NFV Projects & Standards NEWS

French Enterprises Embrace Virtualization, Up ICT Spends

By Tara Seals July 22, 2015

Almost half of all French enterprises, benefitting from a flowering growth in the economy, plan to increase their ICT budget this year, to accommodate strategic investments in cloud technologies.

According to a survey from Kable Research, French organizations are interested in modernizing their ICT approaches in order to reap the benefits that new technology can bring: Productivity, automation, streamlining, better collaboration and more.

In fact, Kable’s survey shows that almost half (46 percent) of French enterprises are planning to increase their overall ICT budgets in 2015. That’s nearly a fifth more companies (18 percent) than which had planned to boost budgets last year.  

Only 20 percent of respondents are planning to decrease their ICT budgets in 2015, compared to 30 percent in 2014.

Virtualization is a hot area in the market, as it is for most companies globally. Kable found that the virtualization technology market should reach $1.4 billion in 2019, making for a CAGR of 6.3 percent between 2015 to 2019. A full 63 percent are planning to invest in the arena over the next two years.

Two big drivers for this shift are a) competition, and b) government regulation.

To the former point, agility in data center management and communications networks contributes to operational cost-efficiencies and the ability to better support revenue-generating activities, faster; meanwhile green IT imperatives from the French government are making virtualized infrastructure, with its power-saving perks, highly attractive.

Image via Shutterstock

“French enterprises are looking at green IT and virtualization solutions as a smarter way to reduce capital expenditure on IT hardware, and its related operational costs for maintaining these systems," said Renjitha Balkrishan, analyst at Kable. “In addition to the obvious cost savings and social responsiveness achieved due to lowered carbon footprints, green IT and virtualization solutions enable enterprises to exploit the untapped processing potential of high performance servers and storage devices to deliver optimum performance.”

In a related trend, infrastructure-as-a-service (IaaS) spending is ramping up, and could somewhat supplant investment in more mainstream technologies like software-as-a-service (SaaS) cloud apps going forward. About 60 percent plan to invest in IaaS within two years, while that same percentage already has SaaS in place, in some form. So, overall, SaaS is expected to remain the largest cloud segment at $2 billion in 2015. But, IaaS is expected to supersede SaaS as the most popular cloud segment by 2018, reaching $5 billion by 2019.

Edited by Dominick Sorrentino

NFVZone Contributor

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