The SaaS/Cloud-first approach to new, high-growth workloads means that growth in infrastructure hardware is generally aligned to webscale architectures.
While workloads may not run more efficiently in the cloud, providers ensure that excess capacity is used, in some cases, at lower prices to ensure highest utilisation, and, therefore, highest monetary return for the provider.
This result is top-level improvement in efficiency, which, as Cloud provider dominance increases, has the immediate effect on the DC market of reducing the demand of total amount of compute to total workload.
The report said traditional managed service providers (MSPs) and infrastructure providers were failing to deliver compelling alternatives to platform as a service (PaaS) from Amazon, Google, IBM, Microsoft and Baidu.
"MSPs are relegated to providing basic transport, or, at best, become managed service brokers," the report said.
"Amid this churn, traditional vendors find it increasingly hard to compete.
"Their growth gradually slows as large Cloud providers acquire greater market share.
"In a very short time, these providers will come to dominate the infrastructure as a service (IaaS) and PaaS markets, and strongly influence the price of DC infrastructure.
According to the report, the two camps of DC infrastructure providers, East and West, cannot peacefully coexist in any market, given the need to protect and increase their influence.
"The impact is that the market is in constant flux, as both sides try to achieve some sort of dominant constant state over the majority of the markets,"
"China has invested in its national high-tech research and development program (also known as the 863 Program) since 1986, as a response to the growing technological and innovation gap between China and the West."
China also has various subsidised programs that are targeted to help high-tech Chinese enterprises to reduce research and development costs in core electronic components, high-tech application-specific integrated circuits (ASICs) and fundamental software development.
Gartner predicts that China, buoyed by deep resources, increasingly respected brands and strong original design manufacturer suppliers (with headquarters in Taiwan and electronics manufacturing service in China), alongside increasing anti-US sentiment, will increase its share of the DC infrastructure market by two percentage points by the end of 2017, at the expense of western companies.
Furthermore, as buyers come to believe that none of the large multinational providers are trustworthy, emphasis will shift to in-country-developed technologies, and OSS and hardware.
The report predicted Intel, AMD, Western Digital and Seagate would maintain their positions for the next several years.
But Intel and AMD should see erosion as mobile and light-medium workload processors shift to ARM and other architectures.
"As high-performance rotating media becomes less important, the storage component market shifts steadily to flash," the report said.
"Software vendors will have to invest more to ensure their applications are compatible with a wider range of hardware, or pick and choose which hardware vendors to work with."
Sign up for MIS Asia eNewsletters.