February 7, 2018

Big Data Driving Hyperscale Datacenter Surge

George Leopold

The inexorable growth of enterprise applications running in the cloud is expected to nearly double the number of hyperscale datacenters over the next four years, an expansion driven in part by data analytics and surging collaboration among data consumers.

The bullish forecast is among the conclusions of a global cloud index released this week by Cisco Systems that also projects that cloud traffic will account for 95 percent of datacenter operations by 2021. Further, the annual survey highlights the impact of multi-cloud traffic on datacenters along with improving data security in the cloud and the rise of the Internet of Things.

Enterprise multi-cloud strategies also are boosting the revenues of major public vendors, according to a separate analysis.

By 2021, the Cisco (NASDAQ: CSCO) index reckons, an estimated 628 hyperscale datacenters will support just over half of all datacenter servers and an equivalent volume of datacenter network traffic. “Datacenter application growth is clearly exploding in this new multi-cloud world,” stated Kip Compton, vice president of Cisco’s Cloud Platform and Solutions Group.

Projections for hyperscale datacenter growth are based on a survey by Synergy Research Group, which identified 24 hyperscale cloud operators offering either infrastructure, platform or cloud software services.

The Cisco index sees traditional datacenters going the way of the Dodo bird, with an estimated 94 percent of workloads and computing instances processed by cloud datacenters. Datacenter workloads are expected to double over the forecast period while cloud workloads and instances triple, the index concludes.

Global traffic in cloud datacenters is projected to reach 19.5 zettabytes annually by 2021.

Data storage fueled by big data and IoT deployments is forecast to nearly quintuple over the next four years to 1.3 zettabytes. The Cisco index finds that big data will represent 30 percent of datacenter storage by 2021, up from 18 percent in 2016.

While video delivery accounts for the lion’s share of datacenter traffic, big data traffic is expected to nearly double to about 20 percent of traffic during the same period.

Meanwhile, Synergy recently released cloud infrastructure services data for the fourth quarter of 2017 showing that Amazon Web Services (NASDAQ: AMZN) maintained its substantial lead over public cloud rivals Microsoft (NASDAQ: MSFT), IBM (NYSE: IBM) and Google (NASDAQ: GOOGL). Microsoft’s share of the public cloud services market grew 3 percent during the last quarter while IBM lost 0.5 percent and Google gained 1 percent.

Synergy also reported that quarterly cloud revenues exceeded $13 billion while annual cloud services revenues jumped 44 percent over the previous year. “We fully expected a year-end boost in cloud growth rates but the numbers came in a little stronger than anticipated, which says a lot about just how robust are the market drivers,” said John Dinsdale, Synergy’s research director.

Echoing the Cisco cloud index, Dinsdale added, “The leading cloud providers all have things to be pleased about and they are setting a fierce pace that most chasing companies cannot match.”

Hence, the future of datacenters appears to be among the hyperscalers, especially those equipped to handle emerging enterprise applications like big data analytics.

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