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Technology: Both Cloud and On-Premise Data Centers Are Seeing Rapid Global Growth

By Dick Weisinger

While there’s been dramatic growth in worldwide expansion in ground-breaking of new data centers that target cloud delivery, it isn’t only cloud data centers that are expanding.   Interestingly, new information shows that on-premise data computing centers may not be contracting.  In fact, just the opposite is happening seems to be happening.

A survey of organizations in Europe by Digital Realty Trust found that 85 percent of companies have plans to expand their on-premise data centers in 2012.  That’s up from 82 percent that had expansion plans in 2010.  On average, companies say they’ll need another 15,600 square feet of space for expanded data center facilities.  About a quarter of those responded expected with high certainty that their expansion projects would go forward, while 62 percent thought that expansion would probably happen.  Top target locations for the locations of the new facilities were at major business centers, like London, Paris and Frankfurt.

Another survey by Digital Realty Trust taken in the US in mid-2011 found similar results.  About two-thirds of companies said that they had expanded their on-premise data center capacity in the last two years and 85 percent reported that they would very likely expand their data centers in 2011.

These statistics seem to run counter to what Gartner was predicting in late 2011 for data center growth. Jon Hardcastle, Gartner analyst and author of the report, said at that time that “Traditional in-house enterprise data centers are under attack from three sides. Firstly, virtualization technologies are helping companies to utilize their infrastructure more effectively, inhibiting overall system growth. Secondly, data centers are getting more efficient, leading to higher system deployment densities and inhibiting demand for floor space. Thirdly, the move to consolidated third-party data centers is reducing the overall number of midsize data centers. Meanwhile, the largest data center class is, of course, benefitting from the rise of cloud computing.”

The Gartner report also found that global data center spending will reach $98.9 billion in 2011, up nearly 13 percent from 2010 spending of $87.8 billion.  Data center spending in 2012 is expected to be $106.4 billion this year and to reach $126.2 billion in 2015.

Some reasons that can explain the rapid expansion of data centers include:

  • Increasing world-wide dependence on IT in business, government and society
  • The number of internet users doubled to 2.11 billion in June of 2011 from June of 2006.
  • The number of smartphones is expected to quadruple from 500 million in 2011 to 2 billion in 2015.
  • Migration of health care technology to the cloud
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