Data center market outlook revealed by Technavio

IoT investment

Technavio analysts forecast the global data center market would grow at a CAGR of close to 11 percent during 2016-2020.

It cites increased spending on cloud data center, increased use of big data analytics, growing IoT and need for colocation and managed service data centers as the growth driving factors.

Technavio said many cloud service providers (CSPs), such as AWS, Microsoft Azure, and Google Cloud, construct cloud data centers that cost up to billions of dollars to offer cloud-based services to end-users and enterprises.

SMEs prefer to run their business operations through CSPs, colocations, and web hosting cloud data centers due to benefits such as scalability, reliability, and cost reduction.

CSPs such as AWS, Microsoft, and Google operate more than 100,000 servers worldwide to meet the increasing business demand.

The rise in demand has necessitated the need for automation in cloud data centers. Many cloud data centers are termed as mega data centers, which consume large quantities of power during peak data-intensive operations.

There is an increase in innovations in the design and deployment of these data centers. The enterprises spending on cloud data centers was $38 billion in 2015, and it is expected to reach $75 billion by 2020 at a CAGR of around 14.57 percent.

When it comes to big data analytics, most business- and consumer-based applications generate large amounts of structured and unstructured data. They also use sensors that can generate massive amounts of data within a short time.

The spending on big data infrastructure in data centers was valued at around $15 billion, and it is expected to grow to $ 25 billion by 2020, growing at a CAGR of 10.76 percent.

Further, Technavio said, the number of internet-connected devices is estimated to reach around 30 billion by 2019, which will give a major boost to the global data center market.  By 2020, IoT-enabled devices will increase the data center traffic by around 40 times, the research firm forecasts.