a small business, a government entity, or a large corporation, every organization requires IT infrastructure to maintain a digitally connected business. For instance, a traditional Mom-and-Pop store might operate without any IT infrastructure, relying solely on manual processes. However, modernizing the business to accept card payments, offer online deliveries, engage in e-commerce, or communicate with customers through platforms like WhatsApp would necessitate investing in IT infrastructure.

In today's competitive landscape, having a robust IT infrastructure can provide a significant advantage. According to Wipro’s State of IT Infrastructure Report 2020, 75% of businesses are upgrading outdated infrastructure to adopt new technologies such as AI, ML, AR/VR, 5G, automation, and blockchain. Additionally, 16% of companies report that their IT infrastructure teams, rather than business unit teams, own IoT-based solutions. As IT infrastructure becomes more complex with the integration of new technologies, sophisticated management tools are required to keep pace. AIOps is already central to infrastructure management for 6% of organizations, with more companies in the pilot stage.

Another key consideration in IT infrastructure is the choice between in-house and managed operations. Small-to-mid-sized businesses, especially those that are not digital natives, might partner with third-party providers to manage their IT infrastructure remotely, with occasional on-site support. In contrast, large organizations and digital-native companies often prefer to host and manage their IT operations internally, using their teams and owned infrastructure. Regardless of the scale or management strategy, an organization's IT infrastructure typically consists of four core components.

Core elements of IT infrastructure

As highlighted previously, any modern organization relies on four essential IT building blocks, each with its own sub-components:

Hardware

Hardware includes all the physical components and equipment necessary for an organization’s IT infrastructure. For a small business like a Mom-and-Pop store, this might consist of just a single PC and a printer. Mid-sized businesses typically utilize multiple PCs, servers for hosting e-commerce or business portals, and additional security devices. Large enterprises often operate extensive technology systems housed in data centers. Managed IT services can offer the option to rent hardware rather than purchase it outright. Key hardware sub-components include:

• Standalone servers
• Personal computers and workstations (laptops, point-of-sale systems)
• Physical routers
• Peripherals (headphones, printers, collaboration devices)
• Data centers or server rooms

Software

Software comprises components that require hardware to function, creating a comprehensive IT environment when combined with hardware. This includes operating systems on PCs, productivity and security applications, and larger setups involving various endpoints. Software has increasingly replaced traditional hardware components, with advancements such as software-based routers, cloud storage, and next-generation firewalls (NGFW). Key software sub-components include:

• Operating systems (Windows, Linux, Mac)
• Third-party productivity, testing, and security applications
• SaaS applications (both desktop and web-based) and perpetual license software
• Custom-built software applications and services
• Cloud and container-based application development and hosting environments
• Software-based utilities (NGFW, routers, ANC software, connectors, APIs)

Networking

Although technically optional, networking has become essential for modern business environments. Without a network, devices would operate in isolation without access to public or private internet. Networking supports many IT functions, including cloud processes, SaaS applications, and over-the-air updates.

Networking involves both hardware and software components, as well as the configurations used to manage network access and security. Partnerships with telecom providers and carrier licenses are also crucial elements of network infrastructure management. Key sub-components of a network include:

• Various cables for connectivity (e.g., CAT 5/6/7, fiber optics)
• Networking appliances (e.g., firewalls, routers, switches)
• Software components (e.g., software-based firewalls, SDN infrastructure)
• Interfaces for network configuration
• Interfaces for managing user access, security, bandwidth, etc.
• Web servers that serve as hubs for networked IT activities

Ultimately, while all infrastructure components can be categorized as either hardware or software, understanding these nuances helps in developing a more sophisticated IT infrastructure.

Types of IT infrastructure architectures

An IT infrastructure architecture determines how IT components are designed and structured to enhance performance, manageability, scalability, and cost-efficiency. Depending on the size and nature of an organization, different IT infrastructure architectures may be employed:

1. Traditional infrastructure

In a traditional architecture, IT components are generally housed on-premises and operate in isolated silos. Companies typically purchase their own IT equipment and software, relying heavily on internal teams for maintenance. This approach is often found in small-to-mid-sized, non-digital native organizations, where various locations might have separate IT teams, and systems across different business units, offices, or regions are not interconnected.

2. Converged architecture

Converged architecture aims to address the fragmentation of traditional systems by consolidating related IT components into a unified hub. This design promotes centralized visibility and connects workflows across applications and processes. Resources are grouped into “resource pools,” which are shared based on priority and business policies. The cloud has facilitated the development of converged architectures by making it easier to centralize and allocate resources.

3. Composable disaggregated infrastructure

A sub-type of converged architecture, composable disaggregated infrastructure utilizes on-premise IT components to create a flexible, virtual-like environment within physical data centers. This approach allows for on-demand resource allocation, enabled by high-speed, low-latency networks that minimize downtime. It is an emerging option particularly suited for large, digital-native enterprises.

4. Hyper-converged infrastructure

Hyper-converged infrastructure also seeks to eliminate silos and enable centralized management, but it achieves this through software components running on a hypervisor. Key elements include software-defined storage, software-defined networking, and the hypervisor itself, which facilitates resource federation across processes. Typically, hyper-converged infrastructure operates with commercial off-the-shelf (COTS) servers.

5. Infrastructure as a Service (IaaS)  

IaaS, valued at $31.61 billion in 2019, is projected to surpass $202 billion by 2027, reflecting the shift away from hardware-intensive IT infrastructure. IaaS provides online services to replace physical computing resources, operating on either public clouds or private virtual machines. Unlike hyper-converged infrastructures, IaaS is managed and maintained entirely by a third party under a subscription-based model, aligning with the "as a Service" (aaS) approach.

6. Infrastructure as Code (IaC)  

Infrastructure as Code is a management method that allows you to handle and manipulate IT infrastructure using software applications or code rather than physical hardware or user interfaces. IaC applies to both hardware and software components, utilizing code to monitor processes, provision resources, enforce security, and execute various management tasks.

7. Cloud-based architecture

Cloud-based architecture is increasingly becoming the standard for hosting IT infrastructure. Organizations can choose to migrate fully to a public cloud, split processes between on-premises and cloud environments, use a private cloud, or adopt managed cloud services. The hybrid cloud approach, combining on-premises resources with public and private cloud solutions, is particularly popular. Key types of cloud-based IT infrastructure include:

• 100% Public cloud: Utilizes providers like AWS, Azure, or Google Cloud.
• 100% Private cloud: Hosts applications, data, and processes on remote servers off-premises.
• Managed cloud: An external IT partner manages the private, public, or hybrid cloud.
• Multi-cloud: Combines multiple public cloud vendors.
• Hybrid cloud: Integrates public, private, and on-premises systems.

Cloud environments support various IT architecture designs, including IaaS and converged architectures. They are favored for their scalability and flexibility, accommodating organizations of all sizes, from small businesses to large, distributed enterprises. Digital-native businesses often utilize converged, hyper-converged, code-enabled, IaaS, and composable disaggregated infrastructures to leverage technology as a core component of their operations. Conversely, traditional architectures remain common among smaller businesses beginning their digital transformation journey.