As 2020 kicks off a new decade, and one of the questions the tech space is asking about the years ahead is what will happen to traditional data centers? The data center market is expected to reach about $10 billion by 2023, while the global data center market could reach $174 billion by 2023, according Arizton. But what shape will the market take?
Gartner asked enterprises what they think will happen in the data center space, and 10% said they’ve already closed their traditional data centers. By mid-decade—2025—80% say they plan to shut their traditional data centers down. Gartner says many companies don’t want to invest capital in rebuilding aging data centers. Rather than replacing them, enterprises would rather have someone else manage the data center’s physical infrastructure.
Other trends that will affect data centers in the next decade include increasing governmental oversight and regulation like the GDPR (General Data Protection Regulation) and other data compliance regulations, continued and growing cybersecurity concerns as cybercriminals’ techniques become more and more sophisticated, the rise in edge computing, a skills shortage in certain areas of IT, and concerns over climate change and the potential increased risk of natural disasters as a result. These concerns and others have many enterprises wondering where they should turn to ensure things like security and compliance, backup and disaster recovery, and network availability.
US Signal recently released its survey entitled “2020 State of Data Center Offerings,” which provides some insight into how 110 U.S.-based IT decisionmakers go about selecting a third-party data center provider. The study also provides insight into the popularity of hybrid IT infrastructure. More than six out of 10 (66%) said they deploy hybrid IT architecture, while 20% has an entirely cloud-based infrastructure, and 14% has it all on premise.
The US Signal survey results align with key trends in the data center space. For instance, 58% of IT decisionmakers listed security and compliance as a high priority when choosing a data center provider, and 31% listed security and compliance as the top priority. One-third of respondents (38%) reported being impacted by a ransomware attack during the prior 12 months, which is another factor pushing cybersecurity and compliance management up their list of priorities.
The second most popular priority, according to the survey, is disaster recovery and backup availability. If a natural disaster, outage, or cyberattack were to occur, a majority of respondents (54%) admitted they were only somewhat or not very confident in their disaster recovery and backup solution. Nearly half of respondents also noted priorities such as network capacity and connectivity options, as well as cost. In terms of services enterprises are looking for from their data center providers, 75% want backup and disaster recovery, 73% want security services, 69% want network connectivity, 59% want private cloud hosting, 56% want multi-tenant cloud hosting, and 39% want colocation.
In general, many in the space believe the data center industry is moving in two separate directions. One direction is toward edge computing to provide compute and storage as close to users as possible, which can help deliver low latency. And yet, hyperscale facilities are also on the rise—just not for the average company. For the average enterprise, it seems outsourcing the data center is the key to addressing top concerns such as regulatory compliance and security.