According to the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Tracker,
vendor revenue from sales of IT infrastructure products (server,
enterprise storage, and Ethernet switch) for cloud environments,
including public and private cloud, increased 34.4% year over year in
the second quarter of 2020 (2Q20). Investments in traditional,
non-cloud, IT infrastructure declined 8.7% year over year in 2Q20.
These
growth rates show the market response to major adjustments in business,
educational, and societal activities caused by the COVID-19 pandemic
and the role IT infrastructure plays in these adjustments. Across the
world, there were massive shifts to online tools in all aspects of human
life, including collaboration, virtual business events, entertainment,
shopping, telemedicine, and education. Cloud environments, and
particularly public cloud, were a key enabler of this shift. Spending on
public cloud IT infrastructure increased 47.8% year over year in 2Q20,
reaching $14.1 billion and exceeding the level of spend on non-cloud IT
infrastructure for the first time. Spending on private cloud
infrastructure increased 7% year over year in 2Q20 to $5 billion with
on-premises private clouds accounting for 64.1% of this amount.
IDC
believes the hardware infrastructure market has reached the tipping
point and cloud environments will continue to account for an
increasingly higher share of overall spending. While IDC increased its
forecast for both cloud and non-cloud IT spending for the full year
2020, investments in cloud IT infrastructure are still expected to
exceed spending on non-cloud infrastructure, 54.8% to 45.2%. Most of the
increase in spending will be driven by public cloud IT infrastructure,
which is expected to slow in 2H20 but increase by 16% year over year to
$52.4 billion for the full year. Spending on private cloud
infrastructure will also experience softness in the second half of the
year and will reach $21.5 billion for the full year, an increase of just
0.3% year over year.
As
of 2019, the dominance of cloud IT environments over non-cloud already
existed for compute platforms and Ethernet switches while the majority
of newly shipped storage platforms were still residing in non-cloud
environments. Starting in 2020, with increased investments from public
cloud providers on storage platforms, this shift will remain persistent
across all three technology domains. Within cloud deployment
environments in 2020, compute platforms will remain the largest segment
(50.9%) of spending at $37.7 billion while storage platforms will be the
fastest growing segment with spending increasing 21.2% to $27.8
billion, and the Ethernet switch segment will grow 3.9% year over year
to $8.5 billion.
Spending
on cloud IT infrastructure increased across all regions in 2Q20 with
the two largest regions, China and the U.S., delivering the highest
annual growth rates at 60.5% and 36.9% respectively. In all regions
except Central & Eastern Europe and the Middle East & Africa,
growth in public cloud infrastructure exceeded growth in private cloud
IT.
At
the vendor level, the results were mixed. Inspur more than doubled its
revenue from sales to cloud environments, climbing into a tie* for the
second position in the vendor rankings while the group of original
design manufacturers (ODM Direct) grew 63.6% year over year. Lenovo's
revenue exceeded $1 billion, growing at 49.3% year over year.