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​Cloud environments drive IT infrastructure spending growth

​Cloud environments drive IT infrastructure spending growth

"For the majority of corporate and public organisations, IT is not a core business but rather an enabler for their core businesses and operations."

Total spending on IT infrastructure products (server, storage, and Ethernet switch) for deployment in Cloud environments will increase by 18.9 percent in 2016 to reach $US38.2 billion.

Excluding double counting between storage and server, in comparison, IDC research highlights that spending on enterprise IT infrastructure deployed in traditional, non-Cloud, environments will decline by four percent in 2016, but will still account for the largest share, 62.8 percent, of end user spending.

Spending on private Cloud IT infrastructure will grow by 11.1 percent year over year to $13.9 billion geared toward on-premises private Cloud deployments.

Meanwhile, spending on public Cloud IT infrastructure will increase by 14.1 percent in 2016 to $24.4 billion.

"For the majority of corporate and public organisations, IT is not a core business but rather an enabler for their core businesses and operations,” IDC Research Director of Storage Systems Natalya Yezhkova said.

“Expansion of Cloud offerings creates new opportunities for these businesses to focus efforts on core competences while leveraging the flexibility of service-based IT.”

From a geographic perspective, Yezhkova said investments in Cloud IT infrastructure will grow across all regions.

“As Cloud service providers continue to expand their portfolio of offerings and customer reach, the public Cloud segment will deliver the highest rate of IT spending growth in a majority of regions compared to private Cloud and non-Cloud environments,” Yezhkova added.

Looking at total Cloud IT infrastructure spending, Ethernet switches are forecast to grow at the highest rate, 26.8 percent, while spending on servers and storage will grow at 12.4 percent and 11.3 percent, respectively.

In the long-term forecast, IDC expects that spending on IT infrastructure for Cloud environments will grow at a 12.5 percent five-year compound annual growth rate (CAGR) to $57.8 billion in 2020.

Yezhkova believes this will represent 47.9 percent of the total spending on enterprise IT infrastructure in 2020 with spending on non-Cloud IT infrastructure set to decline at a 1.3 percent CAGR during the same period.

Within the Cloud segment, spending on public and private Cloud IT infrastructure will experience CAGRs of 13.8 percent and 10.2 percent, respectively.

In 2020, IDC expects service providers will spend $37.5 billion on IT infrastructure for delivering public Cloud services, while spending on private Cloud IT infrastructure will reach $20.3 billion.



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