Report: Data Center Investments Are Dramatically Reshaping The IT Industry
Cloud infrastructure investment keeps growing.
New data from Synergy Research Group shows worldwide spend on cloud infrastructure services continues to grow at around 50% per year, requiring the leading cloud providers to invest many billions of dollars in expanding their global network of hyperscale data centers. The top four cloud providers alone have some 110 data centers located in 20 different countries, most of which are huge facilities. Synergy expects their data center count to grow by 20% in the next twelve months, which will be in addition to expanding the capacity of existing facilities. Synergy has also identified well over $25 billion in recent data center-oriented M&A deals, with data center specialists like Equinix, Digital Realty, NTT and IBM leading the charge. The need to continually invest in expensive data center facilities is dramatically reshaping the IT industry.
Economics and new technologies are causing companies to radically change the way they choose to support their IT needs, which is driving consolidation and restructuring in the cloud and data center markets. The impact of the changes can be seen in many places:
- The four leading cloud infrastructure service providers are all growing at rates far in excess of the market and are steadily gaining share in a very high-growth market
- Spending on enterprise data center equipment is static while spending on service provider data centers is booming
- ODMs are growing market share and becoming an ever-more important feature of the vendor landscape
- Many of the largest global data center/colocation specialists are continuing to gain market share at the expense of their less focused rivals
- Several leading telcos are reconsidering their strategic options for their data center product lines due to the difficulty of investing enough money and focus on them.
“This is a time of unprecedented change in the IT industry. End users are getting access to flexible and agile IT services that they could only dream about a few years ago and CIOs are pulling back from buying and managing their own data centers. Why do something that is so difficult and so distracting when there are now much better options out there?” said John Dinsdale, a chief analyst and research director at Synergy Research Group. “It’s all change. Companies like AWS and Microsoft are now major players in enterprise IT; IBM is totally reinventing itself; companies like Equinix and NTT are amassing huge data center footprints; while HP and Cisco are aggressively growing their cloud technology business units. We do not expect the rate of change to lessen over the coming years.”
This article was originally posted “Report: Data Center Investments Are Dramatically Reshaping The IT Industry” from Cloud Strategy Magazine.