Cloud infrastructure spending in 2016 jumps 16.2 percent

IT TrendsSpending
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Servers, enterprise storage and Ethernet switches being propped up by cloud rush

Total spending on IT infrastructure products – servers, enterprise storage and Ethernet switches – for deployment in cloud environments will increase by 16.2 percent in 2016 to $37.4 billion, said analyst IDC.

Public cloud data centres, at 18.6 percent annual growth, will account for the majority (62.5 percent) of this spending.

Overall spending on IT infrastructure deployed in off-premises cloud environments (public and private) will reach $28.4 billion in 2016.

IaaS Infrastructure as a serviceIn comparison, spending on enterprise IT infrastructure deployed in traditional non-cloud environments will decline 1.8 percent in 2016. But it will still account for the largest share (63.1 percent) of end user spending.

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, said IDC.

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. 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 percent, while spending on server and storage will grow 16.3 percent and 4.1 percent, 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 percent to $60.8 billion in 2020, or 49.7 percent of the total spending on enterprise IT infrastructure.

Off-premises cloud environments (public and private) will account for 77.6 percent of this amount. Spending on public cloud IT infrastructure will grow at the fastest rate, 15 percent CAGR, while spending on non-cloud IT will decline at 1.8 percent CAGR during the same period.

“Cloud is one of the major options considered by end users as they think about optimisation of their IT operations and utilisation of on-site and off-site resources,” said Natalya Yezhkova, an analyst at IDC.

“This demand for cloud services will continue to drive the underlying shift in IT infrastructure spending from on-premises to off-premises deployments.”

She said: “As public cloud data centres 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.”

@AntonySavvas