Gartner says cloud infrastructure as a service will exceed traditional data center outsourcing spend in India in 2017

Mumbai, India, May 2, 2017

By 2020, Integrated Systems Will Shave Off Up to 25 Percent of Combined Spend on Servers and Storage

Cloud infrastructure as a service will exceed traditional data center outsourcing spend in India during 2017, according to Gartner, Inc. In India, Traditional data center outsourcing is forecast to reach $559 million in 2017, while cloud infrastructure as a service spending will total $677 million this year.

Gartner analysts said that by 2021, cloud compute and storage as a service will be nearly three times that of traditional data center outsourcing in terms of spending in India.

"As the demand for agility and flexibility grows, organizations will shift toward more industrialized, less-tailored options," said DD Mishra, research director at Gartner. "Organizations that adopt hybrid infrastructure will optimize costs and increase efficiency. However, it increases the complexity of selecting the right toolset to deliver end-to-end services in a multisourced environment."

Gartner predicts that by 2020, 90 percent of organizations will adopt hybrid infrastructure management capabilities.

In 2016, traditional worldwide data center outsourcing (DCO) and infrastructure utility services (IUS) together represented 36.5 percent of the $1.65 billion total data center services (DCS) market in India, consisting of DCO/IUS, hosting and cloud infrastructure as a service (IaaS). This is expected to tilt further toward cloud IaaS and hosting, and by 2021, DCO/IUS will be approximately 22 percent of the expected $3.8 billion DCS market in India.

By 2021, the cloud IaaS market in India will exceed $2.1 billion in end user spending, which will be nearly three times that of traditional DCO in India. End user spending of traditional DCO in India will reach $693 million in 2021, and it will represent more than half the overall DCS spending of approximately $3.8 billion.

"This means that by 2021 traditional data center services will coexist with a minority share alongside the industrialized and digitalized services," said Mr. Mishra.

Through 2020, integrated systems in India will shave off up to 25 percent of the combined spend on servers and storage.

Gartner's interactions with end-user organizations in India reflect a strong willingness to consider alternate delivery models for infrastructure requirements. Users are keen to understand newer technologies such as integrated systems and hyperconverged infrastructures, as well as cloud-based architectures.

Cost savings, optimized time to production and simplified operations are the top drivers for the adoption of integrated systems. Within this reduced design time, simplified procurement and improved time to delivery and simplified integration with existing technology are top considerations.

A bigger focus on cloud, mobility and analytics has led to many organizations to rethink their data center strategies. Organizations in India are increasingly challenging the need to buy and maintain discrete data center components, and are also evaluating architectures that would provide the agility, flexibility and the scale desired for new application workloads. At the same time, users now have a greater choice and availability of newer technologies, such as hyperconverged infrastructures.

A further analysis of all of Gartner's client interactions indicate that an average of 20 percent of organizations augmenting storage capacities in India are actively considering integrated systems.

For more predictions and analysis, Gartner clients can read the report: “Predicts 2017: Is Your Technology Investment Future-Proof?” and "Predicts 2017: Infrastructure Services Become Hybrid Infrastructure Services".

Data center and IT operations issues will be discussed at the Gartner IT Infrastructure, Operations & Data Center Summits 2017 in Mexico City, Mumbai, India, Sydney, Australia, and at the Gartner Data Center, Infrastructure and Operations Management Summit in London and Las Vegas. Follow news and updates from these events on Twitter using #GartnerDC.

These topics will also be discussed at the Gartner IT Operations Strategies & Solutions Summit 2017 taking place May 8-10 in Orlando and at the Gartner IT Infrastructure & Operations Management Summit 2017, June 12-13 in Frankfurt, Germany. Follow news and updates from these events on Twitter using #GartnerIOM.