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Public datacenter spend to account for majority of $44 billion infrastructure spend

By Shannon Williams
Mon 16 Jan 2017
FYI, this story is more than a year old

Total spending on IT infrastructure products for deployment in cloud environments is set to increase by 18.2% in 2017, reaching a staggering $44.2 billion.

That’s the word according to analyst firm IDC, who says the majority (61.2%) will be done by public cloud datacenters, while off-premises private cloud environments will contribute 14.6% of spending.

With increasing adoption of private and hybrid cloud strategies within corporate datacenters, spending on IT infrastructure for on-premises private cloud deployments will growth at 16.6%, according to IDC’s Worldwide Quarterly Cloud IT Infrastructure Tracker.

In comparison, spending on traditional, non-cloud, IT infrastructure will decline by 3.3% in 2017 but will still account for the largest share (57.1%) of end user spending.

According to IDC, in 2017, spending on IT infrastructure for off-premises cloud deployments will experience double-digit growth across all regions in a continued strong movement toward utilisation of off-premises IT resources around the world.

However, the majority of 2017 end user spending (57.9%) will still be done on on-premises IT infrastructure, which combines on-premises private cloud and on-premises traditional IT.

IDC says in on-premises settings, all regions expect to see sustained movement toward private cloud deployments with the share of traditional, non-cloud, IT shrinking across all regions.

The report shows Ethernet switches will be fastest growing segment of cloud IT infrastructure spending, increasing 23.9% in 2017, while spending on servers and enterprise storage will grow 13.6% and 23.7%, respectively.

In all three technology segments, spending on private cloud deployments will grow faster than public cloud while investments on non-cloud infrastructure will decline, IDC says.

Long term, IDC expects that spending on off-premises cloud IT infrastructure will experience a five-year compound annual growth rate (CAGR) of 14.2%, reaching $48.1 billion in 2020. Public cloud datacenters will account for 80.8% of this amount.

Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at a 13.9% CAGR and will surpass spending on non-cloud IT infrastructure by 2020, the analyst firm says.

The report shows spending on on-premises private cloud IT infrastructure will grow at a 12.9% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a CAGR of 1.9% during the same period.

"In the coming quarters, growth in spending on cloud IT infrastructure will be driven by investments done by new hyperscale datacenters opening across the globe and increasing activity of tier-two and regional service providers," explains Natalya Yezhkova, research director, Storage.

"Another significant boost to overall spending on cloud IT infrastructure will be coming from on-premises private cloud deployments as end users continue gaining knowledge and experience in setting up and managing cloud IT within their own datacenters,” she says.

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