data centerA global data center forecast from Technavio calls for annual data center growth of close to 11 percent from 2016-2020. Increasing investments in building new and upgrading existing data centers that support the provision of Cloud services is among four main drivers of growth, the market research provider highlights in a press release.

Other drivers of the data center forecast include growing use of Big Data analytics, Internet of Things (IoT) technology and a growing need for data center colocation and managed services.

The scale, as well as technological features, built into cloud services data centers is increasing as well. One result is that the cost of building and maintaining data centers is rising for leading cloud services providers (CSPs), such as AWS, Microsoft Azure and Google Cloud, Technavio points out.

Data Center Growth
Technavio forecasts the amount enterprise-scale businesses spend globally on Cloud data centers will grow at a CAGR of around 14.57%, rising from $38 billion in 2015 to reach nearly $75 billion in 2020.

Spending on Big Data infrastructure, another market segment, will grow at a 10.76% CAGR from 2016-2020 to reach $25 billion. Commenting on this trend, Technavio lead data center research analyst Rakesh Kumar Panda said: “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.”

Rising IoT spending will be another major contributor to growth in the global data center market, according to Technavio. Whether it’s in homes, commercial sites or in transit, new IoT connections translate into the need for larger, more powerful and more efficient data centers. IoT-enabled devices will result in data center traffic increasing around 40-fold from its current level, according to Technavio.

Growing demand from enterprise-scale businesses to colocate and manage private data centers within or alongside those of public and third-party providers is the fourth factor that will boost the global cloud and data center market upwards.

“An enterprise operating a colocation facility instead of building its own data center can derive several benefits,¨ Rakesh commented.¨Data center colocation is a facility that rents computing servers, storage, and network. It minimizes the utilization of power and bandwidth and enhances the security of enterprise IT equipment.”

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