Share of spending on IT infrastructure continues to shift to cloud IT environments at an accelerated rate in 2017, according to IDC
Jan 17, 2018
FRAMINGHAM, Mass., January 17, 2018 – 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 is expected to total $46.5 billion in 2017 with year-over-year growth of 20.9%. Public cloud datacenters will account for the majority of this spending, 65.3%, growing at the fastest annual rate of 26.2%. Off-premises private cloud environments will represent 13% of cloud IT infrastructure spending, growing at 12.7% year over year. On-premises private clouds will account for 62.6% of spending on private cloud IT infrastructure and will grow 11.5% year over year in 2017.
Worldwide spending on traditional, non-cloud, IT infrastructure is expected to decline by 2.6% in 2017 but nevertheless will account for the majority, 57.2%, of total end user spending on IT infrastructure products across the three product segments, down from 62.4% in 2016. This represents a faster share loss than in the previous three years. The growing share of cloud environments in overall spending on IT infrastructure is common across all regions.
In cloud IT environments, spending in all three technology segments is forecast to grow by double-digits in 2017. Ethernet switches and compute platforms will be the fastest growing at 22.2% and 22.1%, respectively, while spending on storage platforms will grow 19.2%. Investments in all three technologies will increase across all cloud deployment models – public cloud, private cloud off-premises, and private cloud on-premises.
Long-term, IDC expects spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 12.0%, reaching $51.9 billion in 2021. Public cloud datacenters will account for 82.1% of this amount growing at a 12.1% CAGR while spending on off-premises private cloud infrastructure will increase at a CAGR of 11.7%. Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at an 11.7% CAGR and by 2020 will surpass spending on non-cloud IT infrastructure. Spending on on-premises private cloud IT infrastructure will grow at a 10.8% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 2.7% CAGR during the same period.
"As adoption of public cloud services and private cloud deployments continue to spread around the world replacing traditional on-premises hardware-centric IT settings, overall market spending on servers, storage, and networking will follow this move," said Natalya Yezhkova, research director, Enterprise Storage. "The industry is getting closer to the point when cloud deployments will account for the majority of spending on IT infrastructure, which will be a major milestone embracing the benefits of service-centric IT."
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.
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."
IDC defines Compute Platforms as compute intensive servers. Storage Platforms includes storage intensive servers as well as external storage and storage expansion (JBOD) systems. Storage intensive servers are defined based on high storage media density. Servers with low storage density are defined as compute intensive systems. Storage Platforms does not include internal storage media from compute intensive servers. There is no overlap in revenue between Compute Platforms and Storage Platforms, in contrast with IDC’s Server Tracker and Enterprise Storage Systems Tracker, which include overlaps in portions of revenue associated with server-based storage.
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