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Data Center Trends: Outsourcing

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Corporations face mounting pressure from stakeholders to reduce expenses and increase efficiencies in their information technology (IT) environments, all while maintaining 100 percent data availability. In addition, many organizations have substantial IT initiatives to tackle this year, leaving them with few resources to devote to routine facility maintenance. As a result, facilities are increasingly turning to outsourcing opportunities, such as data center services and cloud hosting to store and manage their data. By doing so, many organizations have successfully eliminated the capital required to purchase and maintain expensive hardware and accommodate the capacity needed to store data on premise. By outsourcing managed services, facility managers can free up critical square footage and IT staff can hand off general maintenance activities and prioritize overall business strategy. 

Confirming this trend, Gartner recently published a report forecasting a 0.5 percent decline this year in worldwide IT spending from 2015. However, spending in the IT services market is expected to reach $929 billion, a 2.1 percent increase from 2015. In other words, as budgets tighten and technology advances, senior IT leaders recognize the value in managed services and, in turn, spend less on implementing their own hardware and software, entrusting their data to expert providers.

As part of this IT spending shift toward outsourced services, organizations are also considering virtualization in their critical systems and IT environments. As the amount of capacity required to store data on premise proliferates, organizations are turning to virtual technology instead of increasing the square footage in their facilities. According to a recent survey published by Nomura Holdings, CIOs expect cloud consumption to rise from 31 percent in 2014 to 58 percent in 2018. In addition, public cloud adoption is predicted to grow the fastest – from 8 percent in 2014 to 19 percent in 2018.