Data Center Outsourcing Market Trends

Growth Drivers

• Scalable storage solutions: The emergence of artificial intelligence (AI) and big data analytics is strongly influencing the data center outsourcing market growth. The end use organizations rely on AI and big data to drive their operation and innovations. Big data analytics generates massive volumes of data, necessitating effective storage solutions; however, standard storage systems are incapable of processing the tremendous amount of data generated. In such instances, outsourced data centers emerge as scalable, high-capacity, and high-performance storage solutions, whereas advanced data centers efficiently manage enormous datasets for big data analytics. For instance, in June 2023, Gartner Magic Quadrant recognized Deloitte as a visionary data center outsourcing and hybrid infrastructure managed service provider globally. 

• Increasing adoption of IoT solutions: The IT and telecom companies are widely adopting IoT solutions due to their efficiency in real-time data processing. Autonomous vehicles, smart sensors in industrial devices, wearable electronics, and smart home devices are some of the IoT solutions that generate mass volumes of data. These IoT-based devices rely on real-time analytics to ensure operational efficiency and safety, which further drives the demand for data center outsourcing services. There are around 15 billion connected IoT devices worldwide and this is expected to double by 2030.

Challenges

• Data security and privacy concerns: Organizations often hesitate to outsource their data centers due to concerns about potential data breaches and cyberattacks. Moreover, adhering to data protection regulations such as GDPR, CCPA can be challenging when outsourcing. Businesses may have trouble ensuring third-party data centers abide by strict compliance regulations.

• Cost implications: Outsourcing may involve hidden expenses such as transition fees, integration costs, and ongoing management and monitoring charges that can diminish the anticipated savings. Also, tailoring outsourced solutions to meet specific organizational needs or integrating them with existing systems can incur significant additional costs.