Hyperscaler, Neutral Carrier, Cloud Player, the 2021 Datacentre Trends, IDC

Datacentres will undergo significant change in 2021. There has been a revolution in behaviours and approaches that is shifting investment and innovation, and how datacentres provide services and provision for data and compliance.

According to Sabelo Dlamini, Senior Research and Consulting Manager, IDC Sub-Saharan Africa, some of the trends include the growth of the hyperscaler, continued reliance on the carrier-neutral datacentre, and a focus on performance and quality as data becomes increasingly invaluable.

“In addition to the introduction and expansion of hyperscalers such as Amazon, Google, and Microsoft, there will also be growth in the carrier-neutral datacentre for cross-connect services, meet-me rooms, and internet exchange points,” he adds. “This is because we are expecting a growth in traffic volumes due to changes in enterprise processes and consumer behaviour because of COVID-19.”

The carrier-neutral datacentre is likely to become key in developing fair playing fields, particularly for smaller internet service providers (ISPs), to have access to different interconnection points and internet exchange points. As emergent technologies such as artificial intelligence (AI), the Internet of Things (IoT), and robot process automation (RPA) continue to cement their scope and capability, demand for datacentres will increase, as will the volumes of data generated by the enterprise.  Cloud computing demand will continue to rise, as will the adoption of AI and IoT services that are hosted in the cloud, and this will put a heavy reliance on datacentre capability and ubiquity.

“Mostly everyone will be moving to the cloud so it is critical for every organisation, especially larger enterprises, to see how these changes can impact their business process in the near future, and start to prepare for it,” says Dlamini. “Even if your business is not planning to move, or you think your organisation won’t be affected, your key clients might be moving, and they may expect your processes to be cloud-ready. This is the right time to develop a cloud-ready or digital strategy that ensures the company can survive this transition.”

Everybody is transforming. Competitors, clients, and governments. It is time to ensure that the organisation has the right tools in place to fully leverage the potential of cloud, technologies such as AI or RPA.  This trend towards cloud-ready, digital-native organisation reliant on robust datacentre capabilities, will be further influenced by an increased demand for improved performance and quality of service that will push the datacentre further into the spotlight, and into the critical heart of the organisation.

“There will be a growing need for distributed content delivery networks, and these need to be hosted in regional or local datacentres that are closer to end-users,” says Dlamini. “Additionally, we will see an increased expansion of existing datacentres locally to cater for the growing legal requirements for data to exist within the country.”

On the hyperscaler frontier, the growth and expansion of Amazon, Google, and Microsoft is likely to remain a key driver impacting all these trends. These giants of cloud will continue to evolve their services and reach, allowing for the organisation to reach deeper into its cloud investment and squeeze out every last virtual drop of potential.

“The datacentre trends of 2021 are driven by the need to ensure that organisations have systems and processes in place that are cloud-ready, that can cover both on-prem and off-prem cloud investment, and that can fully support the hybrid cloud model that many sectors require,” concludes Dlamini. “These factors will shape how the datacentre evolves over the next 12 months and it is very likely that continued innovation and investment will further shift the capabilities of the datacentre and how the organisation can benefit from them.”

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Cloud IT infrastructure revenues decline amid a slowdown in overall spending, IDC

According to the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker, vendor revenue from sales of IT infrastructure products (server, enterprise storage, and Ethernet switch) for cloud environments, including public and private cloud, declined 10.2% year over year in the second quarter of 2019 (2Q19), reaching $14.1 billion.

 IDC also lowered its forecast for total spending on cloud IT infrastructure in 2019 to $63.6 billion, down 4.9% from last quarter’s forecast and changing from expected growth to a year-over-year decline of 2.1%.

Vendor revenue from hardware infrastructure sales to public cloud environments in 2Q19 was down 0.9% compared to the previous quarter (1Q19) and down 15.1% year over year to $9.4 billion. This segment of the market continues to be highly impacted by demand from a handful of hyperscale service providers, whose spending on IT infrastructure tends to have visible up and down swings.

After a strong performance in 2018, IDC expects the public cloud IT infrastructure segment to cool down in 2019 with spend dropping to $42.0 billion, a 6.7% decrease from 2018. Although it will continue to account for most of the spending on cloud IT environments, its share will decrease from 69.4% in 2018 to 66.1% in 2019. In contrast, spending on private cloud IT infrastructure has showed more stable growth since IDC started tracking sales of IT infrastructure products in various deployment environments.

 In the second quarter of 2019, vendor revenues from private cloud environments increased 1.5% year over year reaching $4.6 billion. IDC expects spending in this segment to grow 8.4% year over year in 2019.

Overall, the IT infrastructure industry is at crossing point in terms of product sales to cloud vs. traditional IT environments. In 3Q18, vendor revenues from cloud IT environments climbed over the 50% mark for the first time but fell below this important tipping point since then.

 In 2Q19, cloud IT environments accounted for 48.4% of vendor revenues. For the full year 2019, spending on cloud IT infrastructure will remain just below the 50% mark at 49.0%. Longer-term, however, IDC expects that spending on cloud IT infrastructure will grow steadily and will sustainably exceed the level of spending on traditional IT infrastructure in 2020 and beyond.

Spending on the three technology segments in cloud IT environments is forecast to deliver growth for Ethernet switches while compute platforms and storage platforms are expected to decline in 2019.

Ethernet switches are expected to grow at 13.1%, while spending on storage platforms will decline at 6.8% and compute platforms will decline by 2.4%. Compute will remain the largest category of spending on cloud IT infrastructure at $33.8 billion.

Sales of IT infrastructure products into traditional (non-cloud) IT environments declined 6.6% from a year ago in Q219. For the full year 2019, worldwide spending on traditional non-cloud IT infrastructure is expected to decline by 5.8%, as the technology refresh cycle driving market growth in 2018 is winding down this year. By 2023, IDC expects that traditional non-cloud IT infrastructure will only represent 41.8% of total worldwide IT infrastructure spending (down from 52.0% in 2018). This share loss and the growing share of cloud environments in overall spending on IT infrastructure is common across all regions.

Most regions grew their cloud IT Infrastructure revenues in 2Q19. Middle East & Africa was fastest growing at 29.3% year over year, followed by Canada at 15.6% year-over-year growth. Other growing regions in 2Q19 included Central & Eastern Europe (6.5%), Japan (5.9%), and Western Europe (3.1%). Cloud IT Infrastructure revenues were down slightly year over year in Asia/Pacific (excluding Japan) (APeJ) by 7.7%, Latin America by 14.2%, China by 6.9%, and the USA by 16.3%.

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