Gartner reports Data center infrastructure spending to grow 6% globally

Gartner has recently predicted spending in the industry to grow 6% globally next year. The growth will come as a result of businesses rebounding from cash flow restrictions that were imposed on them during the coronavirus pandemic, Gartner said. It projects that end-user spending on global data center infrastructure products will hit $200 billion in 2021.

In the report, Gartner said data center infrastructure spending has declined by more than 10% in 2020 to date, with lockdowns resulting from COVID-19 holding back around 60% of new data center facility construction. But it says this decline will come to an abrupt halt, with spending expected to grow year-over-year through 2024.

Naveen Mishra, a senior research director at Gartner, says, “The priority for most companies in 2020 is keeping the lights on, so data center growth is generally being pushed back until the market enters the recovery period. Gartner expects larger enterprise data centers 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.”

Spending on information technology has been hard-hit since the COVID-19 pandemic began. The latest read by SiliconANGLE’s sister analysis firm Wikibon predicted a decline of about 5% in 2020, based on an analysis of survey data by Enterprise Technology Research. But like Gartner, Wikibon is also forecasting a quick recovery next year, with ETR’s latest data suggesting 2% growth in technology spending in 2021.

Gartner also detailed its recommendations for data center infrastructure manufacturers to get back on the path to recovery, which involve prioritizing a select set of existing and new customers.

According to Gartner, companies should train their sales forces to engage with chief financial officers and chief procurement officers to create a set of cost optimization initiatives around renegotiation of contracts, optimizing cloud costs and consolidating IT. It also recommends creating an industry playbook that can help them understand the impact of COVID-19 on different industries, so they can come up with short and midterm action items for buyers in each industry.

Data Center infrastructure providers should invest in new go-to-market models for digital natives aimed at driving innovation. The idea is to build momentum around hybrid IT and consumption-based pricing.