Data centre

Data centres decline as users turn to rented servers

(Source: IDGNS)

12 April 2017

Data centres are declining worldwide both in numbers and square footage, according to IDC—a remarkable change for an industry that has seen booming growth for many years.

Users are consolidating data centres and increasingly renting server power. These two trends are having a major impact on data centre space.

The number of data centres worldwide peaked at 8.55 million in 2015, according to IDC. That figure began declining last year, and is expected to drop to an expected 8.4 million this year. By 2021, the research firm expects there to be 7.2 million Data centres globally, more than 15% fewer than in 2015.

Square footage
The global square footage of data centres, after recent boom times, is also expected to slide. In 2013, data centres totalled 1.6 billion square feet. That was when big service providers like Amazon, Microsoft, and Google were building huge data centre complexes—pushing square footage globally to 1.8 billion this year. But IDC expects that number to decline from now on. Cloud adoption is a major reason for the trend.

Consider the adoption of Office 365, said Tad Davies, who heads consulting services at Bick Group, a Data centre consultancy. “Easy to move to and eliminates infrastructure in my Data centre,” he said. “Same for CRM.”

Consolidation is also playing a role, said Davies, as are new approaches to computing. New firms are adopting “cloud first” strategies, he said. “As they grow into larger organisations, the Data centre is never created.”

Large users, especially the US government, have been shrinking their data centre space to drive efficiency. Better server utilisation often means more consolidation.

While the biggest decline is affecting in-house Data centres, said IDC, service provider data centres continue to expand. But even there, the pace of growth is moderating as the market matures.

Cloud limitations
Despite stagnant growth, data centres are still needed, Davies said, because there are limits to what can go into the cloud.

“Many applications that end users have built and further refined over the years are not cloud compatible,” he said. “To get there requires significant re-architecture as well as investment.”

The cloud is not necessarily less expensive than an on-premises operation, said Davies. But it does provide speed, flexibility and an operating expense, or OpEx, model.

Market revenue
In terms of revenue, the data centre system market, which includes software and hardware, is barely growing, according to research firm Gartner.

“Enterprises are moving away from buying servers from the traditional vendors and instead renting server power in the cloud from companies such as Amazon, Google, and Microsoft,” said John-David Lovelock, research vice president at Gartner. “This has created a reduction in spending on servers, which is impacting the overall Data centre system segment.”

Last year, spending on data centres declined 0.1%, said Gartner. This year it’s expected to increase by only 0.3%.


IDG News Service

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