COVID-19 shifts data center market demands as customers leverage the cloud to meet swift transformation needs
In 2020 IT decision makers around the world moved into highly reactive and tactical modes to mitigate COVID-19’s impact on their businesses, and data centers had to be provisioned rapidly for remote activities across all elements of the business stack, including IT. Although businesses’ initial response to the COVID-19 pandemic boosted certain on-premises provisioning, it also delayed large, services-laden transformation engagements. Economic uncertainty and uneven industry sector impact also saw some IT instances pivot to cash conservation. IT infrastructure vendors held strong against the murky IT backdrop, although some business shifted to ODMs more aligned to serving exascale cloud companies at the expense of more traditional or legacy technologies.
TBR believes this trend will continue through 2021. COVID-19 accelerated existing macro trends toward cloud-delivered technologies leveraging automation to strip away person-to-person contact from commerce. AI and machine learning (ML) will pull infrastructure along and push infrastructure deployments further to the edge.
Hyperconverged infrastructure (HCI) is the multifunctional building block for a lot of IT instances. HCI can sit at the ever-growing edge or in departmental or branch office data centers, and it can be used for modular scaling of private cloud deployments whether on premises or in colocation facilities. HCI growth, coupled with further cloud migration, pressures legacy and more traditional IT infrastructure.
AI growth persists. Definition increases as emerging technologies become applicable to general use. Vendors and customers alike seek AI automation to strip labor’s hollow calories from all elements of business commerce and IT support. All these aspirations hinge on tight data governance rules and human compliance with those rules when putting data into the automation engine. That tight wrapper for consistent, shared information flows can be achieved through blockchain, described by EY Blockchain Head Paul Brody as the ERP equivalent for multienterprise business networks.
This vision of the digital world also acknowledges the need for a new data engine to analyze the data and derive new insights to advance all elements of human existence. Quantum computing will be that new engine, and its performance will be to classical computing what the jet plane was to propeller airplanes. TBR expects 2021 to be a year with significant discoveries that push quantum computing further down the path to economic advantage. If deep scientific thought and “what if” analysis happen only when the world’s greatest minds can pursue their natural inquisitiveness, then it could be that COVID-19 generates the requisite science necessary for quantum computing to shift from discovery to emerging commercial application.
2021 data center predictions
- Investments in 1H20 to modernize IT to meet COVID-19 requirements will lead to reduced data center hardware spend in 2021
- Quantum computing advancements will persist, leading to an increase in M&A activity to consolidate capabilities
- COVID-19 increases the presence of HCI in modern data centers
Technology Business Research 2021 Predictions is a special series examining market trends and business changes in key markets. Covered segments include cloud & software, telecom, devices & commercial IoT, data center, and services & digital.