The total addressable market size of enterprise servers in Australia, in terms of spending opportunity, is poised grow at a compound annual growth rate (CAGR) of 6.3% to reach US$1.3bn in 2025, led by the ongoing enterprise digital transformation initiatives and IT modernization efforts, says GlobalData.
The report, GlobalData Market Opportunity Forecasts to 2025: ICT in Australia, reveals that Australian enterprises are increasingly adopting cloud-based IT infrastructure to support their ongoing digital transformation initiatives. This includes remote working enablement, and adoption of online/ecommerce services, which will also help drive the demand for servers not just for public cloud services but also for private cloud and traditional IT deployments.
“Growing adoption of disruptive technologies such as AI, IoT and big data and analytics by enterprises to improve their operational efficiency and enhance their digital services will necessitate investments in robust compute infrastructure that can support such workloads between 2020 and 2025” said Saurabh Daga, Technology Analyst at GlobalData.
Data center capacity expansions seen in recent times will additionally support the country’s servers market. In May 2021, DCI Data Centres announced plans for setting up of a new facility in South Australia. Similarly, in July 2021, Macquarie Telecom announced a new data center in New South Wales, serving corporate as well as government customers.
Australia’s focus on digital technologies as key enablers of post-COVID-19 economic recovery also augurs well for the server market in the country. In September 2020, Australia announced AUD1.2bn (US$868m) Digital Economy Strategy, aimed at making Australia a leading digital economy by 2020. The ‘Digital Economy Strategy’ will not only boost the adoption of digital technologies such as cloud, 5G, blockchain etc. in the country but also stimulate the demand for key IT infrastructure components such as servers and storage.
Among the enterprise server segments comprising hardware, and managed server services, enterprise spending on managed server services is set to grow at a faster CAGR of 8.4% over 2020-2025.
“While most enterprises in Australia have come out of the COVID-19 induced slowdown, the need to keep their IT spending in check will prompt them to consider third-party management of their server environment. Additionally, growing complexity of deploying and managing advanced server infrastructure in-house is also likely to encourage enterprises to choose managed service providers” said Mr Daga.
Server hardware will account for the largest share of the overall enterprise server spending opportunity through the forecast period. Within the hardware segment, low-end servers will contribute largest share of the total market value followed by mid-range and high-end servers respectively.
“While the large enterprise segment (1,001+ employees) will account for largest share of the total enterprise server spending in Australia through the forecast period, the combined spending of micro (1-50 employees), small (51-250 employees) and medium (251-1,000 employees) enterprises will increase at a marginally faster CAGR of 6.4% over the forecast period. The federal budget’s provisions for setting up of National AI Center and 4 AI and Digital Capability Centers to accelerate the adoption of transformative digital technologies among SMEs will be the key driver for growth of server spending in this segment” concluded Mr Daga.
