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Total spending on IT infrastructure products for cloud deployment to increase 18.9% in 2016: International Data Corporation


April 11, 2016   by Canadian Underwriter


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Total spending on IT infrastructure products for deployment in cloud environments will increased by 18.9% in 2016, according International Data Corporation (IDC), a global provider of market intelligence, advisory services and events for the information technology, telecommunications and consumer technology markets.

cloud storage conceptIDC’s Worldwide Quarterly Cloud IT Infrastructure Tracker, released on Monday, said that IT infrastructure products (server, storage and Ethernet) for deployment in cloud environments will increase to 18.9% to reach US$38.2 billion in 2016. The tracker covers a variety of locations, including Canada, the United States, Asia/Pacific (excluding Japan), Central and Eastern Europe, Latin America, Middle East and Africa and Western Europe.

The amount excludes double counting between storage and server. In comparison, spending on enterprise IT infrastructure deployed in traditional, non-cloud environments will decline by 4% in 2016, but will still account for the largest share, 62.8%, of end-user spending, IDC said in a statement. Spending on private cloud IT infrastructure will grow by 11.1% year-over-year to US$13.9 billion, geared toward on-premises private cloud deployments. Spending on public cloud IT infrastructure will increase by 14.1% in 2016 to US$24.4 billion.

From a geographic perspective, investments in cloud IT infrastructure will grow across all regions, IDC reported. Looking at total cloud IT infrastructure spending, Ethernet switches are forecast to grow at the highest rate, 26.8%, while spending on servers and storage will grow at 12.4% and 11.3%, respectively.

In the long-term forecast, IDC expects that spending on IT infrastructure for cloud environments will grow at a 12.5% five-year compound annual growth rate (CAGR) to US$57.8 billion in 2020. This will represent 47.9% of the total spending on enterprise IT infrastructure in 2020. Spending on non-cloud IT infrastructure will decline at a 1.3% CAGR during the same period.

Within the cloud segment, spending on public and private cloud IT infrastructure will experience CAGRs of 13.8% and 10.2%, respectively. In 2020, IDC expects service providers will spend US$37.5 billion on IT infrastructure for delivering public cloud services, while spending on private cloud IT infrastructure will reach US$20.3 billion.

“For the majority of corporate and public organizations, IT is not a core business but rather an enabler for their core businesses and operations,” said Natalya Yezhkova, IDC’s research director of storage systems, in the statement. “Expansion of cloud offerings creates new opportunities for these businesses to focus efforts on core competences while leveraging the flexibility of service-based IT.”

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