Europe sticks to outsourcing, North America flocks to cloud

28 Mar 2012

New research from Gartner points to significant regional differences around the world in adoption of different kinds of data centre services.

The research, which focuses on global uptake of different forms of data centre services (DCS), suggests that the idea of outsourcing data centre operations to one provider has more appeal in Europe than it does in the US.

“The European market used to be a fragmented puzzle of different and relatively small country markets, but since 2005, leading outsourcers have implemented low-cost remote control centres and then started developing IUS [infrastructure utility services] offerings to benefit from significant traction with infrastructure utility for SAP, particularly since 2008 and during the economic crisis,” says the report’s authors.

As a comparatively homogenous market in terms of language and currency, North America doesn’t face this problem. Gartner analysts believe that this is why that market is driving innovation in the newer forms of data centre services and seeing growth in more traditional outsourcing models slowing down.

According to Gartner’s findings, the data centre outsourcing market in Europe was worth $38 billion (£24 billion) in 2011, compared to $33 billion in North America. However, web hosting and colocation on the other side of the pond was much higher, hitting $23 billion, compared to $8.6 billion across the EU.

North America shows the highest cloud adoption rate in the study, with a penetration rate of 60 percent of businesses, compared to a rate of 23 percent in Europe. In the Asia-Pacific region, public cloud services penetration is almost 10 percent in Japan but just 3 percent elsewhere.

Looking globally, interest in DCS is extremely high, the report says, but market structure, dynamics and maturity differ markedly across the world. Either way, Garter’s analysts see the shift towards ‘industrialised’ services, such as infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS), as a global trend in the DCS market.

"Many events have affected the DCS market in the past two years, with symptoms of a traditional market at the tipping point from maturity to re-invention or decline," commented Claudio Da Rold of Gartner. "Buyers in enterprise organisations must recognise the common usage patterns and differentiated levels of adoption of hosting versus data centre outsourcing (DCO), as well as the different business and market drivers toward new products.”