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451 Research Shows Slow Overall Growth of Datacenter Market in Q4 2014

February 19, 2015

The latest industry data from 451 Research shows that the data center install base in the fourth quarter of 2014 grew by only 0.2 percent over the previous year to just 4.3 million data centers and IT sites.

Weak demand for data centers that the 451 Research report “Voice of the Enterprise: Data Centers” shows, however, is somewhat misleading in that it may, on the surface, appear to make the entire computing ecosystem look poor. It is important to know that the datacenters and IT sites the research specifies (server closets and rooms) leaves out hyperscale cloud facilities as well as activity from service providers and multi-tenant datacenter vendors. While enterprises proved to desire only 0.2 percent in traditional sites, there was greater demand for cloud storage and the like – hyperscale datacenters grew at a rate of four percent globally in the fourth quarter of last year.

Daniel Harrington, the research director of Enterprise Datacenters, commented on the trend toward cloud computing and how even the meager growth seen in the traditional datacenter market only comes as a result of IT's need for resources.

“Investment in new datacenter space by traditional enterprises is being propped up only by the sheer force of growing organic demand for IT resources,” Harrington said. “Almost all the overarching market trends are working against the need for enterprises to build out more of their own datacenter space.”

Even more telling is that growth of the data center market appeared only to take place in developing regions while developed regions experiences losses. The Asia-Pacific, Caribbean and Latin American, and Middle East and Africa regions all experienced gains of two percent year-on-year while North America and Europe showed losses, respectively, of one percent and two percent. Much of the stagnating growth overall was also affected by the consolidation of enterprises that have begun to opt for centralized premium data centers instead of the traditional server closets and rooms on which 451 Research focuses in its report.

This is some hope for the traditional data center market in the short term because of the need for enterprises to upgrade their servers and because of the relatively slow growth of data center services otherwise. Even though the demand for centralized servers and cloud packages have overtaken and will likely continue to grow, they will do so at a slow pace, and that may result in a few more quarters of overall growth for the market that supports server closets and rooms.

Edited by Maurice Nagle

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