Gartner

Gartner predicts data centre spending to hit $200bn in 2021

15 October 2020 | Abigail Opiah

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End-user spending on global data centre infrastructure is projected to reach $200 billion in 2021, an increase of 6% from 2020, according to the latest forecast from Gartner.

The company said that the data centre market is still expected to grow year-over-year through 2024, despite a 10.3% decline in data centre spending in 2020 due to restricted cash flow during the pandemic.

“The priority for most companies in 2020 is keeping the lights on, so data centre growth is generally being pushed back until the market enters the recovery period,” said Naveen Mishra, senior research director at Gartner.

“Gartner expects larger enterprise data centres sites to hit pause temporarily and then resume expansion plans later this year or early next.

“However, hyperscalers will continue with their global expansion plans due to continued investments in public cloud.”

The report also found that the impact of Covid-19 is set to prevent more than 60% of planned new facilities moving to the construction phase this year, which is why data centre infrastructure revenue will decline 10.3% in 2020. End-user spending is expected to grow in the single digits starting in 2021.

“Much of the reduced demand in 2020 is expected to return in 2021 when staff can physically be onsite,” said Mishra.

“For now, all data centre infrastructure segments will be subject to cost containment measures and enterprise buyers are expected to extend life cycles of installed equipment.” 

With slow improvement in economic growth, data centre infrastructure general managers should seek to prioritise a select set of existing and new customers, according to Gartner.

Gartner also said that with slow improvement in economic growth, data centre infrastructure general managers should prioritise a select set of existing and new customers.

The increasing demand for cloud networking is a major driver of the market for data centre infrastructure.

Reports also suggest that the market is growing due to an increase in demand for servers, computers, networking equipment like routers or switches, security components like a firewall or biometric security sensor, storage capacity, and data centre management software and applications.