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Spending on IT Infrastructure for Deployment in Cloud Environments is Forecast to Grow 10.9% in 2018, According to IDC

According to a new forecast from the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker, total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments is expected to total $52.3 billion in 2018 with year-over-year growth of 10.9%. Public cloud datacenters will account for a majority of this spending, 65.9%, growing at the fastest annual rate of 11.3%. Off-premises private cloud environments will represent 13.0% of cloud IT infrastructure spending, growing at 12.0% year over year. On-premises private clouds will account for 61.7% of spending on private cloud IT infrastructure and will grow 9.1% year over year in 2018.

Worldwide spending on traditional, non-cloud, IT infrastructure is expected to decline by 2.0% in 2018 but nevertheless will account for the majority, 54.7%, of total end user spending on IT infrastructure products across the three product segments, down from 57.8% in 2017. This represents a faster share loss than in the previous three years. The growing share of cloud environments in overall spending on IT infrastructure is common across all regions.

In cloud IT environments, spending in all technology segments, except for storage platforms, is forecast to grow at double digit rates in 2018. Ethernet switches and compute platforms will be the fastest growing at 20.9% and 12.4%, respectively, while spending on storage platforms will grow 6.0%. Investments in all three technologies will increase across all cloud deployment models - public cloud, private cloud off-premises, and private cloud on-premises.

Long-term, IDC expects spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 10.8%, reaching $55.7 billion in 2022. Public cloud datacenters will account for 83.6% of this amount growing at a 10.6% CAGR while spending on off-premises private cloud infrastructure will increase at a CAGR of 11.4%. Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at an 10.9% CAGR and by 2022 will surpass spending on non-cloud IT infrastructure. Spending on on-premises private cloud IT infrastructure will grow at a 11.5% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 2.7% CAGR during the same period.

"Growing expansion of digital transformation initiatives enables further adoption of cloud-based solutions around the globe. This will result in a continuous shift in the profile of IT infrastructure buyers. SaaS, PaaS, and IaaS offerings address a broad range of business and IT needs of enterprises from 'lift-and-shift' to emerging workloads. As a result, service providers' demand for IT Infrastructure for delivering these offerings is growing steadily making them as a group a major buyer of compute, storage, and networking products," said Natalya Yezhkova, research director, Enterprise Storage.

IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker is designed to provide clients with a better understanding of what portion of the server, enterprise storage systems, and networking hardware markets are being deployed in cloud environments. This tracker will break out vendors' revenue by the hardware technology market into public and private cloud environments for historical data and also provide a five-year forecast by the technology market.

Published Tuesday, April 10, 2018 9:38 AM by David Marshall
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