Gartner predicts rebound for Aussie data centre spending

Monday, 12 October, 2020

Gartner predicts rebound for Aussie data centre spending

Gartner has forecast that global spending on data centre infrastructure could reach US$200 billion in 2021, marking a 6% increase from 2020. Despite a 10.3% decline in data centre spending in 2020 due to restricted cash flow during the pandemic, the data centre market is still expected to grow year-over-year through 2024. In Australia, organisations are forecast to spend AU$3 billion on data centre infrastructure in 2021, marking a 6.5% increase following a 10.4% decline in 2020.

Naveen Mishra, senior research director at Gartner, notes that in 2020, data centre growth is pushed back until the market enters the recovery period. “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,” Mishra said.

The coronavirus lockdowns will prevent more than 60% of planned new facilities construction in 2020, which is why data centre infrastructure revenue will decline in 2020. End-user spending is predicted to grow in the single digits from 2021. Gartner advises that data centre infrastructure providers should prioritise a select set of existing and new customers. This includes training sales forces to engage with the chief financial officer (CFO) and chief procurement officer on a set of cost optimisation initiatives, such as negotiating IT contracts, optimising cloud costs and consolidating IT.

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

Gartner also recommends creating an industry playbook that helps technology providers understand the impact of COVID-19 on a range of industries, to then recommend short- to mid-term action items for the given providers by each industry. Organisations can also invest in a new go-to-market model for digital natives to drive innovation and build momentum around hybrid IT and consumption-based pricing, to improve mind share with digital natives.

More information is available in the Reset your business strategy section on Gartner’s website or in ‘General Manager Insight: Data Centre Infrastructure Spending Downturn and 3 Actions for Recovery’.

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