What’s driving investment in cloud datacenters?

Globe Telecom new data center in Philippines
The global datacenter market is currently dependent on the construction of innovative datacenter facilities worldwide. Geographical distribution of the market is into APAC, EMEA, and the Americas region.

Major factors contributing in the growth of the global data center market are the investments on cloud datacenter, deployment of big data analytics, growth in IoT sector, and implementation of colocation and managed service data centers.

Investments in cloud data center

Cloud service providers (CSPs) are investing billions of dollars in the cloud datacenters in order to offer cloud-based services like AWS, Microsoft Azure, and Google Cloud, to end-users and enterprises.

Growing SMEs look forward to use CSPs, colocations, and web hosting cloud datacenters for features related to scalability, reliability, and cost reduction. CSPs such as AWS, Microsoft, and Google have roughly 100,000 servers worldwide to meet the increasing business demand, conveys Technavio reports.

Automation of cloud datacenters has also become essential to cater to the market demand. Mega datacenters, known to consume large quantities of power during peak data-intensive operations, have seen many innovations in the design and deployment, recently.

Investments of $38 billion were made in 2015 towards cloud technology, with expectations of $75 billion by 2020 at a CAGR of around 14.57 percent.

Demand for Big data analytics

With industries dealing with large amounts of structured and unstructured data, alongside huge outputs from within a short time etc have fuelled the need for Big data analytics.

The architecture for data generated by a single business application involves several sources. These collected data are of high volume, velocity, and variety. Big data analytics helps to understand this data and make business decisions based on them. The spending on big data infrastructure in datacenters 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.

“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,” reveal Technavio data research reports.

Growing IoT

With the Internet-connected devices expected to touch 30 billion by 2019, uplifting global data center market, the use of RFID sensors to tag, track, connect, and read objects in logistics and warehouses had popularized the concept of IoT in the late 1990s.

With increase in connected devices data blocks will also increase and become bulky. Connected car, connected home, connected health, and smart cities being on the rise, all units such as manufacturing, utilities, retail, automotive, and social media will need IoT for increased data transfer. By 2020, IoT-enabled devices will increase the data center traffic by around 40 times, enhancing the market for the latter by a huge percent.

Need for colocation and managed service data centers

A colocation facility present in an industry will aid much more than an individual data center, as this facility rents computing servers, storage, and network. Power and bandwidth use can be optimized and the security of enterprise IT equipment can be increased. Also, global data center colocation market will grow at a CAGR of around 13 percent during 2015-2020.

The Capex (capital expenditure) associated with building, operating, and updating a data center facility can be cut down with a colocation facility. With several factors affecting the selection a colocation solution, the facilities will help SMEs to operate through modern infrastructure at reduced subscription costs. These facilities are also estimated to rise in this foretold time.

Previously, Gartner had reported that the Indian datacenter infrastructure market will show a 5.2 percent increase to $2 billion in 2016, with the Indian storage market touching $307 million at the same time.

Vina Krishnan
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