IT Infrastructure Spending on Public Cloud to Grow in 2017: report

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According to IDC’s latest ‘Worldwide Quarterly Cloud IT Infrastructure Tracker’, global spending on IT infrastructure products for deployment in cloud environments will increase 15.3% year-over-year (YoY) in 2017 to US$41.7 billion.

Public-cloud data-centres will account for 60.5% of this, while off-premises private-cloud environments will represent 14.9% of spending, while on-premises private clouds will account for 62.3% of spending on private-cloud IT infrastructure, growing 13.1% YoY in 2017.

Investments in cloud IT infrastructure will increase across all regions while the majority of regions expect to see a reduction in spending on non-cloud deployments across all three technology segments. Overall, worldwide spending on traditional, non-cloud, IT infrastructure will decline 5.3% in 2017, although it will still account for 57.9% of end-user spending.

In cloud environments, Ethernet switches will be the fastest-growing segment at 21.8% YoY growth, while spending on servers and enterprise storage will grow 17.9% and 10.7%, respectively. An important factor in the slowdown of spending on enterprise storage is the weakness in the external storage segment amid continuous adoption of server-based and software-defined storage solutions. In all three segments, spending on IT infrastructure deployed off-premises will be growing faster than spending on on-premises environments.

Long term, IDC expects spending on off-premises cloud IT infrastructure to grow at a five-year compound annual growth rate (CAGR) of 11.7%, reaching $47.2 billion in 2021, with public-cloud datacentres accounting for 80.4% of this. Combined with on-premises private-cloud, overall spending on cloud IT infrastructure will grow at an 11.4% CAGR and surpass spending on non-cloud IT infrastructure by 2020. Spending on on-premises private-cloud IT infrastructure will grow at a 10.3% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 3% CAGR during the same period.

“After the slowdown seen in 2016, we expect to see spending on IT infrastructure for public-cloud deployments return to double-digit growth in 2017,” said Natalya Yezhkova, research director, Storage Systems. “Growing demand for access to agile IT resources and proliferation of next generation workloads will continue driving adoption of cloud-based services. In turn, this move leads to a shift in IT infrastructure spending from traditional enterprise on-premises deployments to datacentres delivering cloud services and corporate private clouds.”