India to increase spending on data centre infrastructure in 2018: Report

India to increase spending on data centre infrastructure in 2018: Report
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8 May, 2018

Enterprise spending on data centre infrastructure hardware in India is on course to touch $2.7 billion this year, according to a new report from market research firm Gartner.

This would represent a 2.6% increase from last year.

The report showed that while hardware spending is set to grow moderately in 2018, enterprise spending on data centre infrastructure software will rise to $3.6 billion this year, a 10% year-on-year increase.

"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 centre infrastructure hardware spending, end-user expenditure on networking equipment is expected to grow in 2018 as organisations modernise their local area network (LAN) and wide area network (WAN) infrastructure to support digital business needs. 

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 optimise their existing resources, and as a result reducing overall spend on compute and storage resources," added Rao.

The report also showed that most organisations 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 $1 billion in 2018, up 45.5% year over year," Rao explained.

In addition, Rao said that India was showing a notable trend of rise in the number of migrations of on-premises office suites to software-as-a service-based (SaaS-based) offerings, such as Google G suite and Microsoft Office 365. 

Indian businesses are expected to spend close to $275 million on cloud office suites in 2018, a 37% increase year-on-year, the report showed.