Data Center Outsourcing to reach $8b: Cloud is yet to displace existing options
Source: Datacenter Dynamics View: 513 Date: 2011-10-12

Global market investment in outsourcing is set to rise to $8bn in 2012 for many users of data center services found the Data Center Industry Census 2011.

A substantial proportion of racks are and will be outsourced found the new report “Technology Cycles and Cloud", the latest in the series based on the world’s largest survey of the data center industry.

In quantitative terms, the sample indicates the USA is the largest market with 210,000 racks outsourced either to third party suppliers or to other offices.

However, there is enormous variation in the proportion of outsourced racks from region to region; from as little as 3% in the Middle East, to as much as 28% in China and 30% in India.

Nick Parfitt, a researcher at DatacenterDynamics said: “It is evident that outsourcing fulfils different roles in the evolution of markets; as an entry point for organisations which have not yet evolved the capacity requirement to operate their own environments, or as an exit point in developed markets where the pace of increased IT requirements has exceeded in-house capacity.”

As far as cloud services are concerned, interest in public cloud is broadly similar across markets at different stages of development, with cloud infrastructure and private cloud being the preferred options in order of importance. However, the research indicates that neither variants of private cloud (see below) are likely to replace other outsourcing options any time in the near future and that the technology is being considered as part of a portfolio approach to managing outsourced services.

The research findings suggest that Cloud options will be far more commonly developed as part of existing infrastructure, either in-house by client companies or on dedicated infrastructure by service providers. This is driven by the perception of the vulnerability of Public cloud to security threats and legal issues. Interest in the uptake of Private cloud variants rises with the level of market evolution, although major growth markets such as China and Brazil are interested in all options which reduce resource costs.

Technology Cycles

The Technology Cycles and Cloud report is based upon the responses of 3,800 data center owners and customers gathered and analysed by DatacenterDynamics. It reveals that up to a point, much of the infrastructure essential for normal day-to-day operations is on a shopping list for major upgrade on cycles of two to four years. Adoption and consideration of new technologies is also broadly in line with the state of development of data center markets; the more “advanced” the market, the more likely it is that owners and operators are focussed on areas like the efficiency and management of their facilities. Technology areas which stand apart from “staple requirements” and “special requirements” for include two variants of Cloud (Private cloud and Cloud infrastructure), together with Data Center Infrastructure Management (DCIM) software, data center automation, modular design principles and the upgrade of systems management.

“The implementation of modular design principles and automated operations is squarely aimed at eliminating the hazard of human intervention and therefore human error within data centers; it is perceived to be a matter of good risk management practice,” said Nick Parfitt, researcher at DatacenterDynamics. “The Census has highlighted concerns about skills shortages across all markets, and these tend to be more acute in regions where more aggressive growth is being experienced.”

The market for DCIM software has been highlighted as showing high growth potential in other surveys. In more developed markets, rising interest reflects concerns over energy costs and environmental degradation as well as the need to for a faster and automated response to emerging operating issues in complex, high density and virtualised server environments.

The Technology Cycles and Cloud report can be found together with other reports covering Data Center Investment and Growth, Human Capital and Global Data Center Energy Demand Forecasting by visiting www.datacenterdynamics.com/research.

The 2011 Data Center Industry Census

The DatacenterDynamics Industry Census 2011 is the largest ever comparative study of data center operators and end-users as well as the facilities which they manage. A total of 5,400 interviews were completed during June and July 2011 to provide a detailed view of 22 key markets around the globe. The Data Center Industry Census provides a useful method of comparing market profiles, describes key trends and attitudes within those markets, and answers a myriad of questions about the nature of this rapidly growing sector.

Devott Publications
The Selection of the TOP Global Outsourcing Destinations – China TOP 15 (TGOD China TOP 15) Ended and Its Rankings and Research Reports are Now Available Worldwide