How to Scale End-to-End Observability in AWS Environments

Worldwide Data Center Infrastructure Spending to Grow 6% Next Year

Oct. 14, 2020, 1:33 a.m.

TL;DR

Gartner Inc. forecasts that global data center infrastructure spending will increase by 6% in 2021. The COVID pandemic caused restricted cash flow, which significantly decreased data center spending in 2020. Despite the decline this year, Gartner predicts that the data center market will grow year-on-year till 2024.

The data center market is expected to pick up speed in 2021, reaching revenues of $200 billion in 2021

Key Facts

1
Gartner predicts end-user spending on data center infrastructure to reach $200 billion in 2021, increasing 6% compared to 2020.
2
Data center infrastructure spending will drop by 10.3% in 2020 due to the global pandemic preventing the construction of 60% of planned new facilities.
3
Gartner recommends data center infrastructure manufacturers to get back on the recovery path by prioritizing a select set of existing and potential customers.
4
Gartner also advises data center infrastructure providers to invest in new got-to-market for digital natives to encourage innovation. It will help build momentum around hybrid IT and consumption-based pricing.

Details

Gartner Inc. is a global research and advisory firm. It recently forecasted that the data center market would continue to grow despite the cash restrictions imposed on it due to the global pandemic.

According to Gartner Inc., end-user spending on data center infrastructure was around $210 billion in 2019, which dropped to $188 billion in 2020, a decline of nearly 10.3%. The data center market is expected to pick up speed in 2021, reaching revenues of $200 billion in 2021.

The following table describes the worldwide data center infrastructure end-user spending (Billions of U.S. Dollars) according to Gartner.

	2019	2020	2021
End-User Spending ($B)	210	188	200
Growth (%)	0.7	-10.3	6.2

Source: Gartner (October 2020)

More and more companies are now opting for cloud-based options, which is also driving the growth in the data center market. However, optimizing the cost of cloud computing resources is a challenge, which led to the rise of FinOps.

FinOps is a framework that manages operating expenditures in the cloud. It helps cross-functional teams in the same organization maintain financial accountability for cloud services.

Gartner forecasts the data center market to continue growing until 2024. It says that enterprises must continue their efforts to become resilient and invest in digital transformation. It recommends data center infrastructure vendors to focus on cost optimization initiatives like renegotiating IT contracts, optimizing cloud costs, and consolidating IT.

Much of the reduced demand in 2020 is expected to return in 2021 when staff can physically be onsite. For now, all data center infrastructure segments will be subject to cost containment measures and enterprise buyers are expected to extend life cycles of installed equipment.
Naveen Mishra
Senior Research Director, Gartner