Major spending on IT infrastructure for public cloud services

In BICSI Bytes by info@bicsi.com.au

According to a new forecast from IDC’s Worldwide Quarterly Cloud IT Infrastructure Tracker, total global spending on IT infrastructure products (server, enterprise storage and Ethernet switches) for deployment in cloud environments will increase 12.4% year-over-year (YoY) in 2017 to US$40.1 billion.

Public cloud datacentres will account for the majority of this spending (60.7%) and will grow at the fastest rate (13.8% YoY). Off-premises private cloud environments will represent 14.9% of overall spending and will grow 11.9% YoY. On-premises private clouds will account for 62.2% of spending on private cloud IT infrastructure and will grow 9.6% YoY in 2017.

Increased spending on cloud IT infrastructure and decreasing investments in non-cloud IT infrastructure will be a common theme for all regions. Worldwide spending on traditional, non-cloud, IT infrastructure will decline 4.6% in 2017 accounting for 58.7% of the overall end-user spending on IT infrastructure products across the three segments, down from 62.6% in 2016.

In cloud IT environments, Ethernet switches will be the fastest growing technology segment with 25.8% YoY growth in 2017, while spending on servers and enterprise storage will grow 9.1% and 12.0% respectively. In all three technology segments, spending on IT infrastructure deployed off-premises will grow in 2017 while spending on on-premises environments will decline.

Over the five-year forecast, IDC expects spending on off-premises cloud IT infrastructure will have a compound annual growth rate (CAGR) of 11.0%, reaching $45.7 billion in 2021. Public cloud datacentres will account for 79.8% of this amount with an 11.0% CAGR, while spending on off-premises private cloud infrastructure will increase at an 11.3% CAGR.

Combined with on-premises private cloud, overall spending on cloud IT infrastructure will have a five-year CAGR of 10.9% and by 2020 will surpass spending on non-cloud IT infrastructure. Spending on on-premises private cloud IT infrastructure will grow at a 10.5% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 3.1% CAGR during the same period.

“The overall profile of spending on IT infrastructure in various deployment/location scenarios seen in 2016 will continue in 2017 with some differences in specific technology segments,” said Natalya Yezhkova, research director, Enterprise Storage. “Enterprise adoption of hybrid and multi-cloud IT strategies and the proliferation of cloud-native applications and areas such as the Internet of Things (IoT), which embrace a cloud-first approach to supporting IT resources, will fuel further increases in end-user spending on services-based IT. In turn, this move will be reflected in a shift of the overall spending on IT infrastructure from on-premises to off-premises deployments and from traditional IT to cloud IT.”