Cloud services, IoT driving data center market growth

Thursday, August 25, 2016

LONDON—A new report from Technavio forecasts the global data center market to grow at a CAGR of close to 11 percent during 2016-2020, driven by increased spending on cloud data centers, growing IoT and increased use of big data analytics.

The enterprises spending on cloud data centers, which was $38 billion in 2015, is expected to reach $75 billion by 2020 at a CAGR of around 14.57 percent, according to the report.

Many cloud service providers (CSPs) construct cloud data centers that cost up to billions of dollars to offer cloud-based services to end-users and enterprises. These CSPs include AWS, Microsoft Azure, and Google Cloud.

Growing SMEs prefer to run their business operations through CSPs, colocations, and web hosting cloud data centers due to benefits such as scalability, reliability, and cost reduction. CSPs such as AWS, Microsoft, and Google operate more than 100,000 servers worldwide to meet the increasing business demand.

The spending on big data infrastructure in data centers was valued at around $15 billion, and it is expected to grow to $25 billion by 2020, growing at a CAGR of 10.76 percent, the report said.

Rakesh Kumar Panda, a lead analyst at Technavio for data center research, said in a prepared statement, “Big data analytics facilitates faster analysis and better utilization of computing resources. For predictive and consumer analytics operation of big data sets, enterprises are procuring high-performance computing infrastructures in data centers. Big data infrastructure spending includes compute, storage, and network and infrastructure software.”

In the area of IoT, the study found that the number of Internet-connected devices is estimated to reach around 30 billion by 2019, which will give a major boost to the global data center market. By 2020, IoT-enabled devices will increase the data center traffic by around 40 times.