Spending on IT Infrastructure for Public Cloud Deployments Will Return to Double-Digit Growth in 2017, According to IDC

FRAMINGHAM, Mass.--()--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 will increase 15.3% year over year in 2017 to $41.7 billion. Public cloud datacenters will account for the majority of this spending, 60.5%, while off-premises private cloud environments will represent 14.9% of spending. On-premises private clouds will account for 62.3% of spending on private cloud IT infrastructure and will grow 13.1% year over year 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 segment. Overall, worldwide spending on traditional, non-cloud, IT infrastructure will decline 5.3% in 2017. However, it will still account for the largest share, 57.9%, of end user spending.

Note: All figures above exclude double counting between server and storage.

In cloud environments, Ethernet switches will be the fastest growing technology segment at 21.8% year over year growth in 2017, while spending on servers and enterprise storage will grow 17.9% and 10.7%, respectively. (These growth rates include double counting between server and storage to fully represent each of the technology segments). 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 will grow at a five-year compound annual growth rate (CAGR) of 11.7%, reaching $47.2 billion in 2021. Public cloud datacenters will account for 80.4% of this amount. Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at an 11.4% CAGR and will 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.

An interactive graphic showing worldwide spending share for public cloud, private cloud, and traditional datacenters over the 2015-2021 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.

"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 datacenters delivering cloud services and corporate private clouds."

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.

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 wholly-owned subsidiary of IDG, the world's leading technology media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.

All product and company names may be trademarks or registered trademarks of their respective holders.

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 a new forecast from IDC, total spending on IT infrastructure products for deployment in cloud environments will increase 15.3% year over year in 2017 to $41.7 billion.

Social Media Profiles

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