Monday, 28th September 2020

Cloud environments will drive IT infrastructure spending growth

According to the IDC Worldwide Quarterly Cloud IT Infrastructure Tracker, total spending on IT infrastructure products (server, storage, and Ethernet switch) for deployment in cloud environments will increase by 18.9% in 2016 to reach $38.2 billion.

This amount excludes double counting between storage and server. In comparison, spending on enterprise IT infrastructure deployed in traditional, non-cloud, environments will decline by 4% in 2016, but will still account for the largest share, 62.8%, of end user spending. Spending on private cloud IT infrastructure will grow by 11.1% year over year to $13.9 billion geared toward on-premises private cloud deployments. Spending on public cloud IT infrastructure will increase by 14.1% in 2016 to $24.4 billion.

From a geographic perspective, investments in cloud IT infrastructure will grow across all regions. As cloud service providers continue to expand their portfolio of offerings and customer reach, the public cloud segment will deliver the highest rate of IT spending growth in a majority of regions compared to private cloud and non-cloud environments.

Looking at total cloud IT infrastructure spending, Ethernet switches are forecast to grow at the highest rate, 26.8%, while spending on servers and storage will grow at 12.4% and 11.3%, respectively.

In the long-term forecast, IDC expects that spending on IT infrastructure for cloud environments will grow at a 12.5% five-year compound annual growth rate (CAGR) to $57.8 billion in 2020. This will represent 47.9% of the total spending on enterprise IT infrastructure in 2020. Spending on non-cloud IT infrastructure will decline at a 1.3% CAGR during the same period. Within the cloud segment, spending on public and private cloud IT infrastructure will experience CAGRs of 13.8% and 10.2%, respectively. In 2020, IDC expects service providers will spend $37.5 billion on IT infrastructure for delivering public cloud services, while spending on private cloud IT infrastructure will reach $20.3 billion.

"For the majority of corporate and public organizations, IT is not a core business but rather an enabler for their core businesses and operations," said Natalya Yezhkova, Research Director, Storage Systems. "Expansion of cloud offerings creates new opportunities for these businesses to focus efforts on core competences while leveraging the flexibility of service-based IT."

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