FRAMINGHAM, Mass., October 5, 2016 – According to the International Data Corporation (IDC) Worldwide Quarterly Cloud IT Infrastructure Forecast, total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments will increase by 16.2% in 2016 to $37.4 billion. Public cloud datacenters, at 18.6% annual growth, will account for the majority (62.5%) of this spending. Overall spending on IT infrastructure deployed in off-premises cloud environments (public and private) will reach $28.4 billion in 2016. In comparison, spending on enterprise IT infrastructure deployed in traditional, non-cloud, environments will decline 1.8% in 2016, but it will still account for the largest share (63.1%) of end user spending. All figures exclude double counting between server and storage.

In 2016, spending on IT infrastructure for off-premises cloud deployments is expected to see double-digit growth across all regions, indicating strong movement toward off-premises IT resources around the world. Similarly, in on-premises settings, spending on IT infrastructure for private clouds will increase in all regions while spending on non-cloud IT will decline in all but one region. Of the overall spending on IT infrastructure for cloud environments (on- and off-premises combined), spending on Ethernet switches will grow at the highest rate, 41.2%, while spending on server and storage will grow 16.3% and 4.1%, respectively.

For the long-term forecast, IDC expects that spending on IT infrastructure for cloud environments will grow at a five-year compound annual growth rate (CAGR) of 13.6% to $60.8 billion in 2020, or 49.7% of the total spending on enterprise IT infrastructure. Off-premises cloud environments (public and private) will account for 77.6% of this amount. Spending on public cloud IT infrastructure will grow at the fastest rate, 15% CAGR, while spending on non-cloud IT will decline at 1.8% CAGR during the same period.

"Cloud is one of the major options considered by end users as they think about optimization of their IT operations and utilization of on-site and off-site resources," said Natalya Yezhkova, research director, Storage Systems. "This demand for cloud services will continue to drive the underlying shift in IT infrastructure spending from on-premises to off-premises deployments. As public cloud datacenters represent the major segment of off-premises IT infrastructure deployments, overall spending done by this segment is closely tied to spending by public cloud service providers, in particular, hyperscale SPs."

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