Enterprises looking to host applications and data somewhere other than their own on-premises servers may look at several options before making the critical decision. Larger companies may choose to purchase their own off-site infrastructure or may look to private cloud providers for their computing needs.

The former option is getting some attention from enterprises lately, according to a recent report from 451 Research. The report found that data center operators are intending to invest more in their data centers, including the addition of retrofitted equipment in older facilities. The study, which surveyed data center administrators in medium and large organizations, indicated that nearly 90 percent of respondents planned to either maintain or increase facility spending, and 25 percent of them would increase spending in the next three months.

“In the coming years, workloads will continue to move to the cloud.”

The industries that will be the most affected by these plans for future investments are the financial and health care sectors, which will likely be adding equipment like rack and cabling, power equipment and data center infrastructure management software coming up. These companies are no longer looking to buy new data center space, instead choosing to invest in existing infrastructure.

“To support growing business demands on IT, enterprises are freeing up budgets and investing in modernizing neglected data center facilities,” said Dan Harrington, research director at 451 Research. “Those equipment vendors with offerings that target enterprise clients’ larger premium sites will see the greatest opportunity.”

The increased investment in data center infrastructure will benefit those companies looking to host applications and data in the cloud as well, according to Harrington, because it indicates an increased need for computing power on the part of enterprises. In the coming years, there will be a push toward data center consolidation, and more workloads will continue to move to the cloud.

“Colocation and cloud service providers are well positioned to grow as enterprises require additional capacity and increasingly need to be more agile in responding to growing business demands,” he said. “Facilities vendors who target colocation and cloud service providers also will benefit from this increased enterprise demand.”

Where else are enterprises spending money?
Maintaining an IT portfolio doesn’t rest solely on computing equipment. A study released in January by Piper Jaffray indicated that personnel spending remains the most expensive part of IT budgets and that 58 percent of companies planned to increase personnel spending in 2015. After all, companies have to hire and train professionals who can identify and manage an enterprise’s technology resources.

Enterprises spend one-third of their IT budgets on hiring, training and managing the talent required to keep their technology going.Enterprises spend one-third of their IT budgets on hiring, training and managing the talent required to keep their technology going.

Market forecast: Cloudy with a chance of colocation
Demand for cloud services only continues to grow. A study published by MarketsandMarkets at the end of May predicted that the cloud managed services market will be worth $118.43 billion by 2020. The kind of infrastructure spending forecasted by the 451 Research survey will positively impact the market for the reasons Harrison mentioned – enterprises need more computing power and space, and their dedicated data centers providing them with on-premises IT power can only get so much bigger.