Data center hardware spending to reach $99 billion in 2011

By eGov Innovation Editors | Oct 17, 2011

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Worldwide data center hardware spending is projected to reach $98.9 billion in 2011, up 12.7 percent from 2010 spending of $87.8 billion, according to research firm Gartner Inc. It is also is forecast to total $106.4 billion in 2012, and surpass $126.2 billion in 2015.

Data center hardware spending includes servers, storage and enterprise data center networking equipment.

"Worldwide data center hardware spending will finally reach and surpass 2008 levels," said Jon Hardcastle, research director at Gartner. "Growth in emerging regions — particularly Brazil, Russia, India and China (the BRIC countries) — is balanced by continued weakness relative to pre-downturn levels in Japan and Western Europe. Storage is the main driver for growth. Although only a quarter of data center hardware spending is on storage, almost half of the growth in spending will be from the storage market."

The very largest size category of data centers (which is data centers with more than 500 racks of equipment) will increase its share of spending from 20 percent in 2010 to 26 percent in 2015, driven by the cloud and the shift from internal data center provision to external.

In 2010, 2 percent of data centers contained 52 percent of total data center floor space and accounted for 63 percent of data center hardware spending. In 2015, 2 percent of data centers will contain 60 percent of data center floor space and account for 71 percent of data center hardware spending.

"Traditional in-house enterprise data centers are under attack from three sides. Firstly, virtualization technologies are helping companies to utilize their infrastructure more effectively, inhibiting overall system growth. Secondly, data centers are getting more efficient, leading to higher system deployment densities and inhibiting demand for floor space. Thirdly, the move to consolidated third-party data centers is reducing the overall number of midsize data centers. Meanwhile, the largest data center class is, of course, benefitting from the rise of cloud computing," Hardcastle said.