Worldwide data centre hardware and software spending set to reach over $93bn to end the decade
Annual spending on cloud infrastructure services has gone from virtually zero to almost $100bn, but spending on data centre hardware and software has been stagnant.
Data centre spending did spike in 2018, but despite the increase, growth in cloud spending did not miss a beat in 2018 and then grew again by almost 40% in 2019, according to a review by Synergy Research Group of enterprise IT spending over the last ten years.
Over the whole decade, average annual spending growth for data centre was 4% and for cloud services was 56%.
It was also revealed that the year 2019 is set to mark the first time that enterprises spend more on cloud services (IaaS, PaaS and hosted private cloud) than they do on data centre equipment.
Based on actual spending in Q1-Q3 and its forecast for Q4, Synergy projects that 2019 worldwide spending on data centre hardware and software (comprising servers, storage, networking, security and associated software) will be over $93bn.
Server share of the total data centre market remained steady while storage share declined, and Synergy projects that 2019 worldwide spending on cloud infrastructure services will reach $97bn.
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The major segments with the highest growth rates over the decade were mainly within PaaS – especially database, IoT and analytics, according to the review, with the research group adding that IaaS share of the total held reasonably steady while managed private cloud service share declined somewhat.
“The decade has seen a dramatic increase in computer capabilities, increasingly sophisticated enterprise applications and an explosion in the amount of data being generated and processed, pointing to an ever-growing need for data centre capacity,” said John Dinsdale, a Chief Analyst at Synergy Research Group.
“However, over half of the servers now being sold are going into cloud providers’ data centres and not those of enterprises.
“Over the last ten years we have seen a remarkable transformation in the IT market. Enterprises are now spending almost $200bn per year on buying or accessing data centre facilities, but cloud providers have become the main beneficiaries of that spending.”
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