Commoditization Threatens Margins In Data Center Management

Annual double-digit declines in revenue per managed server have outpaced fast growth in the number of data center clients, resulting in the world's largest data center outsourcing and infrastructure utility service providers losing $1.2 billion in North America in 2014.

This market -- which is expected to come in at $79.2 billion worldwide and $29.8 billion in North America this year -- is slated to grow 1 percent to 3 percent in the coming years, with data center outsourcing sales falling 3 percent to 4 percent and infrastructure utility outsourcing jumping 11 percent to 14 percent as demand grows for external management of on-premise private cloud environments.

Market research firm Gartner's North American Magic Quadrant for Data Center Outsourcing and Infrastructure Utility Services evaluated 21 IT companies with management services for mainframe and centralized server environments. Here is how the Magic Quadrant shaped up, according to Gartner's analysis.