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Cloud IT revenue skyrockets in first quarter 2016

01 Jul 2016

Worldwide cloud IT infrastructure revenue has grown 3.9% to 6.6 billion on slowed demand from public cloud in the first quarter of 2016.

According to IDC, total cloud IT infrastructure revenues climbed to a 32.3% share of overall IT revenues, up from 30.2% a year ago. This revenue is from infrastructure sales to private cloud which grew by 6.8% to $2.8 billion. 

Comparably, revenue in the traditional (non-cloud) IT infrastructure segment decreased by 6.0% year-over-year in the first quarter, with declines in both storage and servers, and growth in Ethernet switch. 

These findings show that Ethernet switch has had strong year-on-year growth in both private and public cloud. Storage also grew 11.5% year over year in private cloud, but declined 29.6% in public cloud. 

Kuba Stolarski, research director for Computing Platforms at IDC, says theres been a major slowdown in hyperscale public cloud infrastructure deployment demand.

"Private cloud deployment growth also slowed, as 2016 began with difficult comparisons to 1Q15, when server and storage refresh drove a high level of spend and high growth. As the system refresh has mostly ended, this will continue to push private cloud and, more generally, enterprise IT growth downwards in the near term. Hyperscale demand should return to higher deployment levels later this year, bolstered by service providers who have announced new datacentre builds expected to go online this year," says Stolarski.

Stolarski also believes there could be some turmoil because of this. 

"As the market continues to work through this short term adjustment period, with geopolitical wild cards such as Brexit looming, end-customers' decisions about where and how to deploy IT resources may be impacted. If new data sovereignty concerns arise, service providers will experience added pressure to increase local datacentre presence, or face potential loss of certain customers' workloads," he adds.

Vendor revenue from cloud IT infrastructure sales grew fastest in the Middle East and Africa at 25.9% year-over-year, followed by Western Europe at 20.6% and Asia/Pacific (excluding Japan) at 18.5%. 

IDC also declared statistical ties all round, with Cisco and Dell finishing first quarter 2016 in second place equally. While IBM, Lenovo, and NetApp similarly tied for the number 5 position. 

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