Europe is seeing double digit growth in cloud and hosting technology as managed hosting expands, says researcher Frost & Sullivan, with eastern Europe aiming to catch up with western trends.
The gradual movement of data centres from on-premise services toward hosted services such as colocation, managed hosting and cloud is an important shift in enterprise IT infrastructure, compelling data centre service providers to expand their portfolios to support hybrid environments. With enterprise IT infrastructure currently being a combination of traditional and cloud services, providers need to tailor their solutions to offer management and technical aid for a complex setup, it says in a new report on the European Data Centre Services Market.
Different service providers are pursuing different strategies, however. For instance, carrier-neutral colocation providers will pursue interconnections as an important business. Meanwhile, traditional hosting providers are incorporating cloud capabilities of their own or by partnering with cloud service providers to enable different enterprise IT environments through managed services.
"Already, retail colocation providers are sealing partnerships with cloud providers to meet enterprise demand for cloud interconnections," said Digital Transformation Research Analyst Shuba Ramkumar. "Colocation providers are building cloud ecosystems to allow enterprises to operate in hybrid IT environments. There is increased focus on private networking models to deliver seamless access and increase security of data centre services."
Although Western Europe is the growth hub for colocation and managed hosting in Europe, Eastern Europe is fast catching up with cloud and hosting technology trends. The overall European market, driven by enterprise need to outsource IT infrastructure management, is expected to grow from $5.65 billion in 2015 to $10.13 billion in 2020, at a compound annual growth rate of 12.3%.
The data centre service market will also continue benefiting from the cost efficiency of outsourcing IT infrastructure management and enterprises' shortage of internal IT resources. The growth of content-heavy applications and focus on data analytics and application delivery will require organisations to outsource infrastructure management. Furthermore, the rising trend of the Internet of Things necessitates robust back-office computing, which can be delivered through data centre services.
"The managed hosting market is still favoured by enterprises for applications with predictable utilisation and which need dedicated servers for optimal performance," noted Ramkumar. "Simultaneously, server virtualisation technology is gaining traction, with managed hosting customers investing in managed virtualised servers instead of dedicated physical servers in the traditional hosting model."
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