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India Data Center Infrastructure Hardware Spending on Pace to Reach US$2.7 Billion in 2018

Data center infrastructure hardware enterprise spending in India is on pace to total US$2.7 billion in 2018, a 2.6 percent increase from 2017, according to Gartner, Inc.

While hardware spending is set to grow moderately in 2018, enterprise spending on data center infrastructure software will rise to US$3.6 billion in 2018, a 10 percent year-over-year increase.

Gartner analysts are providing the latest trends shaping the future of the infrastructure and operations market in front of over 400 attendees at Gartner's annual Gartner Infrastructure, Operations Management & Data Center Summit, which is taking place here through Wednesday.

"Digital business initiatives are forcing infrastructure and operations leaders in India to adopt a hybrid IT infrastructure model that can deliver reliable, innovative and cost-effective solutions to the business in a timely manner," said Santhosh Rao, research director at Gartner. "This positions cloud computing as a critical component of the hybrid model."

In terms of data center infrastructure hardware spending, end-user spending on networking equipment is expected to grow in 2018 as organizations modernize their local area network (LAN) and wide area network (WAN) infrastructure to support digital business needs (see Table 1). In contrast, on-premises server and storage spending will decline marginally as a result of public cloud migration. "Technologies such as software-defined data centers are helping businesses optimize their existing resources, and as a result reducing overall spend on compute and storage resources," added Mr. Rao.

Table 1. Data Center Infrastructure Hardware Spending by Segment, India (Millions of U.S. Dollars)


Segment
2017 Spending
2018 Spending
% Growth
Servers
954
944
-1
External-controller-based storage
383
335
-12.5
Enterprise network equipment
1315
1,442
10.0
Total
2,652
2,721
2.6
Source: Gartner (May 2018)

Spending on IaaS and SaaS Are Increasing in 2018
Most organizations today have a cloud-first strategy, and new business applications are most likely to be developed and hosted using public cloud services. In addition, the availability of hyperscale data centers such as Amazon Web Services and Microsoft Azure in India, as well as local providers ramping up to provide public cloud services, have become compelling reasons for Indian organizations to move toward infrastructure as a service (IaaS). Spending on IaaS in India is set to reach US$1 billion in 2018, up 45.5 percent year over year.

Another notable trend is an increase in the number of migrations of on-premises office suites to software as a service-based offerings, such as Google G suite and Microsoft Office 365. Indian businesses are expected to spend close to US$275 million on cloud office suites in 2018, a 37 percent increase year over year.

"While overall end-user spending on servers in India is expected to decline slightly, the hyperconverged integrated system (HCIS) segment of the server market is expected to grow further," said Mr. Rao. "HCIS witnessed wide-scale adoption in 2017 thanks to its operational simplicity. The momentum is expected to continue in 2018 with companies migrating their business-critical workloads to HCIS."

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