6 Trends That Will Fuel IT Growth in the Next Five Years

While debate and current data may offer insights into future colocation growth or how much of the infrastructure market will be in public cloud, there is not a lot of discussion about how market dynamics, current IT trends and simple capacity management issues may impact that growth.

Before looking at the impact of six major IT trends that will fuel IT growth, let’s look at what we know about the cloud service provider (CSP) market.

Major CSPs – including Amazon, Microsoft, Google, Alibaba, Baidu and NTT – have an estimated 13.65 million servers globally. Based on my industry experience and discussions with industry luminaries and senior CSP executives, I would estimate current market penetration for CSPs is roughly 10 percent of the total addressable market. Assuming 10 percent market penetration of public cloud is correct, that would mean there are approximately 136.5 million servers in use worldwide. Keep in mind that the CSPs generally use their server resources much more efficiently than enterprises do, so it’s possible there are more like 160+ million servers in the world.

A significant portion of CSP growth has been net new. Many of these new workloads belong to new startups, but a big portion are a result of new opportunities associated with key technology market trends. There are six trends likely to have significant impact on IT demand over the next five years:

  • Artificial Intelligence/Machine Learning (AI/ML) – AI is driving many new business models that would otherwise not have been feasible, but AI also will create efficiencies that replace many legacy systems. The net effect is likely to be more IT overall, but not necessarily a massive increase.
  • Virtual Reality (VR) – Customer interactions, travel, scenario planning, construction, manufacturing and gaming are some of the endless opportunities through VR. Like AI, VR will likely displace many current systems, but there will also be a very large number of net new applications for which there is no existing (however inefficient) substitute.
  • Internet of Things (IoT) - IoT will drive millions of new use cases from making processes more efficient to building smart systems that enable better interaction with facilities and the weather. The key – getting closer to the customer – is where IoT will drive real value for adopters. A very large percentage of these new IoT-enabled IT systems will be net new.
  • Drones and Autonomous Vehicles – While these will leverage AI, VR, IoT, big data and cloud, they also are new systems that will create new business models requiring net new IT.
  • Blockchain – Blockchain will drive so much cost out of many businesses that it will inspire investment and growth in other areas of the business. There will be millions of new services offered that will benefit from blockchain providing trust and efficiency when it is most sorely needed.
  • Cloud - It’s ironic that cloud growth will be positively impacted by each of the above trends, while at the same time it’s also enabling those trends through the reduced friction of acquisition.

The Opportunity

As the costs continue to go down and capabilities improve, humans will continue to find new ways to put IT to use that were not even imagined just a year earlier. Tighten your hats and put your local CSP and colocation provider on speed dial, because as these above mentioned trends take hold over the next five years, it’ll make the growth during the previous five pale in comparison.

For a more detailed analysis of the impact of these trends, and why I think public cloud adoption won’t exceed 17 percent of total IT demand by 2022, check out my recent LinkedIn post.