Decline of data center services to boost hybrid computing model

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The growth of cloud computing and “industrialized” services, such as virtualization and other automation technologies, and the decline of traditional data center outsourcing indicate a massive shift toward a hybrid infrastructure model, according to a new study from Gartner.

"As the demand for agility and flexibility grows, organizations will shift toward more industrialized, less-tailored options," said D.D. Mishra, research director at Gartner. "Organizations that adopt hybrid infrastructure will optimize costs and increase efficiency. However, it increases the complexity of selecting the right toolset to deliver end-to-end services in a multisourced environment."

Gartner predicts that by 2020, 90% of organizations will adopt hybrid infrastructure management capabilities – which include both cloud and on-premise computing services.

The traditional data center outsourcing (DCO) market is shrinking. Worldwide traditional DCO spending is expected to decline from $55.1 billion in 2016 to $45.2 billion in 2020, the report said. Cloud computing services, on the other hand, are forecast to increase from $23.3 billion in 2016 to reach $68.4 billion in 2020.

Spending on colocation and hosting is also expected to increase, from $53.9 billion in 2016 to $74.5 billion in 2020. Infrastructure utility services (IUS) will grow from $21.3 billion in 2016 to $37 billion in 2020, and storage-as-a-service will increase from $1.7 billion in 2016 to 2.7 billion in 2020.

In 2016, traditional worldwide DCO and IUS together represented 49% of the $154 billion total data center services market worldwide, consisting of DCO/IUS, hosting and cloud infrastructure as a service (IaaS).

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Gartner expects this to tilt further toward cloud IaaS and hosting, and by 2020 DCO/IUS will be about 35% of the expected $228 billion worldwide data center services market.

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