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Synergy Research highlights how rise of the hyperscalers has hit on-premise datacentres

July 14, 2023
in Technology
Synergy Research highlights how rise of the hyperscalers has hit on-premise datacentres
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Latest market tracker data from Synergy Research Group highlights how shift in enterprise IT spending patterns has impacted on-premise datacentres

Caroline Donnelly

By

Caroline Donnelly,
Senior Editor, UK

Published: 13 Jul 2023 12:32

Hyperscale cloud datacentres now make up 37% of the world’s datacentres, demonstrating the transformational impact that the rise of cloud computing has had on enterprise datacentre infrastructure investment, according to a study by Synergy Research Group.

The research found there are nearly 900 such facilities in operation around the world. Around half of this hyperscale capacity is located in facilities owned and built directly by operators, with the remainder contained in colocation sites.

“With non-hyperscale colocation capacity accounting for another 23% of capacity, that leaves on-premise datacentres with just 40% of the total,” said the Synergy study.

Five years ago, the picture was very different, with close to 60% of total capacity residing in on-premise datacentres, which is a sign of how the hyperscalers hold on enterprise IT has grown, said Synergy.

“Ten years ago, enterprises were spending over $80bn per year on IT hardware and software for their own datacentres, while spending well under $10bn on nascent cloud infrastructure services,” said the Synergy report.

“Fast forward to the present day and spending on datacentre hardware and software has only grown by an average 2% per year, while spending on cloud services has ballooned, growing by an average 42% per year to reach $227bn in 2022.”

On the back of these trends, Synergy predicts that over the next five years the hyperscale operators will account for more than half of all capacity, while on-premise will drop to under 30%.

“Meanwhile, the total capacity of all datacentres will continue to rise steadily, driven primarily by hyperscale capacity almost doubling over the next five years,” the company added.

That is not to say, however, that the days of on-premise datacentres are numbered, according to John Dinsdale, chief analyst and research director at Synergy.

“Given all of the excitement over the growth of hyperscale operators and the big push towards enterprises outsourcing datacentre facilities, you might assume that the days of on-premise datacentres are numbered,” he said.

“That is not true and the total capacity of on-premise datacentres will remain reasonably steady over the next five years, actually declining by an average of just a fraction of 1% each year.”

Synergy predicts that while growth rates for on-premise datacentre capacity will “flatline”, the overall concentration of IT load contained in them will rise.

“[This will be] driven primarily by hyperscale capacity almost doubling over the next five years. While on-premise share of the total will drop by over two percentage points per year, the actual capacity of on-premise datacentres will decrease only marginally. Colocation share of total capacity will remain relatively constant,” Dinsdale said.

Synergy’s research is based on an analysis of the datacentre footprint and operations of 19 of the world’s major cloud and internet service providers coupled with quarterly data from more than 230 colocation providers.

Read more on Datacentre capacity planning


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>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Computer Weekly – https://www.computerweekly.com/news/366544732/Synergy-Research-highlights-how-rise-of-the-hyperscalers-has-hit-on-premise-datacentres

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