Spending on IT Infrastructure by Cloud Environments in 2016 Will Be Strong Despite First Quarter Slowdown, According to IDC

FRAMINGHAM, Mass.--()--According to the latest 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 will increase by 15.5% in 2016 to reach $37.1 billion. This amount excludes double counting between storage and servers. In comparison, spending on enterprise IT infrastructure deployed in traditional, non-cloud, environments will decline by 4.4% in 2016, but will still account for the largest share, 63.4%, of end user spending. Spending on private cloud IT infrastructure will grow by 10.3% year over year to $13.8 billion with more than 60% of this amount contributed by on-premises private cloud environments. Spending on public cloud IT infrastructure will increase by 18.8% in 2016 to $23.3 billion.

All regions are expected to increase spending on cloud IT infrastructure in 2016 with investments in public cloud growing at a faster rate than investments in private cloud IT infrastructure. For cloud environments combined, spending on Ethernet switches will be growing at the highest rate, 39.5%, while spending on server and storage will grow at 11.4% and 14.2%, respectively.

For the long-term forecast, IDC expects that spending on IT infrastructure for cloud environments will grow at a 13.1% compound annual growth rate (CAGR) to $59.5 billion in 2020. This will represent 48.7% of the total spending on enterprise IT infrastructure. Spending on non-cloud IT infrastructure will decline at 1.4% CAGR during the same period. Within the cloud segment, spending on public and private cloud IT infrastructure will grow at 18.8% and 10.3% CAGR respectively. In 2020, IDC expects public cloud service providers (CSPs) will spend $38.4 billion on IT infrastructure for delivering services, while spending on private cloud IT infrastructure will reach $21.1 billion.

"Despite weakness in hyperscale CSP demand for IT infrastructure products in the first quarter, we expect spending on public cloud to increase in the second half of the year," said Natalya Yezhkova, research director, Storage Systems. "Overall, we will continue to see steady growth in demand for public cloud services and, as a result, underlying spending on IT infrastructure by CSPs. The economic and financial volatility we see in some regions will push demand further as increasing sophistication of public cloud offerings allows organizations to fulfill their needs across a growing variety of IT domains while OPEX-oriented pricing models provide some relief to tightening IT budgets."

An interactive graphic showing worldwide spending share for public cloud, private cloud, and traditional IT infrastructure over the 2015-2020 forecast period is available here. The chart is intended for public use in online news articles and social media. Instructions on how to embed this graphic can be found by viewing this press release on IDC.com.

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.

Taxonomy Notes:
IDC defines cloud services more formally through a checklist of key attributes that an offering must manifest to end users of the service. Public cloud services are shared among unrelated enterprises and consumers; open to a largely unrestricted universe of potential users; and designed for a market, not a single enterprise. The public cloud market includes variety of services designed to extend or, in some cases, replace IT infrastructure deployed in corporate datacenters. It also includes content services delivered by a group of suppliers IDC calls Value Added Content Providers (VACP). Private cloud services are shared within a single enterprise or an extended enterprise with restrictions on access and level of resource dedication and defined/controlled by the enterprise (and beyond the control available in public cloud offerings); can be onsite or offsite; and can be managed by a third-party or in-house staff. In private cloud that is managed by in-house staff, "vendors (cloud service providers)" are equivalent to the IT departments/shared service departments within enterprises/groups. In this utilization model, where standardized services are jointly used within the enterprise/group, business departments, offices, and employees are the "service users."

For more information about IDC's Worldwide Quarterly Cloud IT Infrastructure Tracker, please contact Lidice Fernandez at 305-351-3057 or lfernandez@idc.com.

About IDC Trackers
IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools. The IDC Tracker Charts app allows users to view data charts from the most recent IDC Tracker products on their iPhone and iPad. The IDC Tracker Chart app is also available for Android Phones and Android Tablets.

About IDC
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.

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Contacts

IDC
Lidice Fernandez, 305-351-3057
lfernandez@idc.com
or
Natalya Yezhkova, 508-935-4281
nyezhkova@idc.com
or
Michael Shirer, 508-935-4200
press@idc.com

Release Summary

According to IDC, total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments will grow 15.5% in 2016 to reach $37.1 billion.

Contacts

IDC
Lidice Fernandez, 305-351-3057
lfernandez@idc.com
or
Natalya Yezhkova, 508-935-4281
nyezhkova@idc.com
or
Michael Shirer, 508-935-4200
press@idc.com