LONDON, July 4, 2016 — According to the International Data Corporation (IDC) WW Quarterly Cloud Infrastructure Tracker, IT infrastructure spending (server, disk storage, and Ethernet switch) for public and private cloud in Europe, the Middle East, and Africa (EMEA) grew by 17.6% year on year to $1.3 billion in 1Q16.

The cloud-related share of total EMEA infrastructure expenditure on server, disk storage, and Ethernet switch grew by 4 percentage points compared with last year, to more than 25.1% in 1Q16. In terms of storage capacity, cloud represented around 29.9% of total EMEA capacity in 1Q16, with a 6.1% decline over the same period a year before. Looking at the market in euros, EMEA in 1Q16 reported strong YoY user value growth (20.1%) in public and private cloud across servers, storage, and switches.

"IDC expects this market to reach a value of $10.7 billion by 2020, or 46.4% of total market expenditure, making it one of the strongest growth areas for the European infrastructure sector, compared with the expectation of a stagnant, if not declining, traditional market," said Kamil Gregor, research analyst, European Infrastructure Group, IDC.

For the scope of this tracker, IDC has tracked Cisco, Dell, EMC, Fujitsu, Hitachi, HP, IBM, Lenovo, NetApp, Oracle, the major ODM vendors, and others. This quarter's tracker does not include an assessment of the impact of the U.K. leaving the EU, given that there is still a high level of uncertainty about potential effects on ICT markets as political developments continue to unfold.

Regional Highlights

"Our forecast for the U.K. may be adjusted downward in the following quarter as IDC expects a 'challenging transition' if the U.K. activates the process of EU withdrawal. Other EMEA markets are expected to remain largely unaffected," said Gregor.

In Western Europe, the growth in cloud infrastructure spending has been distributed nearly equally between enterprise storage and servers, with year-on-year growth of 12.0% and 16.6% respectively. The two types of technology currently account for about 42% and 45% of the total market.

The emerging markets of Central and Eastern Europe, the Middle East, and Africa (CEMA) took 15% of EMEA cloud investments in 1Q16. The share is flat compared with the previous quarter, though the split between the CEE and MEA regions shifted in favor of MEA. Continuously challenging macroeconomic conditions in Russia and weaker investments in the public cloud segment were the main reasons for the shift.

"Even though public cloud investments declined in CEE, private cloud deployments are still favored as they offer greater flexibility, lower capex, and faster implementation over traditional IT infrastructure," said Jiri Helebrand, research manager, Systems and Infrastructure Solutions, IDC CEMA.

Cloud infrastructure spending in the CEMA region is estimated to be 17% of the total addressable server, storage, and networking hardware market, with public cloud accounting for about 47% of this share.

EMEA Cloud IT Infrastructure Value ($B)

Taxonomy Notes

IDC defines cloud services through a checklist of key attributes that an offering must provide to end users of the service. Public cloud services are shared among unrelated enterprises and consumers, are open to a largely unrestricted universe of potential users, and are designed for a market and not a single enterprise. The public cloud market includes a 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 that IDC calls value-added content providers (VACPs). 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); they can be onsite or offsite and can be managed by a third-party or in-house staff. In a private cloud 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."

Link to product sheet for the tracker:

https://www.idc.com/tracker/showproductinfo.jsp?prod_id=961